Alfred Nobel was a Swedish chemist who invented dynamite and died in 1896. In his will, he bequeathed a $9 million fortune to to award “prizes to those who, during the preceding year, have conferred the greatest benefit to humankind.” His will directed that the prizes would be awarded in five areas: Physics, Chemistry, Medicine, Literature and Peace. Nobel’s family members were shocked by the creation of the foundation and contested his will.
The first Nobel Prizes were awarded in 1901. Winners are chosen by the Nobel Foundation and interest from the corpus of the foundation fund the prizes. Last year the award amount in each area was about $1.1 million.
In 1968, Sveriges Riksbank (Sweden’s central bank) established the Prize in Economic Sciences in Memory of Alfred Nobel. This economics Nobel Prize was first awarded in 1969. The Nobel Foundation does not fund the award or choose the winner. The winner is chosen by the Swedish Royal Academy of Sciences.
Why was the Economics Nobel Prize created by the Swedish central bank? According to Five Thirty-Eight:
Notre Dame historian Philip Mirowski has found evidence that the economics award grew out of Swedish domestic politics. According to Mirowski, in the 1960s, the Bank of Sweden was trying to free itself from government oversight and become independent. One way to do that was to frame economics as purely scientific, rather than political — in which case, government interference could only hurt the bank. Having a Nobel Prize boosted economics’ scientific street cred.
Many academics and the Nobel family itself have criticized the existences of the Economics sort-of Nobel Prize. The Nobel Prizes are given to those improve the human condition and one has to wonder whether the field of economics improves the human condition.
Related IFOD: What Did Albert Einstein Do With His Nobel Prize Money?
The “Nobel” prize in economics does “improve the human condition” by awarding those who expand the understanding of economic affairs in society so that humans are better able to control, regulate, and improve economic conditions for all humans.