Monday, October 09, 2006

Significant Inequality for Nobel Prizes?

I have analyzed the Nobel Prizes in the sciences: chemistry, physics, medicine and economics. Since 1901, there have been 587 Nobel prizes awarded to recipients from 32 countries. Here is my dataset. Using income data from the IRS, I was able to make this comparison of outcomes by percentiles for both: a) the share of total income earned by different percentiles of taxpayers, and b) the share of all Nobel prizes earned by different percentiles of countries:



Share of Total Income

Share of All Nobel Prizes


Top 10%

44.4%


65.4%


Top 25%

66%


83.5%


Top 50%

86.5%


94.4%




For example, the top three countries for Nobel Prizes are the US (265 awards), UK (82) and Germany (37), and these three countries together represent about 10% of all countries, and have earned 384 Nobels, or 65.4% of all prizes.

A previous analysis I did of Olympic medals shows the same outcome as well. Maybe we can learn a lesson from the Nobel awards: unequal results should be expected as the natural outcome of any competitive process, whether it is sports, science, education, or national income.

The Nobel prize winners are respected and admired, despite the gross inequality of outcome. Perhaps we should pay the same respect to the winners of our free enterprise system - the successful workers at the top of our economic ladder. Or should we maybe redisbribute the Nobels in the interest of "fairness" and "equality?"

5 Comments:

At 10/11/2006 10:38 AM, Anonymous Walt G. said...

I do not know about equity or fairness, but it seems to me that if the bottom 50% of the people have to share 3.3% of the income in the country, serious social problems surely exist attributable to this disparity. How could they not?

In fact, I imagine some of the bottom 50% just take what they need or want from the top 50%. I can't cite a source offhand, and I could be wrong, but I believe a poverty to crime correlation exists and has been proven in numerous studies. A "google" search of the combined words of "poverty" and "crime" turned up 13,500,000 hits. Somebody out there must think there is a connection!

Possibly if income were distributed differently, spending on corrections would decrease. Crime would decrease. And, everyone would share a better life. Since the bottom 50% does not have enough money to pay for the criminal justice system, it stands to reason that the top 50% must be paying for almost everything anyhow.

Imagine when the top 50% have 100% of the income—the dramatic rate of increase since 1986 shows that possibility. Do you think the civil unrest that is sure to follow will provide quality of life for those who have the money? What good is all that money when you can't leave your own house/compound without a private army? Desperate people do desperate things. Most civil wars are fought over real or perceived inequities.

As I said before, I do not know about equity or fairness, but I do know that if 50 people have 97 out of 100 apples, and apples are the only thing to eat and survive starvation, the other 50 people probably will not be fighting each other for the remaining 3 apples. Let us hope the first group are either fast runners or good fighters!

 
At 10/11/2006 8:44 PM, Blogger Mark Perry said...

My prediction: If you took all of the income or wealth in the economy, and redistriubted it evenly among all people in society, we would achieve at least temporarily a completely equality of income/wealth. But within a short period of time, say 5 years, we would have the same inequality of income and wealth as we have today. It's a natural outcome, and a sign of a dynamic economy, with the highest possible standard of living.

"A society that puts equality ... ahead of freedom will end up with neither ... " -- Milton Friedman

 
At 10/12/2006 9:35 AM, Anonymous Walt G. said...

I think you are right. Indeed, there will always be unequal outcomes. But, I never proposed an even distribution of income--just a more fair distribution. I do not know exactly how to define fair; I am sure few people would feel it is a 97% to 3% split on life-and-death issues.

What is your definition of a natural outcome? Is government interference or non-interference or even the existence of government itself natural? If government is not natural, how can we still have natural financial outcomes? Do we need government? And, if so, what is its purpose? Should government attempt to shape society and help those who are least able to help themselves?

I know that I have a lot of questions, and few answers, but I do not see how we can disentangle positive economics from normative political philosophy. I will close with a quotation from the United Nations' General Assembly that may provide some direction for the answers. I realize that we do not always agree with the United Nations' decisions; however, we are still a member of the organization and probably should try to follow its basic founding principles.

"Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, and housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control."

Universal Declaration of Human Rights adopted by the U.N. General Assembly in 1948, article 25-1 G.A. res. 217A (III), U.N. Doc A/810 at 71 (1948)

 
At 10/13/2006 12:54 PM, Blogger ed said...

Huh? Are you weighting by country population somehow?

 
At 10/14/2006 10:34 AM, Blogger JN said...

Amazing stats. I think there is a lot of reason behind this logic - a dynamic economy can not be expected to redistribute income, Nobel Prizes or Olympic medals according to certain ideological ideas about "fairness".
But beware that you are committing yourself to a reasoning that might lead right into the naturalist fallacy: You can't derive an "ought" from an "is".
Just because the dynamic forces of market economies appear to act in a certain way doesn't mean that this automatically is morally supreme.

 

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