No Bells For Another Nobel

I liked David Kramer’s comment that this year’s Nobel prize in Economics has gone to a “commonist.” Note that Cato Institute gave their big prize for advancing liberty to Hernando de Soto, from Peru, a nation full of indigenous tribal communities – and de Soto’s message is one of Private Property. Usually, such communities are seen as examples of “primitive communism,” of common pool resources, and “collective action.” It is remarkable that a Peruvian should champion Private Property in a land of primitive tribesmen.

In the case of the white tribes of Europe, the Angles, Saxons, Picts, Scots, Jutes, Danes… the key law that enabled them to rise to such spectacular levels is Private Property. And, as de Soto points out, the “representation” of this property in transferable titles. Of course, this does not require The State, and can be accomplished within “private law.”

Looking at this prize from an Indian perspective, therefore, I find little to commend it. Our people need to wake up to Private Property. Urban slums will be transformed overnight if de Soto had been the man in the news today.

Ostrom is citied as an important authority on the management of common pool fisheries. But, along our shores, fish die of old age, the fishing being so technologically backward. And my travels along both our coastlines have revealed to me that our fishermen need titles to their beachside properties.

Indeed, much attention in India needs to be devoted to the issue of “homesteading” unowned land. We must not get diverted by “commonism.” Our focus must remain on Private Property, on homesteading. On Private Law. Ostrom’s “commonism” is not an area of research of great relevance to India’s immediate future.

What I find interesting is that, after the “political” prize in Economics to the inflationist Paul Krugman last year, this year’s prize should go to a “political economist.” Obviously, mainstream Economics has little of worth. However, if it is this science that the prize is really meant for, then it should go to Israel Kirzner of the Austrian School, whose work explodes every fallacy in the mainstream approach to “microeconomics.” Austrian thinkers must be honoured today, and I really enjoyed this column by an Indian physicist on how he discovered the teachings of this school of thought. If anything, it illustrates the power of correct thinking in the science of Economics.

Not that “political economists” have not done great work. But, even in this sub-field, the man who richly deserves the prize is Gordon Tullock. He is over 90 now. His work sheds vital light on “government failure” – in a liberal, democratic setting. Had he received the prize, attention would have been focused on his pioneering work, and public opinion would have been much better informed. Another political economist who richly deserved the prize was Mancur Olson – but he passed away some years back.

There is a long list of people who are gone and deserved this honour: Ludwig von Mises, for one; Peter, Lord Bauer, for two. And there is an even longer list of peculiar intellectual insects who have received it – from Wassily Leontief to Gunnar Myrdal. It just so happens that this prize is awarded by a central bank, and the awards committee comprise sarkaari baboos. It is perhaps time that other prizes be put up to be awarded to deserving economists.