Nobel Shows That Economists Can Save Lives, Too
The Nobel committee's choice for today's prize in economics sends a useful message at a time when the field's reputation is still smarting from the blow dealt by the financial crisis: Economists can actually save lives.
In recent years, the media -- including the 2010 documentary "Inside Job" and the editors of Bloomberg View -- have rightly taken academic economists to task for falling short of the discipline's noble goal, which is to make people better off. Institutionalized tunnel vision and monetary ties to Wall Street have sometimes left economists blind to, or even complicit in, developments -- such as risks building in the financial sector -- that affect the livelihoods of millions.
That said, the awarding of the Sveriges Riksbank Prize in Economic Sciences to Lloyd Shapley and Alvin Roth, both of whom are connected to large, mainstream institutions, serves as a reminder that economics is a multi-faceted field, and economists can do a lot more than build flawed models, take on lucrative consulting gigs and write papers for clients.
The Nobel committee recognized Shapley and Roth's work on how to make matches in markets where there are no prices. Roth has found various practical applications, including pairing kidney donors with recipients. Kidney-exchange programs using Roth's algorithms have already saved hundreds of lives in the U.S. Judging from his research, they could save more -- and save a lot of money on dialysis costs -- if Medicare covered the expenses of kidney donations.
Economists still have a lot of work to do to reset their collective ethical compass. But they're doing some good in the meantime.
(Mark Whitehouse is a member of the Bloomberg View editorial board. Follow him on Twitter.)