Offer: Yes. Social democracy is something that manual workers, trade unionists, were able to advocate and to think up and administer, whereas in economics only the most clever qualify. There is a contradiction there: On the one hand, I've been told only a practical economist can discuss this thing. On the other hand, economics does assume that every individual, every economic agent, is as fully equipped as economists to make decisions in a rational way.
Among the Nobel Prize winners, there's really only one straight advocate of social democracy, and that is Gunnar Myrdal, who is a Swede. There's another social democrat who is notorious for not having received the prize, and that is John Kenneth Galbraith, who on most criteria I think should have received the prize. Quite a few of the Nobel Prize recipients were inclined in terms of their values to support social democracy, but not in terms of their doctrines. So they suffered from a kind of cognitive dissonance: In general, the economics discipline, as indicated in surveys, is quite positive toward social-democratic norms. But the doctrines themselves do not leave much room for that.
Venook: You identify Galbraith and Rudolf Meidner as the two clearest examples of distinguished social-democratic thinkers who did not receive the Nobel Prize. Why did they get overlooked?
Offer: With regard to Galbraith, I actually discussed this with the long-standing chairman of the prize, Assar Lindbeck, and he said that he regarded Galbraith as a belletrist, a writer of essays. I actually beg to differ. Several literary economists, people who did not use equations, who did not use mathematics, have been awarded the prize. In terms of citations, many Nobel Prize-winning economists were much less cited than Galbraith. Galbraith wrote at least one classic, The Affluent Society; it's a book that holds its own, even today. I personally think he was simply blackballed.
Meidner's achievement was greater than Galbraith's in practical terms. He devised a model which was actually applied, very successfully, in Sweden. He was also a direct adversary of Lindbeck and his group, so I think it was very unlikely that this particular cabal, this very small group of economists who took it upon themselves to define what economics was, would give it to Meidner, although he was equally deserving.
There's another left-wing economist who was blackballed, and that's Joan Robinson. Only one woman has won the Nobel Prize in Economics, and she wasn't even an economist, and that's Elinor Ostrom. Well, there was a worthy candidate in the 1970s, and that's Joan Robinson. Businessweek thought she would get it, but she didn't, because I think at that time she was too left-wing for the prize.
Venook: In contrast to the people who were overlooked, you point to several winners who were controversial in their own right, particularly those who had a role in Augusto Pinochet's regime in Chile: Friedrich Hayek, Milton Friedman, Arnold Harberger, and James Buchanan. Could you go into the controversy there?