Abhijit Banerjee, an Indian-American economist won Nobel Prize in Economics (officially known as the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel) along with Esther Duflo and Michael Kremer “for their experimental approach to alleviating global poverty”.
He is the second person of Indian descent and the third person of non-European ancestry to be conferred with the prize.
The two awardees from India were conferred prize for their contributions to poverty alleviation and welfare economics. The first being Amartya Sen who was awarded in 1998 for “contributions to welfare economics” and other is the most recent awardee, Abhijit Banerjee.
On the other hand, the majority of the individuals from Europe and America were awarded for contribution to free-market economics.
Eight members (Friedrich Hayek, Milton Friedman, George Stigler, Maurice Allais, James M. Buchanan, Ronald Coase, Gary Becker and Vernon Smith) of Mont Pelerin Society (MPS), a classic liberal organization have won Nobel Prize in economics.
Classic liberals believe in Adam Smith’s ‘invisible hand’, and want no market regulation.
It is an open secret that the selection committee has ‘pro-market bias’ and usually leftist economists are not selected.
Amartya Sen himself recognized this and said that Prabhat Patnaik (one of his students) would have got Nobel Prize long ago but was denied the same due to his communist credentials.
While the awardees from West are ‘free market fundamentalists’ like Hayek and Friedman, Indians awarded with the prize are welfare economists.
Nobel Prize gives massive publicity to any economist and his views. If a left-wing economist is awarded Nobel Prize, leftist economic policies automatically get publicity.
One wonders why free-market fundamentalists from India like Jagdish Bhagwati, B R Shenoy have not been awarded in spite of their exceptional contributions. Welfarist economic policies kept India poor for decades.
Before economic liberalization, the Indian economy was growing at so-called Hindu Rate of Growth (A term coined by establishment economist Raj Krishna, he blamed Hinduism for the low economic growth and argued that India could never grow at a faster pace due to Hindu culture) due to socialist economic policies.
The economic growth of the country was slow “because of those very socialist policies that their kind had swallowed and imposed on the country, our growth was held down to 3–4 per cent, it was dubbed — with much glee — as ‘the Hindu rate of growth,” said business journalist and author Arun Shourie.
Despite lesson from thousands of years of economic history, we choose to eulogize the left-wing economists who have won Nobel Prize.
The liberal hysteria since Banerjee has been conferred with the prize is astonishing.
Banerjee is a glorified tax terrorist if anything. In an interview with Rahul Shivshankar of Times Now he categorically said, “No NYAY without a tax increase.”
In another interview with Rajeev Dubey of Business Today, he said that there is scope for direct as well as an indirect tax increase.
When Banerjee was asked what taxes should increase and what are the new taxes that can be imposed, he said, “Income taxes. In principle, there’s scope for wealth taxation and in some sense, there’s scope for increasing GST.”
It is also intriguing that whenever a right-wing Nationalist government comes to power, the committee chooses to award a left-wing economist.
Amartya Sen was honoured in October 1998; a few months after Atal Bihari Vajpayee’s government came to power in March 1998. Sen’s work has been centred on ‘welfare economics’ and he supported programs like MGNREGA.
He was the most prominent intellectual voice in 10 years of UPA regime, which destroyed the macroeconomic stability of the country with its left-wing economic policies.
Modi government came to power in 2014 with the promise of ‘development’. He was very clear that ‘Government has no business to do business’, and has a history of pro-market policies in Gujarat.
The Nobel Committee awarded the prize to Angus Deaton “for his analysis of consumption, poverty, and welfare”.
Deaton’s work has been primarily centred on ‘poverty’ in India and he has been regularly published in EPW, most prominent left-wing research magazine cum journal of the country.
Modi government was re-elected with an even larger majority in May 2019 and the government has taken some serious steps towards privatization.
By awarding the prize to Abhijit Banerjee, the Nobel Committee has given another poster boy to left-wing of the country.
Since Abhijit Banerjee has been conferred with the prize, the left-liberal intelligentsia is celebrating this as if they have got a new messiah.
One wonders why no free-market fundamentalist from India has been honoured with Nobel Prize yet.
Jagdish Bhagwati, Arvind Panagariya, Raghuram Rajan, Meghnad Desai, Arvind Subramanian are some of the economists who had made an exceptional contribution to market economics. But the Nobel Committee chooses to ignore all these folks.
Paul Krugman, one of Bhagwati’s students, won the prize in 2008. Krugman won for his analysis of trade patterns and location of economic activity. Majority of Krugman’s work was based on Bhagwati’s earlier research but the Indian American economist was not made a joint awardee.
The question is why the Nobel Prize committee does not want India to embrace free-market policies which made West rich. Why the committee gives free publicity to left-wing economics by conferring Nobel Prize while market fundamentalist like Jagdish Bhagwati are ignored.
Started in 1969, Nobel in Economics is most controversial among the Nobel Prizes after the award in peace category. According to Sylvia Nazar, an American journalist who has written two books (Grand Pursuit: The story of Economic Genius and A Beautiful Mind: Biography of Nobel laureate John Nash) on the subject, “The prize was tacked on to the original awards in 1969 as a marketing ploy on behalf of Sweden’s central bank.”
Economics is not considered as a Hard Science and there is an ongoing debate on whether to categorize the subject in Science or Social Sciences.
Contrary to natural sciences, the winners in the field of Economics do not make any path-breaking discovery. Instead, they try to influence public policy to improve the life of common people.
Frederick Hayek (1974), a Nobel laureate himself and a towering figure in the field of economics, criticized Nobel Prize in Economics and said “The Nobel Prize confers on an individual an authority which in economics no man ought to possess…. This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence. But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally.”
Had he been consulted before the establishment of the prize, he would “have decidedly advised against it”, added Hayek.
The Nobel Prize in Economics has been severely criticized for recognizing contributions of only ‘mainstream economics’.
The people from heterodox schools have called it PR machinery of established thoughts.