14th Vernon Smith Prize 2021: Winner Announcement

Vernon Smith Prize 2021 | The winners are:

1st Prize:
David McMillan (UK)
Essay: “Economics Set Free: In Defense of Hayek”

2nd Prize:
Niels Behrmann (D)
Essay: “The Arrogation of Knowledge and its Consequences”

3rd Prize:
Mateusz Michnik (PL)
Essay: “The Pretense of Knowledge as an Unsuccessful Method of Governance: The Polish Case”

The Vernon Smith Prize 2021 was an essay competition for the advancement of Austrian Economics – sponsored and organized by ECAEF – European Center of Austrian Economics Foundation, Vaduz (Principality of Liechtenstein). Topic:

The Pretense of Knowledge as a Method of Governance

“I am the wisest man alive, for I know one thing, and that is that I know nothing.”

Socrates

Due to the fact that it is not immediately obvious why governments should not imitate the methods of the so-called hard sciences to design the perfect policies or practices of governance, politicians and their advisors became captivated with the advancement of science and the enormous processing power of computers.

As a result, they were persuaded to confuse the precision of mathematical models and their collected piles of quantifiable data with their factually rather limited knowledge about how societies work. Fooled into believing that statistics based on stored data are the most critical, governments are busy to rearrange them, compute averages or draw erudite charts in order to propose their solutions. However, as people demand results, politicians eager to satisfy the public often conspicuously announce their ‘scientifically’ looking solutions that often worsen the problems. Overconfidence in the methods of the hard sciences to control society can easily turn democracies into tyrannies and will lead to the destruction of a free society, which is the result of human action, but not of human design.

This ‘Pretense of Knowledge’ is not only a serious threat to individual freedom and democracy as it alludes to a pretended competence to design and execute a centrally planned society. It is also dangerous for both methodological and policy reasons. However, societies of free people are a living, changing, moving web of disparate actions and entities. And as long as individuals remain free every law, every institution and every human action is composed of countless subjective judgments and motivations of independent individuals interacting with one another without coercion.

Vernon Smith Prize 2021

– 1st Prize: €4,000  –
– 2nd Prize: €3,000  –
– 3rd Prize: €2,000 –

Vernon Smith Prize 2021 | An international jury did judge the essays and the three winners are now invited to present their papers at a special virtual event on 7 February, 2022. Due to Corona restrictions, the organisers did again choose the virtual option.

The International Vernon Smith Prize has been established in 2008 by ECAEF for the advancement of Austrian Economics. It is named after Professor Vernon Lomax Smith (born on January 1, 1927). He is professor of economics at Chapman University’s Argyros School of Business and Economics and School of Law in Orange, California, a research scholar at George Mason University Interdisciplinary Center for Economic Science, and a Fellow of the Mercatus Center, all in Arlington, Virginia. Smith shared the 2002 Nobel Memorial Prize in Economic Sciences with Daniel Kahneman. He is also the founder and president of the International Foundation for Research in Experimental Economics, a Member of the Board of Advisors for The Independent Institute, and a Senior Fellow at the Cato Institute in Washington D.C.