Inequality researchers get the Nobel Prize in Economics

Three scholars from the United States were awarded the 2024 Nobel Prize in Economics on Monday for their studies that looked at the effects of colonization to determine why inequality still exists in the world today, particularly in nations plagued by tyranny and corruption.

The Royal Swedish Academy of Sciences praised Turkish American Daron Acemoglu, British American Simon Johnson, and British American James Robinson for their research on “how institutions are formed and affect prosperity.”

According to Jakob Svensson, Chair of the Committee for the Prize in Economic Sciences, “one of our time’s greatest challenges is reducing the vast differences in income between countries.”

“They have identified the historical roots of the weak institutional environments that characterize many low-income countries today,” he stated at a press conference.

The prize was given the day after a World Bank report revealed a significant reversal in the fight against poverty: the 26 poorest nations in the world, which are home to 40% of the world’s poorest people, have more debt than they have had since 2006.

As the last reward this year, the esteemed honor, officially known as the Sveriges Riksbank reward in Economic Sciences in Memory of Alfred Nobel, is valued at 11 million Swedish crowns ($1.1 million).

According to statistics collected by pro-democracy organizations, Acemoglu told reporters in Athens that the rule of law and public institutions were currently being undermined in many regions of the world.

“Authoritarian growth is often more unstable and doesn’t generally lead to very rapid and original innovation,” he said, describing China as “a bit of a challenge” .

Johnson told Reuters over the phone that long-standing American institutions were under strain, particularly because Donald Trump would not admit he lost the 2020 election.

The presidential election on November 5th was described as “a serious stress test” for American democracy. “I think that’s the biggest concern that I see in the industrialized world,” he remarked.

At a press conference on Monday, Robinson, who is at the University of Chicago, called his fellow laureates his “best friends.” Acemoglu and Johnson are employed at the Massachusetts Institute of Technology.

“I’m not someone who thinks that economists have a kind of cure for everything, or they have some silver bullet,” he stated. “Ideas are important in terms of giving people levers or giving people ways to think about the problems in their society.”

Despite having a common past and similar goals, he claimed that people have “built very different societies in different parts of the world.”

“The first thing is to think about a question that’s relevant to those people, to their context and to their aspirations,” he stated regarding his study.

A CHANGE IN FORTUNE

The research of the laureates demonstrated how, depending on whether the colonizer prioritized resource extraction or the establishment of long-term institutions for the benefit of European migrants, European colonialism had profound but varied effects around the world.

They discovered that this led to a “reversal of fortune” in which formerly wealthy colonies ended up impoverished, while certain poorer nations—where institutions were frequently established—were ultimately able to achieve some degree of widespread prosperity as a result.

The “dangerous” nature of colonizing a place was also determined by another finding: the lower the present output per capita, a measure of prosperity, the higher the colonizers’ mortality rate.

The economics award was established and financed by Sweden’s central bank in 1968, although it is not one of the original prizes for science, literature, and peace established in the will of dynamite inventor and industrialist Alfred Nobel, which were first given out in 1901.

Former winners include prominent intellectuals like Milton Friedman, Russell Crowe’s character John Nash in the 2001 movie “A Beautiful Mind,” and, more recently, Ben Bernanke, the former chairman of the U.S. Federal Reserve.

Inequality research has received a lot of attention lately. Claudia Goldin, a Harvard economic historian, was awarded the prize last year for her research on the factors that contribute to gender disparities in wages and the labor market.

Economists Michael Kremer, Esther Duflo, and Abhijit Banerjee were honored in 2019 for their efforts to combat poverty.

Since its establishment, American scholars have dominated the economics prize, and a significant percentage of winners in the scientific domains for which the 2024 laureates were revealed last week are also American experts.

American scientists Victor Ambros and Gary Ruvkun won the prize for medicine on Monday, and Japan’s Nihon Hidankyo, a group of Hiroshima and Nagasaki survivors who advocated for the elimination of nuclear weapons, won the prize for peace on Friday. 10.3967 Swedish crowns is equal to $1.