Joel Mokyr, a Dutch-born professor of economics and history at Northwestern University, is one of three researchers awarded the Nobel memorial prize in economics Monday for explaining how new products and inventions promote economic growth and human welfare.
Mokyr, 79, learned about winning the prize at about 4 a.m. Monday morning.
“It was kind of an odd thing because we were in our summer place in Michigan, and I got up early in the morning, and I dashed off to my laptop to check what happened with the [Israeli] hostages,” Mokyr, who was raised in Israel, said during a phone interview. “I went to check my news but my eyes fell on the email inbox and I got all these messages that say, ‘Congratulations.’ I go, ‘Congratulations? It’s not my birthday.’ Then I looked at my phone, and I realized I have an unanswered phone call with a country code of Sweden.”
The winners were credited with better explaining and quantifying “creative destruction,” a key concept in economics that refers to the process in which beneficial new innovations replace — and thus destroy — older technologies and businesses.
The other winners are Philippe Aghion, 69, who works at the Collège de France and the London School of Economics, and Canadian-born Peter Howitt, 79, at Brown University.
“The laureates’ work shows that economic growth cannot be taken for granted. We must uphold the mechanisms that underlie creative destruction, so that we do not fall back into stagnation,” said John Hassler, chair of the committee for the prize in economic sciences.
The Nobel committee said Mokyr “demonstrated that if innovations are to succeed one another in a self-generating process, we not only need to know that something works, but we also need to have scientific explanations for why.”
Mokyr is considered an optimist about recent technological innovations. About a decade ago, many economists argued that inventions such as smartphones or even the internet had less of an economic impact than previous developments such as the airplane or the car.
Mokyr responded that because many new services were either cheap or free, their impact wasn’t evident in economic data, but they still provided enormous benefits.
“The theory is essentially the following: That what has made our modern society rich and thriving and prosperous, and which makes us live twice as long as we did a century and a half ago, and which allows us to send our kids to college and retire at an early age, eat well and be well dressed and get medical care, all of that is driven mostly by an increase in what I call useful knowledge,” Mokyr said. “That is to say some combination of science and technology that allows us to do things that are forefathers we only dream about.”
“I think that humans are incredibly ingenious, and as long as we get the institutions right and we give people the freedom to experiment, if necessary, the funds to do research, humans will come up with all kind of clever ways of making our lives better and the challenges that we’re facing,” Mokyr said. “We’re facing enormous challenges… One is, of course, climate change and global warming, which will be the greatest challenge that humans have faced since the last Ice Age. And the second is the aging of the population and the decline of fertility … We face enormous challenges, and the only way we can possibly resolve them is by being even more clever.”
One half of the 11 million Swedish kronor (nearly $1.2 million) prize goes to Mokyr, and the other half is shared by Aghion and Howitt. Winners also receive an 18-carat gold medal and a diploma.
The economics prize is formally known as the Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel. The central bank established it in 1968 as a memorial to Nobel, the 19th-century Swedish businessman and chemist who invented dynamite and established the five Nobel Prizes.
Since then, it has been awarded 57 times to a total of 99 laureates. Only three of the winners have been women.
Nobel purists stress that the economics prize is technically not a Nobel Prize, but it is always presented together with the others on Dec. 10, the anniversary of Nobel’s death in 1896.
Nobel honors were announced last week in medicine, physics, chemistry, literature and peace.
Northwestern President Henry S. Bienen said the award is a tremendous honor for Professor Mokyr and for the university.
“Joel has been an invaluable member of one of the leading economics departments in the world, as well as to our influential history department, and he has had a profound impact on our understanding of both economics and history by incorporating culture into the analysis of economic growth,” Bienen said in a written statement.
His wife, Margalit, also a professor, is pleased her husband is receiving acknowledgement.
“We always are happy to get recognition for our work because we spend long hours on it,” she said.
Joel Mokyr summed his honor this way.
“I’ll tell you one thing nobody goes to become a professor to get rich, but the one thing that you really do care about is the recognition by your peers. And clearly this is a recognition by our peers, so there,” he said.