In 1974 Hayek and Myrdal shared the Nobel in economics, then both argued it should be scrapped: economists' fame spilled into policy questions far beyond their expertise.
In 1974 the Nobel prize in economics went to Friedrich Hayek and Gunnar Myrdal, honoured for their pioneering work on money and economic fluctuations. Both answered with a surprising suggestion: the prize was better not to exist.
In his banquet speech, Hayek put it plainly. What worried him most was that the Nobel gives an individual an authority that no economist should have.
Authority should not come with the medal
The reason lies in who gets influenced. A physicist's sway mostly reaches fellow experts, and if he overreaches they will soon cut him down. An economist's sway mostly lands on politicians, journalists, civil servants and the general public, who rarely know where the expertise ends.
The press tends to treat a laureate as someone who can answer any question, and over time the laureate may come to believe it. Hayek proposed that winners swear an oath, like a doctor's, never to pronounce beyond their competence.
Myrdal's grievance came from the other side. The academy paired him with Hayek, the press labelled him a 'radical', and he insisted his work was about the choice of value premises. Being filed as a political pick hurt him.
In one line: the trouble with economics is not that the prize was badly designed, but that many people treat a certificate as a pass that covers every question.
Why it matters
When a laureate's fame spills into policy opinion, readers should first ask whether he is speaking within his own field. That is also why an economist's policy views often make more headlines than their technical papers.
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