Economists and the Nobel Peace Prize

Question: Who was the first economist to win a Nobel Prize?

Many economists, hearing this question, would know that it's a trick question, but they would identify the small trick and miss the big one. The small trick is that there was no first economist to win the Nobel Prize in economics because two economists, Ragnar Frisch and Jan Tinbergen, shared it in 1969, when it was first awarded. If two people are chosen, how can one be first?

Now for the big trick: Although they were the first two economists to win the Nobel Prize in economics, another economist was actually the first to win the Nobel Prize. Frederic Passy, a French economist, shared the Nobel Peace Prize with Jean Henry Dunant in 1901. Indeed, they were the first recipients of the Nobel Peace Prize.

I point this out for two reasons. First, economists in the past have been some of the most prominent advocates of peace and opponents of silly wars. Second, it shows that the initial granters of the Peace Prize understood that it ought to go to people who did something for world peace.

Frederic Passy, who lived from 1822 to 1912, was an admirer of Richard Cobden, the famous British advocate of free trade and free markets and opponent of war and imperialism. In 1867, Passy, worried that France and Germany would go to war, spoke out against war and called instead for arbitration of disputes. The fact that France and Germany went to war in 1870 did not stop him: he was an advocate of peace for the rest of his life. According to Alfred Nobel's will, the prize was to be awarded " to the person who shall have done the most or the best work for fraternity between the nations, for the abolition or reduction of standing armies, and for the holding and promotion of peace congresses." Thus it makes sense that the prize was awarded to Passy. It also makes sense that in 1970 it was awarded to Norman Borlaug, whose "Green Revolution" fed literally hundreds of millions of poor people, saving that many lives, in Asia and Mexico.

But many of the people on the list of past Nobel Peace Prize recipients are, to put it mildly, suspect. The list of suspects starts early. Theodore Roosevelt won the award in 1906 for helping end the Russo-Japanese War. Woodrow Wilson won the award in 1919 for promoting the League of Nations. Henry Kissinger and Le Duc Tho won the award in 1973 for the Vietnam Peace Accord, although Le Duc Tho refused the award on the grounds that there was no peace in Vietnam. Menachem Begin and Anwar al-Sadat won the award in 1978 for negotiating peace between Egypt and Israel.

That's just a sampling of the strange awards. Why strange? Because, though they received the Nobel Peace Prize, everyone on the list was incredibly warlike, imperialistic, or brutal, or all three. Theodore Roosevelt was one of the first U.S. presidents to make the U.S. into an imperialist power that, ever since, has gone around the world sticking its nose – and its arms – into other people's business. Indeed, as Reason managing editor Jesse Walker pointed out, Roosevelt described the Spanish-American war as "fun." Woodrow Wilson got the U.S. into World War I when there was no good reason for doing so. His doing so made the German government realize it could never win the war, leading the Germans to surrender. This led to the Versailles Treaty, whose terms were tilted heavily against Germany despite Wilson's assurance to the German government, before it surrendered, that this would not happen. The Versailles Treaty, in turn, upset Germans so much that some of them, who probably never would otherwise have done so, supported Hitler or at least acquiesced in his brutal moves, both domestic and international. For that reason, Wilson arguably did more to create war in the 20th century than any other American. Henry Kissinger, while working for Richard Nixon, had a large role in the decision to bomb the bejesus out of North Vietnam and the decision to bomb Cambodia. Le Duc Tho defended North Vietnam but also attacked South Vietnam. Menachem Begin was an Israeli terrorist who later became president of Israel and invaded Lebanon. Anwar al-Sadat started the Yom Kippur war, an attack on Israel, in 1973.

The moral seems to be, as Jesse Walker noted, that if you want to receive the Nobel Peace Prize, first kill a lot of people and then stop. And don't think that the candidates waiting in the wings for the prize haven't noticed this.

It's quite understandable why this happened. Imagine you're sitting in Sweden and you're on the committee trying to choose the winner. You really do want peace. You notice that some of the most brutal people in the world have stopped being brutal and are suing for peace. You want to encourage that. And so you argue for giving them the prize. That seems like a reasonable incentive. The problem is that when people understand the incentives, they also understand that to get into the position of stopping killing people, they have to kill people first. The solution here would be for the Nobel committee to swear publicly that they will never again give the prize to anyone who got his country into anything other than strictly a war of self-defense. They should probably go further and say that they would never give the prize to anyone involved in war. Even wars of self-defense don't always have to be fought – some situations, as Passy noted, can be negotiated.

For these reasons, I'm not as upset as many people are that the 2007 Nobel Peace Prize went to Al Gore. I don't think he deserved it, for two reasons. The first is on the issue of global warming itself. Although Gore professes certainty about global warming, he first accepted an invitation to be interviewed along with Bjorn Lomborg, a skeptic about the importance of global warming, and then, with little notice, turned down the invite. If he prevails in the policies he advocates on global warming, and if he's wrong about the global warming problem, he will have succeeded in making the whole world substantially poorer – and possibly, therefore, less peaceful. Second, as vice president under Bill Clinton, Gore went along with Clinton's unprovoked attacks on nations in the Balkans. I don't recall hearing a peep out of him about that. Still, though, Gore's record is not as bad as Theodore Roosevelt's or Woodrow Wilson's.

Fortunately, one of this year's Nobel Prize winners has made some sensible, pro-peace statements, and he's done it using the economic way of thinking. That person is Roger B. Myerson, who won one third of the prize for economics. One thing that distinguishes most economists from non-economists is that they focus on the importance of incentives in driving human behavior. As I wrote in my book, The Joy of Freedom: An Economist's Odyssey, I noticed early in my study of economics that in almost all the economics I read, incentives were key to understanding behavior. That's why I made it one of my "Ten Pillars of Economic Wisdom." Myerson is no exception. In his analysis of an ominous trend he saw in the Bush administration, Myerson noted the incentives that Bush was creating in the rest of the world, incentives that could come back and bite us. In a Feb. 17, 2003, op-ed [.pdf] in the Minneapolis Star Tribune, written while President Bush was planning to invade Iraq, Myerson criticized Bush's way of thinking about war. One of his best paragraphs is the following:

"When American forces invade one country after another, people everywhere must ask what keeps them from becoming another American target. In countries where there is no clear answer to this question, politicians will seek military deterrents against America, because people everywhere demand leaders who can promise security."

Myerson ends his op-ed as follows:

"Our government's policy of denying any need for foreign approval of American military actions may seem bold and effective now, but in the long run it can incite deadly rivalries to haunt our future. From a simplistic viewpoint, it might seem paradoxical that a country with overwhelming military superiority can become more secure by accepting some constraints from the international community, to reassure its neighbors. Bismark [sic] understood this fact well, but Kaiser Wilhelm II ignored it disastrously at the turn of the twentieth century. For the safety of our civilization in the twenty-first century, American statesmen need to understand it now."

Those two paragraphs are more important for world peace than anything Al Gore has ever done.