The Nobel Factor: The Prize in Economics, Social Democracy, and the Market Turn by Avner Offer and Gabriel Soderberg (review)

When the Swedish industrialist and arms manufacturer Alfred Nobel endowed five prizes in the areas of Chemistry, Physics, Physiology or Medicine, Literature and Peace, he did not have economics on his mind. The Nobel Memorial Prize in Economic Sciences (the “memorial” bears witness to its distinctive history) was only established in the late 1960s, created by the Swedish central bank as part of a “jubilee” celebration for its 300^th birthday. The Nobel family had little to do with it; in fact, family members had to be persuaded to lend their name. One internal bank newsletter described the creation of the prize and the hoopla around it as a “PR campaign” for the central bank after a stormy political period, observing that “experience shows that it is necessary to be quite lavish to get any effect in this matter” (101).

In their history of the Nobel Prize, Avner Offer and Gabriel Soderberg make the argument that the real significance of the prize was the prestige it generated for the discipline of economics. Looking at the way that the prize operates, the methods used to select winners, and the ideological tendencies of those who have received it, they concede that the winners of the Nobel Memorial Prize have been ideologically divided, and that many liberal economists have been recipients (114). But they also note that some of the most prominent liberal and left economists (most notably, John Kenneth Galbraith and Joan Robinson), who might have seemed likely choices, failed to win the award. “The best-known of those economists who did not win the prize cannot be distinguished from the winners merely by their citation records,” they argue. “In the list of those who were denied the prize, it is difficult not to conclude that Robinson and Galbraith were kept out for ideological reasons” (142).

But The Nobel Factor is more than a political expose of the biases of the prize in economics. More deeply, it aspires to be a study in the way that prizes and awards work, and the role they play in conferring status and expertise. Rather than taking a simple meritocratic approach, assuming that they simply recognize the “best” work in the discipline, Avner and Soderberg try to understand how it is that winners are selected, the impact that winning the prize has both on the individual career and on the broader field, and to ask what the role of such a prize is in the first place—why it exists. Their book contributes to a broader literature on the intellectual history of economics, one that challenges the insular nature of the field, its model-heavy approach and ultimately its status as a science, pointing out the ideological presuppositions that seem built into it from the start.

The most successful chapters of The Nobel Factor are those focused most closely on the prize itself, rather than on the authors’ critiques of economics in general. Indeed, readers may be eager for still more of a sense of the social history of the prize—who its recipients were, how the press covered them, and what role they have in the academy. Nonetheless, the book raises important questions about the role of honorifics such as prizes in legitimating entire ways of thought, not only for economics but for intellectual life in general. By looking behind the curtain, the authors seek to demystify the whole process of selection, opening up a range of questions for scholars in the future and also raising new questions about the role of awards and status in intellectual life.