The confident falsehoods of economists and the Nobel Prize

Lars Syll

Faced with economic theory’s apparent inability to address real economic and financial problems, economists retreat into the wonderful world of models. Instead of constructing theories based on empirical facts, they abandon the real world and prove things about imagined ones. If the goal is knowledge about the real world, the value of these exercises is, to say the least, unclear.

When the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel was established in 1969, there was no problem whatsoever in finding worthy laureates. Gradually, however, the pool of obvious candidates thinned, and less self-evident names began to figure in the discussions. A theoretical and ideological bias also became increasingly apparent.

Almost exclusively, economists representing the dominant orthodoxy were considered. Other important schools and theories were ruled out from the start. They had not devoted themselves to refining the toolbox, but had directed their research efforts towards analysing and trying to understand the conditions for economic growth and an environmentally sustainable development and transformation of our economy.

Of the 99 laureates since 1969, two-thirds are American, while 35 of the winners have been affiliated with the University of Chicago at the time of the award or for their prize-winning research. Three of the 99 laureates have been women.

The dilemma of the economics prize could hardly be illustrated more clearly. In its current form, the prize has outlived its purpose. To salvage what remains of its prestige and restore its early lustre, there are only two viable paths forward: ensure that the prize becomes an economics prize open to all — including economists with perspectives other than the prevailing orthodoxy — and/or transform it into a broad social science prize where researchers other than economists can also be candidates. This would certainly help us once again find laureates worthy of Alfred Nobel’s memory. If the necessary changes are not made, we might as well scrap the prize altogether!

Source:
Real World Econ Rev, 16 Dec 2025 https://rwer.wordpress.com/2025/12/16/the-confident-falsehoods-of-economists-and-the-nobel-prize/

Lars Syll has PhDs in economics and economic history and is a professor at Malmo University, Sweden.