How do Nobel Laureates get path breaking ideas?

Karen Ilse Horn of Institut der deutschen Wirtschaft Köln in Germany has this interesting paper on the topic. Thanks to this interview of Milton Friedman interview I found Mont Pèlerin Society. I researched a bit and got a few papers.   

 

He covers following economists which took part in MPS meetings.

The Mont Pèlerin Society (MPS) is particularly rich in “Nobelity”. Founded in 1947 upon the initiative of the Austrian economist and social philosopher Friedrich August von Hayek, this international network of classical liberal thinkers has enjoyed the privilege of counting eight Nobel Prize winners among its members:

• Hayek himself, who was awarded the Nobel Prize in 1974 together with for “pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena”

• Milton Friedman (1976), “for his achievements in the fields of consumption analysis, monetary history and theory and for his demonstration of the complexity of stabilization policy”;

• George Stigler (1982), “for his seminal studies of industrial structures, functioning of markets and causes and effects of public regulation”;

• James M. Buchanan (1986), “for his development of the contractual and constitutional bases for the theory of economic and political decision-making”;

• Maurice Allais (1988), “for his pioneering contributions to the theory of markets and efficient utilization of resources”;

• Ronald Coase (1991), “for his discovery and clarification of the significance of transaction costs and property rights for the institutional structure and functioning of the economy”;

• Gary Becker (1992, “for having extended the domain of microeconomic analysis to a wide range of human behavior and interaction, including nonmarket behavior”;

• Vernon Smith (2002, “for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms”)

Quite a list of great minds. I will not go into details for lack of time. What are the broad findings?

“There are many roads that lead to Rome.” Summing up, there is an impressive variety of itineraries. What the Nobel Laureates all share is an independent mind, intense curiosity, a natural focus on relevant problems, and helpful networks. As Henrik P. van Dalen has found, “economics is a young man’s game”. Most breakthroughs take place when the scientists are still in their twenties. He traces this back to typical character traits that eminent economists all share: “The average Nobel laureate is equipped with the following blessings: talent, an independent or an outsider’s mind, a love for risky projects, a nose for being at the right place at the right time, the gift to see fundamental problems and, last but not least, luck” (D ALEN 1997, 16).

This very much coincides with my findings. Most of the Nobel Laureates have shared an interest in political and economic questions with their families and thus had, as youngsters, some early mental practicing ground at home. Beyond their parents, they also benefited from teachers and other role models, especially at university. Most of them started out wanting to improve the world, especially under the shocking experience of the Great Depression. Some sort of slipped into economics through their mathematical talent but then, in a second step, also discovered their “missionary” tendencies.

What seems to matter a little less is the actual sociological background, contrary to the bourgeoisie hypothesis. The Nobel laureates I have interviewed all come from very  different backgrounds, ranging from a poor life on a farm (James M. Buchanan) in Tennessee and life in a rather well-to-do family traveling all over the world (Douglass C. North). Working habits and impulses also differ greatly. There are some lone wolves out there and some tribal animals; some scholars who draw their inspiration from interaction and others more from introspection. Some depend more on the literature, some follow the trend of political history, and some very directly translate their personal issues into a research agenda.

Turning from the  micro  level, i.e. from the personal motivations that make for individual careers, to the  macro  level, i.e. towards the miraculous process of the generation of excellence and progress in science as a social phenomenon, one can also be optimistic. It seems that yes, economics as a whole – the whole being different from the mainstream – is making some progress, slowly but surely. 

Interesting stuff. Much like this paper I pointed.

Finally a quote from Hayek:

And yet, Hayek’s warning should be heard: “It is high time, however, that we take our ignorance more seriously” (HAYEK  1964/67, 39). Rome definitely still needs to be discovered.

Great stuff.

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