Nobel Prize in Economics - the black mark of the Masters of money

2024 Author: Seth Attwood | [email protected]. Last modified: 2023-12-16 15:55

The Central Bank of Sweden (Bank of Sweden) is rarely written or spoken about. Meanwhile, this Central Bank is a very interesting institution. The Swedes call it the Sveriges riksbank. Many believe that it is he (and not the Bank of England, created in 1694) that is the world's first Central Bank.

The Swedes call the date of his birth - 1668. So this year the Swedish Central Bank turns 350 years old.

The Bank of Sweden still wants to be the first among the world's central banks. So, he was the first to introduce in 2009 a negative rate on his deposit accounts at the level of minus 0.25%. Bank of Sweden wants to be the first in such a direction as the liquidation of cash circulation in the country. Already, cash accounts for only about 1% of the total money turnover in Sweden.

The Bank of Sweden became famous for one more act: exactly half a century ago, it established a prize, which today is commonly called the Nobel Prize in Economics. Let me remind you that the Nobel Prizes were established in 1895 by the Swedish scientist, inventor, entrepreneur and philanthropist Alfred Nobel. According to the will, most of the Nobel's fortune - about 31 million Swedish marks - was to go to the establishment of awards for achievements in five areas of human activity: physics, chemistry, medicine, literature and for activities to promote peace. There was no mention of economics in the will.

1968 marked the 300th anniversary of the Bank of Sweden. And the leaders of the Swedish Central Bank decided to celebrate the anniversary year by establishing a special international prize in the field of economics (economic science) and to name it after their famous compatriot - Alfred Nobel. In the same year, a special fund was created for the issuance of such prizes. Annually in October, the Royal Swedish Academy of Sciences announces the name of the award winner, after selecting him from the nominations submitted by the Alfred Nobel Prize in Economics Committee. The award ceremony takes place together with laureates in other industries on the anniversary of the death of Alfred Nobel on December 10. Each laureate is awarded a medal, diploma and a cash award (currently the equivalent of approximately US $ 1 million).

There are many national and international awards in the world for achievements in the field of economics and economic science, but the Bank of Sweden award is considered the most prestigious. The secret of prestige is that it was disguised as a truly "Nobel Prize", which was promoted by the Central Bank of Sweden, the Royal Swedish Academy, and the world media. There was a forgery.

Why does the Swedish Central Bank need such a dubious project? There are several versions. One of them is that the command for the establishment of the Nobel Prize in Economics was given to the Bank of Sweden from the owners of the money (the main shareholders of the US Federal Reserve System). The central bank of Sweden was entrusted with the task of promoting the economists needed by the owners of money - those who would create "theories" that would help to strengthen the world power of the owners of money. These are the "theories" of economic liberalism aimed at eroding state sovereignty.

According to another version, the initiative to create the Nobel Prize in Economics belonged to the Bank of Sweden itself. In the 60s of the twentieth century, most central banks already had the status of "independent" from the state. The Bank of Sweden did not have such independence. Efforts were made to "emancipate" him from the state, but in vain. And then the leaders of the Bank of Sweden decided to rely in their struggle for "independence" on "authoritative economists", raising their authority with the help of prestigious awards. To call everything by its proper names, it was a “purchase” of people needed by the Bank of Sweden. And all the same ideologues of economic liberalism - the destroyers of traditional statehood - were “necessary”.

The organizers of the project, called the Nobel Prize in Economics, skillfully camouflaged the goals of the project. First, the public had to get used to the prize so that it would not have suspicions about the scientific nature of the laureates' works. The works of the first laureates were really interesting, they even expanded the understanding of the structure of the modern economy. The first laureates of the Nobel Prize in Economics in 1969 were Ragnar Frisch from Norway and Jan Tinbergen from the Netherlands. The grounds for awarding them the prizes were "the creation and application of dynamic models to the analysis of economic processes." Some of Jan Tinbergen's works were translated into Russian and published in the Soviet Union.

In total, from 1969 to 2016, the prize was awarded 48 times, 78 scientists became its laureates. The discrepancy between the number of prizes and its laureates is due to the fact that one prize can be awarded to several persons at once.

A few years after the start of the project, the quality of the laureates' work dropped “below the plinth”. Works on economics with the "Nobel stamp" acquired a number of pronounced features.

Some of them were outright propaganda of economic liberalism and were used as an argument for officials who promoted decisions on the privatization of state-owned enterprises, deregulation of the economy, lifting restrictions on foreign trade and cross-border capital movement, abolishing antitrust laws, granting full "independence" to central banks, etc. e. The IMF prepared documents replete with references to the work of Nobel laureates. Ultimately, all of these documents were consolidated in the 1980s into a catechism of economic liberalism called the Washington Consensus.

Another category of works was of an exclusively applied nature and claimed to be a practical guide for speculators playing in the world commodity and financial markets. Such works have become especially numerous since the late 90s: by that time, the flywheel of the destruction of national economies with the help of the Washington Consensus recipes had already been launched on a global scale. The interests of the Nobel Economists have switched almost entirely to financial gambling.

The most famous laureates of the "early draft" were such big-headed liberals as Friedrich Hayek and Milton Friedman. Before that, few people knew about them. Here is what the author of There Is No Nobel Prizein Economics writes about these two "economic gurus": “Hayek's contemporaries in the economic scientific community considered him a charlatan and a deceiver. He spent the 50s and 60s in scientific obscurity, preaching the doctrine of the free market and economic Darwinism for the money of the ultra-right American billionaires. Hayek had influential supporters, but he was in the margins of the academic world. In 1974, five years after the inauguration of the award, it was received by Friedrich Hayek, a leading proponent of liberal economics and the free market (otherwise called "enrich the rich"), one of the most famous economists of the twentieth century and godfather of neoclassical economics. Milton Friedman, who studied with Hayek at the University of Chicago, received his Nobel Prize in 1976."

Many serious scientists, economists, public and political figures continue to oppose the "Nobel" swindle of the Bank of Sweden. The Nobel family harshly and persistently criticizes the award established by the Swedish Central Bank and constantly calls for the cancellation or renaming of this award. In 2001, when the world celebrated the 100th anniversary of the Nobel Prize (the first prizes were awarded in 1901), four representatives of this family published an open letter in the Swedish newspaper Svenska Dagbladet, in which they said that the award for economics belittles and belittles the Nobel Prize. dignity.

“Everyone is used to the award in the field of economics, and now it is presented as if it were a Nobel Prize. However, this is a PR move of economists in order to improve their own reputation, "said Nobel's great-nephew Peter Nobel in 2005. He added: "Most often it is awarded to speculators from the securities market … There is no evidence that Alfred Nobel would like to establish such a prize."

Even one of the US Federal Reserve Banks commented on the Nobel Prize in Economics: “Few people understand, especially among those who are not economists, that the Prize in Economics is not an official Nobel Prize…. This award for economic achievement was instituted almost 70 years later - it was tied to the Nobel Prizes in 1968 as a clever advertising ploy to mark the 300th anniversary of the Bank of Sweden."

No less harsh revelations of the "Nobel" laureates in economics are exposed by well-known practitioners of financial markets. Nassim Nicholas Taleb, in his bestseller Black Swan, calls economic and mathematical models that receive the Nobel stamp and are then recommended to participants in financial markets as a working tool, a "Gaussian" (after the German mathematician of the first half of the 19th century Karl Friedrich Gauss, whose formulas Nobel economists love to use it). To quote Black Swan:

“In this way, the Gaussian has permeated our business and scientific culture, and terms such as sigma, variance, standard deviation, correlation, R-squared, and Sharpe's name ratio have flooded the language. When you read a mutual fund prospectus or hedge fund risk description, chances are that you will be given some quantitative summary, among other information, claiming to measure “risk.” It will be based on one of the buzzwords above. Today, for example, the investment policy of pension funds and the selection of funds are carried out by “consultants” based on portfolio theory. If a problem suddenly arises, they can always claim that they relied on the generally accepted scientific method."

The height of madness is that some "Nobel" economists try to use their "discoveries" in practice. For example, American economists Harry Markowitz and Merton Miller received the Nobel in 1990 “for their contribution to the theory of the formation of the price of financial assets”. Robert Merton and M. Scholes were awarded the Nobel in 1997 "for their methods of valuing derivatives." Without going into details, I note that their work encouraged speculative play in the markets, promising that the use of the models they developed would hedge the players against risks. In short, the "Nobel Geniuses" believed in their genius and themselves fearlessly threw themselves into the game: R. Merton and M. Scholes created the hedge fund Long-Term Capital Management (an investment fund not limited by regulation). However, already in 1998 the fund went bankrupt, losses were measured in billions of dollars. Fortunately for these "geniuses", they managed to get the "Nobels" a few months before their bankruptcy.

Another "Nobel genius" G. Markowitz was invited to the position of investment manager at Fannie Mae, the largest US mortgage agency. In September 2006, the same Nassim Nicholas Taleb called this Fannie Mae investment manager a charlatan. Fannie Mae went bankrupt two years later.

In 2018, the Bank of Sweden is going to celebrate the 350th anniversary of its birth. But nothing has been heard about the celebration of the half-century date of the establishment of the Nobel Prize in Economics. Maybe because the project was considered completed and the owners of the money are no longer interested in it?