The five real Nobel Prizes—physics, chemistry, literature, peace, and medicine/physiology—were set up in the will left by the dynamite magnate when he died in 1895. The economics prize is a bit different. It was created by Sweden’s Central Bank in 1969, nearly 75 years later. The award’s real name is the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.” It was not established by Nobel, but supposedly in memory of Nobel. It’s a ruse and a PR trick, and I mean that literally. And it was done completely against the wishes of the Nobel family.
Sweden’s Central Bank quietly snuck it in with all the other Nobel Prizes to give retrograde free-market economics credibility and the appearance of scientific rigor. One of the Federal Reserve banks explained it succinctly, “Few realize, especially outside of economists, that the prize in economics is not an “official” Nobel. . . . The award for economics came almost 70 years later—bootstrapped to the Nobel in 1968 as a bit of a marketing ploy to celebrate the Bank of Sweden’s 300th anniversary.” Yes, you read that right: “a marketing ploy.”
The details of how the deal went down are still very murky. What is known is that in 1969 Sweden’s central bank used the pretense of its 300th anniversary to push through an independent prize in “economic science” in memory of Alfred Nobel, and closely link it with the original Nobel Prize awards. The name was a bit longer, the medals looked a little different and the award money did not come from Nobel, but in every other way it was hard to tell the two apart. To ensure the prize would be awarded to the right economists, the bank managed to install a rightwing Swedish economist named Assar Lindbeck, who had ties to University of Chicago, to oversee the awards committee and keep him there for more than three decades. (Lindbeck’s famous free-market oneliner is: “In many cases, rent control appears to be the most efficient technique presently known to destroy a city — except for bombing.”)
– Yasha Levine << Exiled OnLine