How Nobel is Nobel Prize

Noble prize is the ultimate recognition of Human mind.Its a vindication of the fact that Humans are there to support humans and it motivates us to achieve the impossible.Alfred Nobel in his will said "it should be annually distributed in the form of prizes to those who, during the preceding year, shall have conferred the greatest benefit on mankind".And so begun the quest of humans for that coveted prize.

But the selection for Nobel Memorial Prize in Economic Sciences over the years has left me baffled.Noble prize has had its share of criticism over the year but of late a disturbing trend is coming up.The Noble bouquet(committee that selects the winner each year) is probably committing the greatest error of all time,which in many ways is belittling the prestige associated with it.

For last 10 years the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel(as its official called) has being going to the people whose theories are just theories and are not applicable in real world.Just going through the citation of few winners,I can quote the contributions as "for having laid the foundations of mechanism design theory ", " having enhanced our understanding of conflict and cooperation through game theory analysis" or "for having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms".

Well it doesn't take us time to see that most of the theories are either very complicated or practically impossible to implement.Moreover a general trend that has occurred is that most of the winners either supports capitalist model or gives more evidence to prove that its the best model.Here I will like to give a disclaimer that I m one the biggest supports of capitalism and firmly believes that its the best model for a society.But this doesn't make me a blind supporter of capitalism,as there are examples of countries that have done very good under different forms of economic order.USSR was the only country to survive in the great crash of 1929.Cuba has better and cheaper medical facility than USA.Even India is doing well under a mixed economy.China is the next super power.Then why there is such a obsession over capitalism .The answer lies in the new world order.An unipolar world where USA is always correct because it pays our bills.Most of the international organization get their majority funding from USA and thus are held on ransom by it.

Its this fear that does not allow the Noble bouquet to give Mohd. Yunus the Nobel prize for economics and give it to Robert C. Merton who devised new methods of determining the value of derivatives.Ok getting the value of derivatives is important for a trader on the floors of wall street but is it in any way solving the problems of millions of poor across the globe.Is it in any way bringing a smile on their faces?Is this theory giving them a bread for a day?The answer is a pale NO.

Now let us see what Mohd. Yunus has done,he pioneered the micro-finance system in Bangladesh.These Micro-finance or Microcredits are small loans given to entrepreneur who are too poor to qualify for loans from a traditional bank.In a country like Bangladesh where poverty is a way of life,his initiative has changed the life of millions.It all began with a loan of $27 given to 42 women who made around $ 0.2 profit each and repayed the loan to him in 1 year.Thus began the revolution known as Grameen bank which todays caters to over 10 million people.More than 94% of Grameen loans have gone to women, who suffer disproportionately from poverty and who are more likely than men to devote their earnings to their families.The Non Performing Assets of the Grameen bank stands at just 1%(Bear strean once a symbol of USA economy collapsed under these NPAs and Lehmann Bros. have a NPA of over 22%.Our own ICICI has 18% NPAs).The microcredit has brought a sea change in rural Bangladesh,where small entrepreneurs are mushrooming and is helping millions to get a decent and respectable life.Grameen Phone,another non-profit venture of Mohd. Yunus has provided cell-phone ownership to 260,000 rural poor in over 50,000 villages since the beginning of the project(polli phone) in March 1997.Its has changed the way rural Bangladesh used to communicate with their loved ones all over the world.It was these contribution that made him famous all over the world.

But the Nobel bouquet seems to live in another world where poverty is just another incorrigible word,where begin poor is align and bring smiles and joys on the face of poor is just a normal thing or is it the fear of new economic order which replaces big multi-nationals banks and huge financing with a smaller,non-profitable banks or is it the fear of showing the richness and goodness of a different economic approach which a capitalist US economy is so devoid of.For them "having established laboratory experiments as a tool in empirical economic analysis, especially in the study of alternative market mechanisms" is an important achievement which according to Alfred Nobel's will of greatest benefit on mankind, deserves a Nobel prize for economics.If it hadn't been for the people like Bill Clinton,the achievement of Mohd. Yunus might have been forgotten in the pages of history.

It still amazes me how can the Nobel Bouquet think of giving him Nobel peace prize when he has been the greatest economist of 20th century.Is this not an insult of this great man or more importantly is it not the insult of the coveted prize itself,which has not been given the privilege to honor the greatest social-economist mankind has ever seen.