In his last will, Alfred Nobel had asked executors to invest his fortune in "safe securities".
Stockholm:
The Nobel prize in economics, to be announced Monday, has increasingly honoured research in the field of finance -- a subject which, observers note, is far from founder Alfred Nobel's philanthropic ideals.
The economics prize has always been set apart from the other Nobel awards, and the subject of much controversy: unlike the other awards, which were created in Nobel's 1895 will, the "Prize in Economic Sciences in Memory of Alfred Nobel" was devised by the Swedish central bank in 1968 to mark its tricentenary.
"Alfred Nobel himself, a prolific inventor and businessman of genius, would not have created a prize for economics," according to economists Avner Offer and Gabriel Soderberg in their book "The Nobel Factor", which came out in September.
"He wrote in a letter that he 'hated business with all (his) heart', and he considered himself a social democrat."
Nobel seemed wary of finance. He kept his distance from lenders, who had given his father Immanuel a hard time, and feared the hazards of the financial markets.
In his last will and testament, he asked executors to invest his fortune in "safe securities".
But the Nobel prize jury has of late shown its growing appreciation for the field: while none of the laureates in the first two decades of the prize's existence conducted research in finance, eight have since been honoured: three in 1990, two in 1997 and three in 2013.
That is more laureates than in the field of microeconomics (five laureates since 1969), or labour economics (three), and the same number as the field of econometrics.
Only macroeconomics has fared better, with nine laureates to date.
This year, the Nobel judges could tap Douglas Diamond and Philip Dybvig for their work on financial panic models, or Robert Townsend for his work on risk and insurance in developing economies.
'Financial Economics A 'Failure'
Most of the mathematicians who have won a Nobel prize can be found among financial economists -- yet their equations and models would probably not have impressed Alfred Nobel.
"He was a man of science, a passionate reader with literary ambitions, and with a sincere interest in the field of peace. I don't think he was particularly interested in either mathematics or financial issues," insists Bengt Fredrikson, who has written a biography of Nobel.
While the prizewinning financial research may appear to be as rigorous, some argue that it has not acquired the same status as the science disciplines that Nobel himself chose to honour -- medicine, physics and chemistry.
"It appears more 'scientific', at least from a physical sciences standpoint, than it really is," suggests Skip McGoun, a finance professor at Bucknell University in Lewisburg in the United States.
In a 2003 article, he was even more damning.
"By the traditionally rigorous standards of the natural sciences, financial economics has been a failure. It simply cannot predict anything with equivalent accuracy or reliability," he said.
A case in point: two economists who won the prize in 1997, Myron Scholes and Robert Merton, also made a name for themselves for helping devise an investment strategy for Long-Term Capital Management, a hugely successful hedge fund... until it went belly-up.
But for Xavier De Scheemaekere, professor at Universite Libre in Brussels, the entire field of economics, and not just finance, could then be questioned as Nobel-worthy.
"If economics has its place amongst the Nobels, finance does too," he said, noting that, contrary to the natural sciences, in those fields "there is no verifiability."
Despite his criticism, McGoun is quick to acknowledge the academic and intellectual achievement of financial researchers crowned with a Nobel.
"The finance winners of the Nobel award in economics do deserve recognition for their creative intellectual accomplishments, regardless of whether they're eventually refuted," he said.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
The economics prize has always been set apart from the other Nobel awards, and the subject of much controversy: unlike the other awards, which were created in Nobel's 1895 will, the "Prize in Economic Sciences in Memory of Alfred Nobel" was devised by the Swedish central bank in 1968 to mark its tricentenary.
"Alfred Nobel himself, a prolific inventor and businessman of genius, would not have created a prize for economics," according to economists Avner Offer and Gabriel Soderberg in their book "The Nobel Factor", which came out in September.
"He wrote in a letter that he 'hated business with all (his) heart', and he considered himself a social democrat."
Nobel seemed wary of finance. He kept his distance from lenders, who had given his father Immanuel a hard time, and feared the hazards of the financial markets.
In his last will and testament, he asked executors to invest his fortune in "safe securities".
But the Nobel prize jury has of late shown its growing appreciation for the field: while none of the laureates in the first two decades of the prize's existence conducted research in finance, eight have since been honoured: three in 1990, two in 1997 and three in 2013.
That is more laureates than in the field of microeconomics (five laureates since 1969), or labour economics (three), and the same number as the field of econometrics.
Only macroeconomics has fared better, with nine laureates to date.
This year, the Nobel judges could tap Douglas Diamond and Philip Dybvig for their work on financial panic models, or Robert Townsend for his work on risk and insurance in developing economies.
'Financial Economics A 'Failure'
Most of the mathematicians who have won a Nobel prize can be found among financial economists -- yet their equations and models would probably not have impressed Alfred Nobel.
"He was a man of science, a passionate reader with literary ambitions, and with a sincere interest in the field of peace. I don't think he was particularly interested in either mathematics or financial issues," insists Bengt Fredrikson, who has written a biography of Nobel.
While the prizewinning financial research may appear to be as rigorous, some argue that it has not acquired the same status as the science disciplines that Nobel himself chose to honour -- medicine, physics and chemistry.
"It appears more 'scientific', at least from a physical sciences standpoint, than it really is," suggests Skip McGoun, a finance professor at Bucknell University in Lewisburg in the United States.
In a 2003 article, he was even more damning.
"By the traditionally rigorous standards of the natural sciences, financial economics has been a failure. It simply cannot predict anything with equivalent accuracy or reliability," he said.
A case in point: two economists who won the prize in 1997, Myron Scholes and Robert Merton, also made a name for themselves for helping devise an investment strategy for Long-Term Capital Management, a hugely successful hedge fund... until it went belly-up.
But for Xavier De Scheemaekere, professor at Universite Libre in Brussels, the entire field of economics, and not just finance, could then be questioned as Nobel-worthy.
"If economics has its place amongst the Nobels, finance does too," he said, noting that, contrary to the natural sciences, in those fields "there is no verifiability."
Despite his criticism, McGoun is quick to acknowledge the academic and intellectual achievement of financial researchers crowned with a Nobel.
"The finance winners of the Nobel award in economics do deserve recognition for their creative intellectual accomplishments, regardless of whether they're eventually refuted," he said.
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)
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