Just for once the right people got a prize

The Nobel Peace Prize has a mixed history, but today they got it right when they awarded it to the Grameen Bank, created by Muhammad Yunus. The bank represents one of the most effective approaches to dealing with world poverty that I know. I often cite it as one of the best examples I know of complexity based management. It was the inspiration behind our development of Social Network Stimulation, a method designed to facilitate bottom up self-organisation to solve intractable problems.

The Grameen bank has a 98.85% recovery rate on its loans to some of the poorest people in the world. It achieves that without credit scoring or bureaucracy, but by self selected lending groups who guarantee each others debts. Now I hope the economists of the world are ashamed, why has Yunus not won the Nobel Prize for Economics? The bank was founded in 1976 and by 1995 it no longer needed donor capital. This is what economics should be about. Of course the same community denegrated one of the pioneers of complexity theory, Brian Arthur to the point of resignation when he challenged the orthodoxies of their profession. It’s worth reading the story of the painful journey he had to take to get any recognition.

Given the importance of economics to our lives, it would be nice to think that the profession is open to, and capable of recognition of new ideas. Regretably they seem better at maintaining old orthodoxies long past their sell by date.