The Nobel Prize in Inscrutability (i.e. Economics) Goes to...

The ability to generate a large body of work on matters whose importance are shrouded in mystery is a key attribute of all world-class economists, and Nobel laureates Ostrom and Williamson are in the vanguard.
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News that Americans Elinor Ostrom and Oliver Williamson have won the Nobel Prize for economics sent the already contentious community of social scientists into a predictable tizzy.

Several factors seem to have catapulted the two, who were separately lauded for their respective work, to the top rank of a beleageured profession. "We primarily recognized each for the inscrutability of their contribution," said an unnamed representative of the Nobel committee, who made himself available from a phone booth in Stockholm. "Of all economists now working in the world, these two are among the least comprehensible to the general public and even their peers, especially in their native English."

The sheer opaqueness of each to the untutored observer is best conveyed in the news reports announcing their selection. The NY Times, for instance, reported that:

In its announcement, the committee said Ms. Ostrom "has challenged the conventional wisdom that common property is poorly managed and should be either regulated by central authorities or privatized. Based on numerous studies of user-managed fish stocks, pastures, woods, lakes, and groundwater basins, Ostrom concludes that the outcomes are, more often than not, better than predicted by standard theories."

Mr. Williamson's research, the committee said, found that "when market competition is limited, firms are better suited for conflict resolution than markets."

What? Other reports are not much more illuminating, nor is the Wikipedia entry for Mr. Williamson, which states:

His focus on the costs of transactions has led Williamson to distinguish between repeated case-by-case bargaining on the one hand and relationship-specific contracts on the other. For example, the repeated purchasing of coal from a spot market to meet the daily or weekly needs of an electric utility would represent case by case bargaining. But over time, the utility is likely to form ongoing relationships with a specific supplier, and the economics of the relationship-specific dealings will be importantly different, he has argued.

Eh? One thing is clear: The ability to generate a large body of work on matters whose importance are shrouded in mystery is a key attribute of all world-class economists, and Ostrom and Williamson are clearly in the vanguard here.

Economists, of course, are a testy and opinionated bunch, and the selection of these particular practitioners of the dark art engendered the predictable sniping and grousing among the white-socks-and-Birkenstocks cognoscenti. "I don't know why I didn't win," said Max Farbush, who lives near Stanford and often visits the neighborhood around Wharton for its cheese steaks. "I'm as incomprehensible as they are." When pressed, Mr. Farbush revealed that his work centers on the relationship of markets to their produce. "There's no rational reason that eggplants should cost as much as they do," he stated. "It's clear that subjective perceptual issues enter into such transactions."

Speculation has already begun as to the 2010 winner, and a short list is now making the e-mail rounds. It's too early to pick a favorite, of course. But while professionals like Mr. Farbush are clearly being considered, the smart money remains on game changers who are right now shaping the world recovery, which places one name at the top of any prospective list. When called to respond to their rumors, the White House declined to offer a comment.

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