The Prize in Economic Sciences in Memory of Alfred Nobel was awarded. The question is: to whom and why? Let’s start with having a look at observations of interested individuals.
Let’s start with Konstantin Sonin’s statement first. I won’t make any comments on his expertise in economics. What matters is, he positions himself as a corporate business representative, i.e. proponent of liberal ideology and liberal science.
«The Nobel Prize 2019 (actually, in Memory of Alfred Nobel – M.Kh.) was awarded to Abhijit Banerjee, Esther Duflo from Massachusetts Institute of Technology and Michael Kremer from Harvard University for what had already turned lives of millions of people for the better. The «field experiment» approach introduced by the Laureates, have already been used in many countries for analysis of state policy consequences. The Laureates’ projects concerned analysis of difficulties in access to drinking water and modern medication, microcredits and assessment of efficiency of educational programs.
«A field experiment» is a project carried out on a basis of something already existent in real life without any experiments. For instance, some government decide to introduce a reform in education, some bank introduce a new lending program, or a non-commercial organization plans to distribute scarce medicine. How is it possible to find out whether the program works as planned? Or even simpler – how do we know that the recourses have been spent reasonably – that schoolchildren have got more, small business has become easier for citizens to open, or medicines have been distributed to those who really need them? To assess consequences, it’s necessary to have «control» and «experimental» groups of those who appreciate the results of the reform, and those whose lives haven’t changed. In practice, it’s quite a challenging task. Kremer in Kenia in the mid-1990s, and Banerjee and Duflo in India proved it possible. For the first time there were reliable assessments of large-scale projects’ consequences and technical means to obtain those assessments. Many governments and non-governmental organizations have begun applying these methods within the last twenty years.
In 2017 Esther Duflo wrote an essay «The Economist as Plumber», reasoning that economic scientists should, backed up by the most advanced scientific approach, do manual work from time to time. The Nobel Prize in Economic Sciences 2019 rewarded both pioneer scientific approach and practical achievements: owing to Laureates 2019, hundreds of millions of dollars were spent more effectively. Moreover, in strict accordance with Duflo’s metaphor, there are cities in the world that have clear water in tubes, thanks to economists carrying out field experiments»
And here is another comment by Forbes:
«The Nobel Prize in Economic Sciences was awarded for an experimental approach to alleviating poverty»
«The research conducted by the 2019 Economic Sciences Laureates has considerably improved our ability to fight global poverty. In just two decades, their new experiment-based approach has transformed development economics, which is now a flourishing field of research» — says the Nobel Prize Twitter
The Prize in Economic Sciences was awarded to Abhijit Banerjee, Esther Duflo and Michael Kremer for «their experimental approach to alleviating global poverty». This is the seventh time when the award is shared by three scientists.
All the three scientists work in the USA. Banerjee and Duflo teach at Massachusetts Institute of Technology and Kremer – at Harvard University. Banerjee was born in India, Duflo – in France.
Their awarded approach presupposes that global poverty issue is divided into smaller, more manageable questions, easier to deal with one by one.
«They have shown that these smaller, more precise, questions are often best answered via carefully designed experiments among the people who are most affected» — as written in the Prize Committee press release
Ms. Duflo is only the second woman in history who has ever been awarded the Nobel Prize in Economic Sciences. Besides, she is the youngest Laureate, born in 1972. The record used to belong to a 51-year-old American citizen Kenneth Arrow. Ms. Duflo spent almost a year in Russia. At her fourth year at the university she became an assistant to a famous economist Jeffery Sachs, who then was Yegor Gaidar’s adviser, according to Financial Times.
«I immediately saw that, as an economist, I can have the best of two worlds [political and economic]. You can be there but keep your principles intact and say exactly what you think, and go back to your studies if you are ejected. What you are doing is meaningful and pertinent and maybe will change something» — said Ms. Duflo about her time spent in Russia
It looks very romantic. I would never believe that a person having worked with Jeffrey Sachs could be honest. That person could be clever. I would even believe that the individual may personally not be a thief (however, such a person would have to accept corporate theft as a rule), but the individual cannot be decent. Things that were happening in Russia then, were far off the bounds of propriety, and as all these personalities (with a few exceptions such as Stiglitz) keep silent, they cannot be trusted, not a single word of theirs.
As far as decency is concerned… Well, Mr. Sonin appreciates corporate solidarity above all other feelings. How is it possible today to speak about support for the poor and effectiveness of foreign aid to poor countries? Hasn’t anyone read «Confessions of an Economic Hit Man» by J. Perkins or many other books? Doesn’t anyone know that foreign aid makes richer only international bureaucrats and international banks and corporations? Then what do we reason about? Or, maybe, the lady, who used to work in Russia, has never heard about the huge number of luxury private mansions built at «Rublyovka» upon still another tranche from the World Bank and/or IMF. What greenhorns!
In other words, we observe not entirely honest and, almost for sure, indecent individuals, who parasitize on a larcenous process of the alleged support for the poor. Not to go so far as to say, they’re intentionally appointed to cover for the orchestrators of the process against public resentment. Of course, I’d be glad to be proved wrong… But I’d better ask the readers about their feelings as to all this performance.
And in the end, the world crisis leads to almost global fall of living standards, social infrastructures are dilapidating, people everywhere speak about inevitability of «revival» of the 2008 crisis along with the economic and living standards slump. I’m not even mentioning our 15-year-old analysis. And under these circumstances economic mainstream refuse to discuss crisis processes. Then what is it all about?
Thus, I suspect that today’s award in Memory of Alfred Nobel undermines the mainstream’s authority more than all the critics together.
«Sic transit gloria mundi – Thus passes the glory of the world»