The Nobel Factor: The Prize in Economics, Social Democracy, and the Market Turn

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The Nobel Factor: The Prize in Economics, Social Democracy, and the Market Turn
by Avner Offer and Gabriel Soderberg
Princeton University Press, 2016
344 pp.
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This well-informed, trenchant critique of academic economics features profiles of the economists who have won the Nobel Prize in the field. The prize in economics was introduced with the support of Sveriges Riksbank, Sweden’s central bank, in 1969—seven decades later than the five prizes originally endowed by Alfred Nobel. According to Offer and Soderberg, the bank hoped to influence debate within Sweden over the future direction of the country’s social democracy by conferring on economics the status of a science. (The prize is officially called the Sveriges Riksbank Prize in Economic Sciences.) The authors question this position on the grounds that modern economic theory is either untestable or, typically, persists despite frequent empirical refutations of its assumptions or predictions. Given this track record, they urge economists to be more humble when offering policy advice based on their ideas.