Three Cheers for the Nobel Economic Prizes!
After the weird “future” award to President Obama of the Nobel Peace Prize, another Nobel committee has made a brilliant choice – awarding the Economics prize to Elinor Ostrom and Oliver Williamson. Their work follows the lead of Ronald Coase (himself a Nobel prize winner years ago), which showed that the institutions of liberty are far richer than the atomistic market concepts of buying and selling.
Coase asked, the question, “Why are there firms?” – which Williamson has explored further. Like Coase, he sought to understand the reasons why firms take on the structures that they do. His work is a welcome warning of the dangers that overzealous antitrust regulators can pose to economic growth.
Eilinor Ostrom is a wonderful choice – coming far outside the normal priesthood of economics. Her work (some together with her husband Vincent) has focused on the ways in which traditional societies manage commons. Her work makes clear that property rights evolve in response to scarcity – often illustrated by real-world cases ranging from the allocation of lobster rights in Maine to water rights in California.
CEI’s work on environmental and competition policy relates closely to the works of both these award recipients. On this one, the Nobel Committee got it right!