5-10 years ago, an economist got some kind of big prize (Nobel? MacArthur Genius Grant? I forget) for pointing out that redistributing wealth is doomed to failure because money gravitates away from people who don’t understand it and towards people who do. Does anybody remember the details of this more specifically, like the name of the theory and of the economist who presented it?
“The wishful thinking economic theory”? Sorry.
I don’t know the situation you’re referring to. I just want to point out that popular descriptions of the Nobel (and I assume other) prizes in Economics can be overly simplified to the point that an economist almost might not recognize it.
For example, Tobin has been described as winning the prize for advocating “Don’t put all your eggs in one basket.” It is true that one of the things Tobin wrote about was the effects of diversification in investment which can be glibly summarized by that phrase, but there is a lot more there and it’s probably not even the most important point.
So i think you might have to give us a few more clues to track it down.
No idea who the economist might be, but I’d like to point out that it doesn’t necessarily follow that those who don’t have money “don’t understand it” and those who do have money do understand it. There are plenty of people who are stupid and rich (many of them with inherited wealth), and plenty of people who are clever and/or savvy with money but poor.
True enough…Bernie Madoff didn’t get rich by tricking the poor, after all…
That said, if it is in regard to investing and growing money, then probably there is some truth to it…since poor/lowe middle class people tend to have to focus funds on the ‘necessities’ and budget the luxuries like savings.
Still, I will reserve judgement until the economist can be better identified.
“Hang on just a tick… this redistribution of wealth is trickier than I thought…” – Dennis Moore, noted 18th century economic advisor.
Granted. I’m not endorsing the principle, I’m just trying to nail down who said it and what the details were.
One commonly sees articles about ordinary middle-class people who win a massive windfall in the lottery (or sometimes at the slots or racetrack) and quickly squander it all away. It’s sort of a meme.
I’ll cop to not having the speclalized vocabulary to ask this question in a more precise manner, but apparently even the experts have some trouble phrasing these things in an enlightening, informative way.
First, there was no Nobel Prize in Economics wet up by Alfred Nobel. There is a prize, supported by a big Swedish Bank, named “In Memory of Alfred Nobel” – but over the objections of his family.
Continued (I submitted prematurely)
Here are the winners since 2000. Possibly you can pick out which one you meant from this.
2014 - Jean Tirole
“for his analysis of market power and regulation”
2013 - Eugene F. Fama, Lars Peter Hansen and Robert J. Shiller
“for their empirical analysis of asset prices”
2012 - Alvin E. Roth and Lloyd S. Shapley
“for the theory of stable allocations and the practice of market design”
2011 - Thomas J. Sargent and Christopher A. Sims
“for their empirical research on cause and effect in the macroeconomy”
2010 - Peter A. Diamond, Dale T. Mortensen and Christopher A. Pissarides
“for their analysis of markets with search frictions”
2009 - Elinor Ostrom
“for her analysis of economic governance, especially the commons”
2009 - Oliver E. Williamson
“for his analysis of economic governance, especially the boundaries of the firm”
2008 - Paul Krugman
“for his analysis of trade patterns and location of economic activity”
2007 - Leonid Hurwicz, Eric S. Maskin and Roger B. Myerson
“for having laid the foundations of mechanism design theory”
2006 - Edmund S. Phelps
“for his analysis of intertemporal tradeoffs in macroeconomic policy”
2005 - Robert J. Aumann and Thomas C. Schelling
“for having enhanced our understanding of conflict and cooperation through game-theory analysis”
2004 - Finn E. Kydland and Edward C. Prescott
“for their contributions to dynamic macroeconomics: the time consistency of economic policy and the driving forces behind business cycles”
2003 - Robert F. Engle III
“for methods of analyzing economic time series with time-varying volatility (ARCH)”
2003 - Clive W.J. Granger
“for methods of analyzing economic time series with common trends (cointegration)”
2002 - Daniel Kahneman
“for having integrated insights from psychological research into economic science, especially concerning human judgment and decision-making under uncertainty”
2002 - Vernon L. Smith
“for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms”
2001 - George A. Akerlof, A. Michael Spence and Joseph E. Stiglitz
“for their analyses of markets with asymmetric information”
2000 - James J. Heckman
“for his development of theory and methods for analyzing selective samples”
P.S. I was privileged to have known one of them, who lived in my neighborhood: a neat guy; Leo Hurwicz. He was an old man at the time (late 80’s), and the prize was given for work done 50+ years earlier. He felt that the prize was partly given to him because 2 of his students had already won prizes for their economic work, expanding on his work.
I was bored yesterday evening, so I did a few Google searches that turned up the name Friedrich Hayek. I tried to read his laureate address and some other stuff by him and the idea in the OP might be his. Certainly it seems consistent with his philosophy.
I’d be surprised if they gave a Nobel prize 10 years ago for a concept published in the 1920’s by George Clason. It’s in The Richest Man in Babylon, a collection of pamphlets widely distributed by banks and insurance companies.
I believe these quotes are somewhat the same idea in different words… from the 1945 paper from Friedrich Hayek, Individualism: True and False (1945)
“Individualism: True and False” (1945); later published in Individualism and Economic Order (1948)
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There is all the difference in the world between treating people equally and attempting to make them equal. While the first is the condition of a free society, the second means as De Tocqueville describes it, ‘a new form of servitude.’
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We must face the fact that the preservation of individual freedom is incompatible with a full satisfaction of our views of distributive justice.
Yes, and the Motion Picture Academy of Arts and Sciences didn’t give awards for “Best Animated Feature” until 2001. What’s your point?