
Since 1901, December has been a time for Nobel Prizes. Only in 1969, as an afterthought, the Swedish Central Bank established the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel — a decision that was met with protests by some members of the Nobel family.
Nevertheless, a scientist who used much of his time on economics was rewarded a Nobel Prize in 1921. Admittedly, Frederick Soddy (1877–1956) received the prize in chemistry, for his work on radioactivity. But in the period from 1921 to 1934 Soddy wrote four books campaigning for a radical restructuring of the global monetary system.
I have been leafing through Soddy’s book entitled, ‘Money versus Man’, published in 1931.[i] The book opens with a full-page quote from another English polymath, John Ruskin (1819–1900).[ii] The social problems of England in the 1840s — ‘The Hungry 40s’ — and the financial crises that followed in 1847 inspired Ruskin. The mass deaths in World War I and the crisis that started in 1929 provided new inspiration to Soddy.
For Ruskin, and later Soddy, consumption was the only purpose of the economy. ‘There is no wealth but life’ is the basic message in Soddy’s long quote from Ruskin. It is on this basis we should read the title of Soddy’s book, placing money as a kind of enemy for humankind. Here is a new type of economics: we have standard neoclassical economics, based on the metaphor of equilibrium between supply and demand, and we have evolutionary (Schumpeterian) economics based on a metaphor from biology (innovations as mutations). Soddy offered us a third angle: economics rooted in physics, in the laws of thermodynamics.
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