Diane Coyle — Winner of the 2017 Enlightened Economist Prize

As ever, it has been much harder to select one book from my longlist than it was to narrow it down to those ten. After mulling it over for a few days, I can announce today that the winner is Jean Tirole’s Economics for the Common Good. My review of it is here. It has been widely reviewed elsewhere – here is The Economist and the FT and Breaking Views.

The Enlightened Economist
Winner of the 2017 Enlightened Economist PrizeDiane Coyle | freelance economist and a former advisor to the UK Treasury. She is a member of the UK Competition Commission and is acting Chairman of the BBC Trust, the governing body of the British Broadcasting Corporation

Also see

Terry Mollner, Common Good Capitalism is Inevitable: It is the only economic model that both builds on free markets and represents our next layer of maturity in the skill of self-consciousness (2016)

___________, Common Good Nation: It is time to create a parallel nation based on agreement rather than geography  (2017)

Terry Mollner is co-founder and director of the Calvert Social Funds and founding member of the Common Good Movement. His book, The Love Skill, can be downloaded as an ebook here.

Herman E. Daly and John B. Cobb Jr., For The Common Good: Redirecting the Economy toward Community, the Environment, and a Sustainable Future (1994)

Mark A Lutz. Economics for the Common Good: Two Centuries of Economic Thought in the Humanist Tradition (Routledge Advances in Social Economics) (1999)

Matias Vernengo — Jean Tirole is afraid of heterodox economics

Jean Tirole thinks that conventional economics is science rather than a subset of social and political philosophy mixed with history, psychology and cognitive science, sociology, anthropology, and political science.

He is wrong about that.

If economic is conventional science, it is junk science and should be junked before it does more damage.

Of course, Tirole would simply ignore heterodox economics if it were not for the formidable success of Piketty's work and his indictment of conventional economics even though he has mastered it and uses its tools deftly. Might this success be sticking fear on the hearts of conventional economists now that they cannot avoid dealing with one?

Naked Keynesianism
Jean Tirole is afraid of heterodox economics
Matias Vernengo | Associate Professor of Economics, Bucknell University

Matthew Yglesias — One paper by Nobel Prize winner Jean Tirole that every internet user should know

Two-sided markets. Razor makers learned long ago to give away the razors and charge for the blades.

Then the issue is how to regulate against erection of entry barriers to create a monopoly when the product is essentially free and the profit is on the other side of the market. 

VOX
One paper by Nobel Prize winner Jean Tirole that every internet user should know
Matthew Yglesias

Bill Black — Hold Your Wallet When the Swedish Central Bank Prize Rewards “Clever”

"Nobel" smackdown.

The Bank’s prize announcement stresses that Tirole was selected because of his “clever” approach to regulation, including financial regulation. So the obvious question is how Tirole, in authoring his book on corporate finance theory and as the exemplar of “clever” approaches to financial regulation missed the crisis, missed the causes of the crisis, missed the causes of past crises, and advance ideas on financial regulation that would not have prevented our banking crises? The subsidiary question, also close to unique in economics, is how he could get so much so wrong by ignoring the work on these crises by a recipient of the Bank’s prize in 2001 (George Akerlof) by savings and loan regulators, white-collar criminologists, and a series of successful civil, administrative, and criminal actions? In other fields, the failure to cite and discuss the relevant work of a recent Nobel Laureate would cause the author to be viewed as an embarrassment to the field.…

Tirole knows about the “C’s” of loan underwriting – they’re in his book on corporate finance. Because he has not read, or failed to understand, the relevant literature on the S&L debacle he not only proved that hindsight about that debacle suffered from galloping myopia rather than being 20:20. Effective loan underwriting had to be eviscerated for the epidemics of loan fraud to rage as they were when he wrote and published his book on corporate finance in early 2006. Tirole failed to recognize or understand the criminogenic environments that produced the three epidemics of home lending fraud that were evident at the time he wrote his book. There is no evidence that he understands those three fraud epidemics even today. He exemplifies the tragedy and staggering opportunity costs of economics and economists.

New Economic Perspectives
Hold Your Wallet When the Swedish Central Bank Prize Rewards “Clever”
William K. Black | Associate Professor of Economics and Law, UMKC

David Ruccio — Nobel economics

Oligopoly.

One story that can be told about today’s announcement is the Royal Swedish Academy of Sciences’ own announcement: that French economist Jean Tirole has been awarded the The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel for 2014 because he “has clarified how to understand and regulate industries with a few powerful firms.”

The other story is: Tirole has shown how much the real world of capitalism—industries that are dominated by a few firms that have extensive market power, which can charge prices much higher than costs and block the entry of other firms—differs from the fantasy taught in countless introductory courses in economics: a world of perfect competition, which has no negative effects on society and which therefore doesn’t need to be regulated.

Occasional Links & Commentary
Nobel economics
David F. Ruccio | Professor of Economics University of Notre Dame Notre Dame

Mark Thoma — Jean Tirole Wins Nobel Prize in Economic Sciences

Short synopsis and links to many posts on Tirole.

Economist’s View
Jean Tirole Wins Nobel Prize in Economic SciencesMark Thoma | Professor of Economics, University of Oregon