Marginalized Nobel Laureates

by Russ Roberts on November 1, 2009

in Myths and Fallacies

Thought this story from Newsweek on Soros’s new economics/policy enterprising was unintentionally amusing:

Now financier George Soros is announcing a $50 million effort to speed things along. This week Soros is gathering some of the leading practitioners of the market-skeptic school, who were marginalized during the era of “free-market fundamentalism,” among them Nobelists Joseph Stiglitz, George Akerlof, Michael Spence, and Sir James Mirrlees.

Those poor marginalized Nobel Laureates. No one paid any attention to them. They were relegated to second and third tier universities such as Princeton and Stanford and UC-Berkeley.

Unthoughtful people blame anything that went wrong in the last 30 years on Reagan and Milton Friedman because as everyone knows, they were running America. In Europe, it was Thatcher and Adam Smith or Thatcher and Hayek or someone else.

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  • How much did Fannie pay Stiglitz for that paper? Seems like Stiglitz sold himself out and his nobel to the highest bidder.

    Do you have a link to that paper btw? I can't find it on Fannie's website.
  • Ecommunist
    Soros is either stupid or evil and he's made way too much money to be stupid.
  • "he's made way too much money to be stupid"

    Oh, I wouldn't say that. Stupid people make money all the time.
  • brotio
    Agreed.

    I know of a doctor in the Bay Area that makes so much money that he's able to foul the planet with CO2-spewing vacations to the far reaches of the globe on a regular basis.

    :-D
  • LOL. Soros makes relatively few but very big bets on hunches. If they work, he looks like a genius. He rarely hedges and I don't think his winning trades are not mostly luck. If you start with a million people who make 50/50 bets, 50% will win every time. Statistically, there will be a handful of people who are always in the winning group. However, in this business, people tend to deify those who win big because most people don't have a firm grasp of probability. An aura develops around them. It's pretty scary to watch. Soros has come to actually believe he knows more than the market.

    Soros is not stupid, but he is given credit for a lot more intelligence, foresight and intuition than he actually possess.
  • danielkuehn
    Well no one took Stiglitz's advice on the stimulus or the banks. I'd call that marginalized from the policy discussion.

    And I'm glad they didn't pay attention to him. He's over the top. He's a good theorist, and a good economist. He goes overboard in policy recommendations. But there's no doubt at all he's marginalized.
  • matt
    Marginalized by whom?
  • danielkuehn
    Was that not implicit? Policymakers. And appropriately so.

    He's absolutely not marginalized by other economists for his economics - he's central and often cited. Again, appropriately so.
  • Every time I see George Soros' ugly mug, I want to throttle the putz with my bare hands.

    Like me, he came from the alternative to free markets. Like me, he escaped. He owes his entire existence and every penny of his wealth to the freedoms he attained by slithering onto these shores. Now, he works tirelessly to create the very same system that stokes Antisemitism in his homeland and that destroyed whole populations. He wants to rob people of basic freedoms that he is wishes to buy (from politicians, of course) for himself.

    12 of my family members were slaughtered in Poland. The Nazis killed so many Jews, yet they failed to stomp out this vermin.
  • danielkuehn
    I'm confused - how is being skeptical about the efficient operation of markets and consulting people who think about implications of asymmetric information the same as Nazism, anti-semitism, and Communism? I feel like I missed something.

    Labeling people you don't like as evil "vermin" isn't very good form, Methinks. In fact that's the kind of thinking that lets Nazis and Communists get into power in the first place.

  • I feel like I missed something.

    Good first baby step, Daniel. Although, missing something has never stopped you before and it's not slowing you down now.
  • danielkuehn
    That was supposed to be a soft-touch motivation for you to explain more fully why the economics of asymmetric information implies Nazism.

    I should have known better - I should have made that more explicit for you.

    But now that it is explicit, I'm curious - why does exploring asymmetric information in markets indicate that Soros is working "tirelessly to create the very same system that stokes Antisemitism in his homeland and that destroyed whole populations." Monumental accusations like that require a somewhat more rigorous defense. I can't imagine you'd be too pleased if someone just declared you were working tirelessly to recreate Nazism, and then just left it at that.
  • I don't feel compelled to explain, defend and explore your fantasy connections and accusations. I only feel compelled to tell you that much to keep my fingers busy while waiting for a conference call. Also, it is fun to watch your twist in the winds of the hurricane you create in your head.

    Carry on.
  • danielkuehn
    RE: "Also, it is fun to watch your twist in the winds of the hurricane you create in your head."

    If not quite grasping why Stiglitz and Soros are promoting Nazism is "twisting in the wind", then I'm proud to say that's exactly what I'm doing. If you're happy tossing out Nazi references, enjoy.
  • It's a lot of fun watching you make up stuff in your head, though.
  • yeah, I'm not clear on that either.
  • danielkuehn
    "Now, he works tirelessly to create the very same system that stokes Antisemitism in his homeland and that destroyed whole populations."


    "The Nazis killed so many Jews, yet they failed to stomp out this vermin."

    They almost did. If his dad wasn't as smart as he was, he probably wouldn't have made it out. I'm sick of arguing about this with you. Write whatever you want to - I can't read it anymore. It's either confused rambling arguments for the sake of argument or it's this sort of stuff, which is shocking to read from someone who talks so much about escaping such a system herself.
  • You are truly dense. But, hilarious.
  • danielkuehn
    Better to be potentially dense and not flinging the insult at others than actually dense, unaware of it, and sounding off about how dumb others are.
  • I had the unpleasant distinction of challenging Mirrlees at The Chinese University of Hong Kong this year. He had a demonstrably insane view of how the crisis started as well as how to solve it. It's hard to believe he won a Nobel in anything.
  • Bob
    It's only natural for Soros to update Marx's Manifesto to help guide P. Obama on the true path to new socialism. I just hope the reeducation camps have the NHL's Center Ice package because it's going to take a long time to dissuade me of my diehard capitalist ideals.
  • I searched JSTOR's econ journals and plotted the count of articles with "new market failure" keywords -- "asymmetric information," "adverse selection," "network externalities," etc. -- divided by the total count of articles. This fraction of all articles devoted to such topics has shot up sharply ever since their debut.

    These ideas caught on like wildfire in academia and won their proponents Nobel Prizes. And one of them is married to the president of the San Francisco Fed -- not exactly a pariah among the policy crowd either.
  • One could argue that the reason why economists like Stiglitz and Akerlof are so heavily marginalized is because, in recent years, they seem to have become most known for, rather than their research or theory, caterwauling over their own perceived marginalization.

    Just because one has been awarded with a Nobel doesn't necessarily mean that they have anything valid to say at the moment.
  • Well, given the superstitious creationism that comes out of Princeton's economic department, I view it as a third-tier university, as far as economics goes. They have an excellent, first-class Physics department, though.
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