Nasim Taleb has a great piece in the FT arguing that the economics Nobel's are not just clever but dishonest marketing, but are actually damaging to the financial system. Taleb claims:
The environment in financial economics is reminiscent of medieval medicine, which refused to incorporate the observations and experiences of the plebeian barbers and surgeons. Medicine used to kill more patients than it saved – just as financial economics endangers the system by creating, not reducing, risk.
His argument is that the Nobel gives legitimacy to methods, results and a whole discipline taught in Business Scools whose only virtues are to provide cod-scientific foundations to methods and practices that makes ense, when they do, in the framework of accumulated, empirical wisdom of risk traders. But once taken out of that framework and given spurious theoretical grounding, they become manipulable - indeed they invite "financial engineering". Taleb amsuingly charts the histories of 20 years of financial crisis through the coresponding Nobels rewarded despite their causal role in creating them. Business Scools, with their competition to out-academize each other,follow the game of transmitting dangerous and misleading tools to the next generation of bankers.
Taleb's first book, Fooled by Randomness, has the wonderfully provocative thesis that success in finance has nothing to do with skill, and everything to do with the ability of the successful to re-write episodes of history to give themselves maximal causal involvement in any success.
A stategy familiar to parents of competing children.
