The Prize in Economic Science in Memory of Alfred Nobel was created in 1969. This initiative of the Bank of Sweden, imitating the five prizes from Alfred Nobel's will, immediately aroused some reluctance. The Nobel family reminded the opinion of the original sponsor about the incompatibility of society's well-being with any notion of profit.
In 1974 the Prize is awarded jointly to Friedrich von Hayek and Gunnar Myrdal "for their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena".
By rewarding with the same quotation two thinkers whose institutional proposals were diametrically opposed, the Nobel committee had achieved an indisputable intellectual feat while generating an additional risk on its own credibility.
The neo-liberal von Hayek demanded the State interventions to be minimized. Investments that bring social progress must come from unconstrained individual savings. A redistribution of wealth by the state inevitably brings power to greedy groups that create delusion through their demagogy. Collectivism thus leads to the loss of the individual freedoms.
Von Hayek delivers his speech at the Nobel banquet on December 10, 1974. After a brief acknowledgement, he expresses clearly but courteously that such a Prize should not exist. Rewarding a conceptual work and not a rigorous scientific achievement, it offers a temptation for its own laureates to intervene outside their field of competence.
Von Hayek thus somehow joined the doubts of the Nobel family on the new Prize. In his political conceptions, the economists are the technicians who manage the relations between judiciary and government in a regime where laws must be stabilized for avoiding to slow down the investment initiatives.
In contrast, Myrdal wants the protection of individuals by a welfare state. Later he will also advocate the abolition of the Prize, with the argument that its attribution to von Hayek was encouraging the reactionaries.
A few years later the fall of the Soviet regime will be an illustration of the non-Keynesian model of von Hayek. Liberalism will come back in the Western democracies with Reagan and Thatcher.
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