Al Zone Media, No Bell Prize, Welcome to it could happen here a podcast about Nobel Prizes.
I guess I'm your host. VA wog with Me with Me?
Is James Heimia excited to hear about the dynamite guy prices.
Yeah, so as people I think are aware.
The man who invented dynamite established a bunch of prizes to be like the pinnacle of human achievement. Right, every years decided I'm a bunch of judges and you know, and this year in the Nobel Prize in Physics, right, Nobel Prize in Physics went to two guys who did a whole bunch of the sort of fundamental basic work on what became machine learning algorithms. And as annoying as modern AI is, like machine learning algorithms has fundamentally changed
the way that science works. It changed the strong and I've used it. I used the new astronomy like there's all this, you know, it has fundamentally changed the way that humanity functions.
Yeah, it's an important discovery.
Yeah, and you know, the Nobel Prize in Medicine went to a group of people who discovered micro RNA, which is like a different type of RNA that fundamentally changed the way that we understand how like gene regulation works. This is like a fundamental path breaking thing in biology. They got that, They got the fucking medicine Noble price for the Nobel Prize in economics went to three guys who discovered that institutions affect prosperity.
Huge groundbreaking shit.
It's like economists don't discover shit, they just they just say shit, and then other economists are like, yeah, cool.
This is okay.
So when I was originally platting this episode, this is going to be an episode about the fake Nobel Prize, which is the economics Nobel Prize, which you've talked about on the show before. But it's worth saying again this is not a real Nobel Prize, Like, this is not one of the prizes that was established by Alfred Nobel. This was a thing established by the sweetest central at as a way to push neoliberal economics new classical economics.
And every year they're always very stupid. It is the thing, right, And and my plan for this episode because I started seeing stuff about this Nobel Prize and I was looking at this and I was like, this is the this is the one of the dumbest ones they've had since they gave out one in the two thousands for realizing that people could simply not make a trade. Like but I was like, Okay, I'm going to go read all of these papers, right, we're gonna come back, We're gonna have a detail analysis of it.
And and I'm reading these papers and it's like it's nothing.
These three economists are They're from what's called institutional economics. These are supposed to be the smart ones, right, these are These are the economists that like the neoclassical economists have to bring in, like the normal neoclassical econmomts have to bring in because their models don't work right. And the thing and the thing that makes them like quote unquote smart is that they understand the institutions exist, and they know how to use really really basic game theory models.
And this makes them like the cutting edge, the absolute elite cutting edge of borgewiw economics, the front lines.
What are these people discovered?
I wanted to people win this prize for, right, Okay, the thing that they won this prize for, like the initial thing, and there's a couple of stuff that we'll get you in a second. But like, the big thing that they figured out is do a series of thunderously stupid regression analyzes.
They discovered something.
I don't even know how to frame the magnitude of this discovery, but it took them a shit ton of math and like a bunch of like tabulations of mortality data to discover that in some places European colonial powers formed settler colonies and in some places they established a colonial rule that wasn't based on settler colonies, and that these were different. This is what they won the Nobel
Prize for. They did a bunch of regression analyzes and were like, holy shit, in some places the Europeans did setular qualities and in some places they didn't, and it had to do with like disease and a level of redictance from the indigenous population. They want a Nobel Prize in economics for this? Are you fucking kidding?
Also also a paper that you could write for my history one ten class at community cottage.
Okay, some of the discourse about this, right, the Marxist economist Sharamazar pointed out that like these fundamental observations were made by another guy we've talked about on this show the Red Again Marxist economist Paul Baran.
And that's a good point.
But also what I was thinking about how to do this episode, right, This isn't a thing like with like Donald Harris, Like we talked about Kamal Harris's dad's book, right, and that's that's a book where there's there's like ideas in it, right, Right, you can go through it and you can watch them developing ideas. You can't do that with this because these people are not developing ideas. They
have discovered the most obvious things. They have read a single book about history, and they have attempted to use a bunch of regression analyzes to prove things that like you can just read a Wikipedia article and discover about the course of colonization.
Yeah, yeah, and then you can go back and to a bunch of aggression otities to produce something that everyone already needs.
Yeah.
And the place that I got to about this is I have the shoke about Maoism where all the things that people get from Maoism are things that you should have learned in elementary school. Like one of the most common things you get from Maoists like, ah, you have to read no investigation, no right to speak and like my friend, Okay, if you needed Maose Dung to tell you that you needed to you needed to research something before you talked about it. What the fuck happened in
your like the rest of your life? Wrong with your life? What we're wrong with your education? Like what has gone wrong with the way you think about the world that you needed Maose Dung can tell you this, and this is this is what most Nobel prizes and economics are and this is the most.
That it has ever been. Yeah.
So basically their argument is that, like this is also an argument that Paul Baran makes is that like, okay, depending on whether you're dealing with a settuler quality or a sort of like India style like administrative colony, I guess I'm like a technical term for it.
It gets like an extractive colony, where you have more about extracted labor, raw materials and settling.
Yeah, like that changes the kinds of institutions that are set up. And like, okay, you can if you want to credit Paul Baron for the discovery that like the settler colonies and like extractive colonies have different legal institutions and they function differently and that has had long range economic impacts like stretching into the future. But like this is something again that you can you can just you can find in a history book and immediately understand. And
these people have tried to do this. They're trying to like track the difference in why we're like some colonies more prosperous later than other colonies. Right, They're they're trying to track this process through a whole bunch of incredibly sketchy regression analyzes and we your assumptions about what income is. They're trying to track like why was it that like China and Turkey were like rich in the fifteen hundreds, but they ceased to be rich after that.
Oh sick.
They're doing a fucking Jared Diamond. Yeah, they're doing a West and the Rest.
Yeah, yeah, it's it's it's wonder a Jerediamond bullshit, except you know with China standard of living in Europe, if you actually go back to the historical record and aren't doing their like stupid weird like using population density as an index for stuff, whether they start bringing malfus into it. If you don't do that and you look at like the actual like historical record, like the average quality of life in China like is not eclipsed by Europe until like the May eighteen hundreds.
Yeah, like you know, so like this is all this is all like very even.
Then, like life expects in the Midican hundreds, didn't it took decades to go up after the Industrial revolution?
Right late?
Yeah, Oh, this is this is sort of drawing to what they're trying to do here, is that like a lot of this is just it's directly it's just the product of colonials, right, and they sort of acknowledge that colonialism existed and that it was like extractive. But their job is to take the basic insights of history and
depoliticize it. Right, We're going to get you later. One of the things they win this prize for is depoliticizing revolution, turning revolution into like a Nash E. Colibrium game theory thing. Oh god, which is unbelievable. It's incredible.
Yeah, these are the kind of people who I have to deal with on a daily basis on list serves Like these are the economists emailing the entire list serve with a unique insight into something that we all you thirty year Like the old faculty email list is plagued.
By this kind of individual Yeah.
And like like this is a thing where so they're absolutely convinced that, like, like the one hundred percent convinced that the thing that leads to economic prosperity is like the safeguarding of individual property rights. And like I will give them a little tiny bit of credit where they're like, well, yeah, so direct colonial institutions were attractive and they're bad because they infringe on but he writes, and that's mildly better
than most of these people. Yeah, but these are these are these are again, these are the most advanced busheois economists.
Right, they're not. They're not like pro Rhodesia and neoclassical guys, right. They do.
They do have a lie where they say, we're not going to say when the colonialism is good or bad. And I think that's been misinterpreted a little bit because like in their work they're pretty clear that it's bad.
They're just trying to make like a moral judgment because God forbid.
Yeah, well they said they're saying it's extractive, and they think that like attractions bad because it's inefficients. Yeah, but basically things like that, they think that like Okay, so like if you if you set up like regimes that like SafeCare private property, this will like make people like richer. But I want to read a quote from from one
of the papers they wrote. Quote, in comparatively poor and less tense populated regions where Europeans could easily settle, it was in the colonizer's interest to introduce inclusive economic institutions that help to boost prosperity for the majority in the long run.
Now, now me like they didn't go on to say, how like yeah, but Britain built the railways in India, Like like like.
This is what he says, right, because what's happening here. You know, this is something that economists love to do. It's like economists love to go into other fields and to have to colonize them, right, Yes, Like what they're doing here is there they've gone into like this field of history. Yeah, and they're attempting to sort of colonized them, right,
many such cases. Yeah, and you know they're looking at this stuff, right, and you've got things like this where it's like no, like the economic institutions that were set up in like settler colonies were not designed to introduce inclusive economic institutions to like help boost prosperity for the majority of the long run, like that was.
The result of social struggle.
But they for some reason basically think that social struggles started in like the eighteen eighties. Oh yeah, the Nobo Bell like committee. They're like Econ fake Econdo Bell Committee like releases, like a giant statement. Like there's like press summaries have like a slightly more detail and they have
like the Econi one. And I want to read this from so part of what they're doing, right, you're talking about like the work that was inspired by this, by the understanding that like the different institutions change economic outcomes.
Quote.
Beterg and Ivery two thousand and five examined the legacy of British land institutions in India that gave cultivators in certain regions proprietary rights, including that productivity was higher in these regions post independence. Genioli and Rainier and Micaelopolis and Papa Iyanu studied the impact of differences in political centralization along ethnic groups dream Dream pre colonial times. None documented
the long run negative impacts of the slave trade. Delwy ten by my non paper in two thousand and eight, So we'll go back to that in a second. Del twenty ten investigated the long run effects of the so called meta system in operation between fifteen seventy three and eighteen twelve and Peru. Inblivian where men were forced to work in minds, within the boundaries of metsa household consumption was twenty five percent lower in twenty twenty one than
just outside the boundaries. So what they have discovered here again, in the late two thousands and early twenty tenths, they discovered that slavery had more negative economic impacts are the places where there was slavery.
Jesus Christ, Like, thanks for trying guys like this.
And shit that they gave these people a Nobel prize for inspiring this is insane.
You're right, economists, dude just love to tourist in someone else's discipline and like fucking have the most basic insight possible. Like all of these are things that would be like an interesting undergraduate paper, right, Like, yeah, insane that these people are getting Nobel prizes for this insane. It's economics that same difference, I guess.
All right, So speaking of economics, we need to go to ads because so it'll be a long term detrimental consequence for us.
Don't but when we come back, there's some more unreal bullshit.
We are back, Okay.
So speaking of undergred bullshit, well, one of the big things in their like initial paper that they did the whole oh my god, they discovered that there's difference between settler colonies and like attractive colonies. One of the big things in that paper was they spent a whole bunch of time looking into was the economic difference in these countries because.
Of the climate.
Which, now, for those of you who are students of history, right, the thing you will remember is that this was like the most advanced race science theory of the early eighteen hundreds. Yes, and these people are like the economists are finally getting around to busting this.
Like two thousand and four.
They had a looked at skull measurements because I felt like, I feel like we're heading down that pod like econophrenology.
So bad, incredible.
That was actually a whole thing in fascist Japan where they had all of I can't remember if I ever talked about this in the episodes that I did on Bachelor's episodes, but they had this whole thing where they had like racial categorizations and like biological characteristics of like the races, and they would use them to like determine allocated efficiency of which slaves you should use to do what.
Oh cool, cool, cool, cool cool. It was great.
It like great, I mean, like, holy fucking shit, it's so bad.
They dis missed that time. Man, those people could kick the shit out of a Nobel Price in like twenty twenty five. They came back with that stuff.
Yeah, I get, like, you know, I mean one of the things we were talking about, right, is like you were mentionings like these these are like these are like such obvious insights. And I remember, so I went to University of Chicago, right, and that means that I fucking know all of these fucking ghouls, Like I met all the people who are going to become these econ dipshits.
Yeah, you have ground zero for that shit.
One of the things that's funny is that like this is like a particular thing of the universe of Chicago become people's like they all think they can do math and they can't, right, they suck at it. But one of the thin things I was almost like so a bunch of my friends are math majors, and math majors can like actually do math, Like they could do the kind of math that's like there's no there aren't like
numbers involved. Like it's like they're doing like field theory or some shit, or like they're doing a kind of math that when someone tries to explain it to you, they have to start like making diagrams of like the faces of cubes and then like explaining how there's like
thirty two dimensional edges or whatever. And there's always this joke from the math professors where they'd be mad because like they look at the econdable price and they'd be like, this person made like an incredibly minor optimization to a trading algorithm that's like incredibly obvious to anyone who even sort of knows math, and they gave them at a mole price for this.
And this is that before history. Yeah.
So the other thing that they discovered, right, oh God, I I I'm trying to find the least depressing way
to put this. They they discovered that there are revolutions, and they discovered that like there are different interest groups in a revolution who have different interests and like like literally One of the things that they won this prize for is a paper where they they discovered that giving people like the franchise, like giving people the ability to vote, and setting up the welfare state was something that was
done by elites to stop revolutions. Yeah again, Yeah, they have all these mathematical models that look very impressive until you realize they're just they're like incredibly stupid game theory bullshit to like determine whether or not a country will do a revolution, and their model for it basically is and they've discovered some some genuinely impressive insights for like a sixteen year old who wants to go into into political science, right, Like, they discovered that, for example, elites
have economic interests and that those economic interests are different from masses. But because they're economists, the only way they can conceptualize this is in terms of tax rates. So they make the argument, and this is not a joke. I am, I am being serious about this. I read this fucking footnote. They make the argument that the overthrow of Salvador Allende was about elite tax rates.
Oh that one is fucking like Jesus wept.
And it's so funny too, and this is this is like one of the biggest most obvious problems with their models, right, And this is this is this is from all the way back to like their whole thing about like how the institutions that were set up by colonialists being different
affected like the long term trajectory of these countries. They treat these entire process because like one of the things that they've discovered is that there are revolutions and counter revolutions, because they read a Wikipedia article about like right wing coups in Latin America, and they discovered that eats can do antidemocratic coups because they don't want their taxes to be too high.
That's the only reason they do it.
Yeah, But but their discovery of this, right, that that right wingers do antidemocratic cups to like preserve their wealth and political power. Right, But never at any point in their process does it seem to have occurred to them that elites are not purely single national figures, and that there are in fact multinational elites and in fact there's something called the Central Intelligence Agency that doesn't come FAMI.
These people do curse. And this is this is like the fundamental core of this right.
It's like these models talk about sort of like e lead extraction, right, but it's all framed through the language of sort of like taxes or like rents, basically like like the thinking like land ranch or like they're fighting over a surplus. Right, Okay, But what they're trying to do is depoliticize how this actually works, because the thing they're trying to present is that all extraction happens through the state, right, Yeah, Like the state is the tool
that leads use. And now if you think about those five seconds, well, like well no, obviously, like there's an exploitation in like the workplace that's actually in indies, right, military hatorships, that's actually like the primary place where extraction happens. Where you shoot all the union organizers and then you fucking force solved the peasants to work in the field and shoot them if they don't. Right.
But but what what they're doing is attempting to sort of deep politicize the deep plicize this entire process. This is what I'm talking about. Like they are the.
Most advanced Bushwi economists, and being the most advanced Bushwise economists, they have finally figured out that the whole they call it modernization theory. That's not really what modernization theory is. But they're economists, they're fucking stupid. They don't know anything. You can't judge them for not actually knowing what modernization theory is. But they finally discovered that the old line about how economic development and evidently brought democracy was wrong.
Again, huge insight here.
Yeah, but this brings them into the world of democratic transitions. Now, after we come back from these ad breaks, I would read you the most thunderously stupid line I've ever read in a paper in my entire life. And that is fucking saying something given how many eCOM papers I've read. Yeah, you've been in the trenches. Okay, oh god, let me let me, let me, let me read this line. This is This is a quote from the ECON Nobel Prizes site.
In their two thousand and sixth book, the two of the three economists made an ambitious attempt to provide quote, the first systematic formal analysis of the creation and consolidation of democracy.
The first This is very funny. This is fucking insane.
This is like an entire field of international relations of political science.
This is ship not not just that there are literally multiple disciplines. This is an entire field of study, right, Like I have read it, Like obviously, this is an entire matcho political science. This is an entire branch of international relations. This is an entire branch of sociology. There's like there's like an anthropological school kind of that that's about this.
They're interdisciplinary fucking institute, so that exists for this reason, Like this is shit that I studied from people who wrote books about it in the nineteen fifties, Like.
This is like like you, And the funny thing is they are they literally quote people who are writing about this from the age, like people have been studying this for fucking it as long as there has been democracy.
People have been studying.
This Shitah yeah, their eCOM thing that they always was like, oh, nobody ever did formal analysis for It's like, have you ever fucking.
Read have you read a poly side paper?
I understand, I too dropped my public policy major the moment I realized that public policy was just fun an econ with the lines in the graph relabeled, Yeah, have you ever fucking read one of these papers? Like you actually have a chance of understanding them because they are you know, Okay, I can't bet you mean to political science, they are about one hundred and fifty times more advanced
than the ECON papers on this subject. But that's still not like a very high level of advancement, right, but like still they're like they have formal models of this. They've done all the stupid math bullshit. The sociologists done all the fucking number crunching, Like okay, okay, here's another go from this. The authors start the paper by showing that democratic transitions are precipitated by falls in GDP per capita.
They discovered this in two thousand and nineteen. I was having.
Twitter arguments, like arguments again with like sixteen year olds on Twitter in like twenty sixteen about what the relationship between revolutions and declining and raising living standards were.
Like this was Twitter discourse, right.
This is seven years off to the Arab Spring.
Like just a twenty nine Yes, insane, they discovered.
This, Yeah, do they do formal analysis of the Arab Spring, famously the first and only democratic transition that's ever happened.
No, that's like two recents. Okay, They're all all their stuff.
Is what they call the quote the second wave of democratic transitions.
Which is the second wave of all because they're two social idiots, so that they're talking about the protomocracy movements in the eighties in Latin America and you saysia great, Yeah, which they're also just thunderously wrong about like all of the time.
Yeah. I was going to say, I can't wait to hear what they have to say about those.
I'm literally not even going to talk about it because it's nothing.
It's just like air.
I'm just looking up a very very insightful paper that ali Ka Diva wrote, who I've interviewed several times so different things. It's called stick Stones and Molotovs Cocktails. It is a fantastic analysis of democratic transitions. It's about like the strategic use of violence against property and the correlation it has between like succesful demotratic transition movements.
It's good paper. Read that.
Yeah, there's a lot of great like analysis. We'll put that in like the notes here. There's a lot of great analysis of this. But what they're trying to do is they're trying to build this model where they're like looking at like basically bargaining between like the masses and elites to decide whether you do a revolution or a
counter revolution. And they're trying to build like a game theory model based on like fuck off the elites and like give ranting concessions and when they don'te grant concessions, and whether people believe they're getting grant concession. The other thing that's also very stupid about this, right, is that like the thing that they're interested in is why or why not people like believe that the olibal economic reforms are going to work, And a lot of democratic transitions
are also about like resistance to that shit. Yeah, like the revolutions to Dan for example, like he is a bard of Marcus movement, but like it is also in large part a reaction to imf postructural reforms these people all think are good and will like cause long term prosparity, and like a lot of the democratic resitions they're talking about, like like for example, again Pinochet, right, like that was like you know, like obviously the pro democracy reformers did
more neoliberalism, but like a part of the part of the reason like that stuff worked was because Pinochet ran the economy into the graduating yeah, right.
Which is what he was sad to do.
But yeah, but like I want to close it on two things. One, I want to read this line right from I'm talking about like the advances in their papers. This is again from the equitible prize thing quote in the earlier models. The probability that the masses are successful when they stage a revolution is always one.
But this is a strong assumption that does not reflect real world events very well.
They published a paper about how people make a decision to do a revolution. This this was peer reviewed in an economics journal. It's one of the papers that incited in the noble price they gave them when they assumed that revolutions always succeed. Yeah, Nobel prize. And the second paper was one they realized, holy shit, that's.
Not true, mom Melter, isn't it. This is the kind of.
Assumption that these absolute fucking morons make all of the time, all of the fuck. This is why they had to bring in the institu social columnists in the first place to bring the shit in right, because like they're basic models of how humans work. Were like every single human like sits out and calculates a fucking utility curve, figure out where they're going to brush their hair in the morning was obviously not true. That's what I had to bring in game theory in the first place. Right, they
make stupid assumptions like this literally all the time. And again this is one of the ones they're making in one of the papers that was cited in here as the reason they want to know what prison economics.
Yeah, I want to read this models of Cocktail's paper out to everyone. Here's a fun little sentence, and event history analysis finds it, right, so positively associated with political liberalization in one hundred and three non democracies from nineteen ninety to two thousand and four. Attacks by civilians on police stations during the January twenty fifth Egyptian Revolution illustrate one way in which unarmed collective violence can bring about
a democratic breakthrough. Incredible, thank you, We love to see it.
I love this.
That's a pretty normal thing from like I guess you would call it like the center left of like Democrats edition studies stuff.
Right, Yeah, it's the sociology paper.
Yeah, that's like a pretty normal it's like a good life, a good paper. This is from one of the books written by people who won the Economics Nobel Prize.
Quote.
Chapter six explains why several European countries have managed to build broadly participatory societies capable but still shackled states. Our answer focuses on the factories that led much of Europe towards the corridor during the early Middle Ages, as Germanic tribes, especially the Franks, came to invade lands dominated by the
Western Roman Empire. Afterwards collapse, We argue with the marriage of bottom up participatory institutions and norms of Germanic tribes and the centralizing bureaucratic and legal traditions of the Roman Empire forged a unique balance of power between the state and society.
The rise of the.
Oh good for me, so depressing. I spent ten years getting a PhD in history and they've just given these people a Nobel Prize.
But like Jordan Peterson, shit, they have discovered.
But this is the thing, Like these people have discovered the concept of history. Yeah, and they've read like four Wikipedia articles and they've used those Wikipedia articles they started doing regression analysis.
Yeah, and this is this is what they want a Nobel prize. Yeah, this is fake Nobel prize.
Like again, like I've been thinking about, like you know, in physics, what you have to do to win a Nobel Prize, you have to make a prediction about the fundamental nature of the universe that can only be tested by building a fucking machine that can measure a vibration of gravitational ways, which is a It has to be able to measure a ripple in the fabric of space time that is smaller than the diameter of the fucking nucleus of an atom.
That is what you have to do to win the Noble Prize in physics.
What you have to do to win the Noble Prize in economics is realize that institutions affect prosparity.
Jesus, I just cannot like. This has been. This has been the vibess Econdoble Prize episode.
I don't know. I hope this made your day slightly slightly better, because holy shit, this is the fakest prize in the entire world.
Shout out to the economists like I guess I'm eagerly awaiting you discovering some other ship from my one oh one class. Feel free to sign up anytime if you want to get about fucking prize in economics.
I guess ah. All right, well this has been. It can happen here. We'll return.
Yeah, next time they give the economics surprise for tying their shoes of something.
It happened here is a production of cool Zone Media.
For more podcast from cool Zone Media, visit our website fool Zonemedia dot com, or check us out on the iHeartRadio app, Apple Podcasts, or.
Wherever you listen to podcasts.
You can now find sources for it could happen here listed directly in episode descriptions. Thanks for listening.