The Prize - Section 2

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Some Not So Sordid History

For a change of pace, consider a few counter-examples to Nobel Prizes causing some hoo-ha. What about some prize winners that are trying to benefit humanity by adverting some hoo-ha? Amartya Sen and Joseph Stiglitz say we are being robbed. I think it is more like raped, pillaged and plundered.


In 1998 Amartya Sen won the Nobel Prize in Economics. In April of 2012 he presented a lecture about ethics and public policy. He said:


“The common tendency to ignore how nasty the world is helps many injustices to remain unexamined and remedied.” retrieved 2012-11-09


He pointed out that while we can agree on what to remove as a source of injustice, we will never agree on what will make the world perfect and just. This reminds me of the USA Declaration of Independence. Let’s see:

When in the course of human events, it becomes necessary for people to dissolve the governmental binds which have served them, and to assume among the powers of the world of humanity, the separate and equal station to which the natural laws of all people entitle them, a decent respect to the opinions of all people requires that they should declare the causes which impel them to create a new set of ethical economic conventions.

--Well something like that.


Joseph Stiglitz won the Nobel Prize for economics in 2001. On Friday 09 November 2012 The Independent tells us what Joseph suggested.


The Barclays Libor scandal may have shocked the British public, but Joseph Stiglitz saw it coming decades ago. And he's convinced that jailing bankers is the best way to curb market abuses. retrieved 2012-11-09


Do you know what the “LIBOR” is and why bankers would abuse its estimation? The LIBOR is an important benchmark that bankers use to set what interest rate they are offering to customers. Shave a few points here and there and take home more moolah. It is just like allowing false information to change the odds on some race-horse. Is it really fraud if the player “stumbles” one extra time during the game? Bobbie had so much money, why does this sort of thing happen.


Evidently, after too much money, it is just the challenge of playing the game. If the referee is blind in one eye and cannot see out of the other, who going to know?  Even good people can be tempted to do wrong, sometimes. I lock my car to keep honest people honest; but a professional thief can get around my lock with ease. We the people are guilty of not locking our bankers up. It has been said that power corrupts, and absolute power corrupts absolutely.


Oh, bye the way, such “white collar” criminals do not need a prison different from any other. Such is not cruel or unusual punishment. The fact that prisons do not work and cost too much does not mean that I ascribe to eugenics, but criminal sentencing is a different book.


One thing is clear to me, we the people are paying for the wrongdoing of “white collar” criminals and if the USA economy goes over the preverbal cliff, what we will suffer will make the austerity programs seem mild.


Please do not get the idea that just because I listed several sordid tales and now two counter-examples that the list of seamy Nobel tales is exhausted. No, not by a long shot, the list is still longer. If we pay attention to the Nobel Prize winners above, what should we learn about power?


Looking back a few years, as the World entered the Twentieth Century the USA seemed to be at that awkward age.  The Spanish-American War had just ended. The anti-trust sentiment is growing. In the USA, some say the power structure saw Theodore Roosevelt as a threat. In an attempt to sideline Roosevelt they arranged for him to become Vice-President. As History would have it, President William McKinley was assassinated, any alleged conspiracy backfired and Theodore Roosevelt became President in 1901.


Great wealth and power had been amassed by a few industrialists in the USA. Railroads, Steel, Oil, and others were controlled a few. The attending abuse of the working class would trigger a changing of the guard. Ten years earlier the Sherman Antitrust Act had been passed but not enforced. Before Roosevelt became President, it had been standard practice for big business to “corner the market” and thereby increase profits. In contrast, the concept of free-enterprise was to allow competition to regulate consumer prices. Similarly, labor's wages and benefits needed leverage to counter power abuse.


Against this backdrop of rising social unrest, the banking and stock markets were also suffering from abuses of power. During an attempt to corner the market of copper, Wall Street and the entire Banking industry fell into the Panic of 1907. The collusion of many bankers in the failed attempt to corner the market in copper left many of them over extended. The Banks began to fall like a house of cards. The few solvent banks tried to stem the tide of a rush to withdraw funds from banks. Without funds from the banks, Wall Street was unable to buy and sell stocks. J.P. Morgan returned from his trip to lead the recovery and amass greater power and fortune.


As a result of the Panic of 1907, Westinghouse began to loose control of his company. Soon a proxy vote would force him to step aside from Westinghouse Electric, but retain control of other businesses he owned. What part J.P. Morgan played in all this drama may be debated, but Morgan was not above causing such chaos to get his way. It would be wrong to think that Morgan would not take full advantage of this kind of situation, even if he had not directly caused the panic.


Morgan had backed Edison in the battle of the currents. Westinghouse had backed Tesla. Edison was building a power and light company called Edison General Electric based on DC power distribution. Westinghouse under bid Edison at the critical 1893 World's Fair: Columbian Exposition and powered it with AC. Based on that success Westinghouse landed the first Niagara Falls AC power generation contract. Thus the battle of the currents was soon settled, AC became the standard for power distribution.   


AC remained the power of choice because of technical considerations. DC or AC could be transmitted over the same distances. The practical and technical consideration was that voltage had to be raised as the transmission distances increased. AC and DC could be generated and transmitted at high voltages. The problem was that they would have to reduced to about 100 volts at the point of use. DC could be reduced by having a high voltage motor drive a low voltage generator, but that solution was too expensive. The key to AC remaining the winner came from a different way to reduce the voltage at the user end of the power distribution system, transformers.  


On March 20, 1886 William Stanley, Jr. and Westinghouse demonstrated the first AC power system using transformers. This became the prototype of the power systems still in use today. Transformers do not work with DC. In 1890 Stanley founded the Stanley Electric Manufacturing Company. Morgan saw that Westinghouse was out and Edison was also out of GE. In 1903 GE bought the Stanley Electric Manufacturing Company with J. P. Morgan’s help.


With that, Morgan was again on the winning side and firmly in control of the new Electrical Power Industry. With all the anti-trust actions, Morgan cleverly positioned himself as financer rather than owner. For Morgan and others who came after him, money was important, but power was more important. With controlling interest they had the real power.  Why did Morgan want to monopolize the Electrical Power Industry? One important factor was that Morgan's rival, Rockefeller owned Standard Oil and had become wealthy selling Kerosene to light homes. Morgan was going to steal Rockefeller’s source of power and wealth. Electricity would light the homes and factories and fate had Standard Oil switch to powering Automobiles. I and some other Historians might wonder why the Automobile did not go electric at that time, but back to our story.

That little known 1886 demonstration was one of the most important landmarks of the Industrual Age. Tesla, Westinghouse, and Stanley could have shared aNobel Prize. Think about it, most everything we had in the Twentieth Century was plugged into the wall. Even the rural areas proved practical to electrify because of the advantages of AC power. Most all of the benefits to humanity that have followed have been connected to AC power. The entire world was changed forever. While there have been improvements; through these many years of great technological advancement, power distribution is essentially the same as that 1886 demonstration.

Other Prizes

Why does the Nobel Prize capture so much public attention? I assume it is a large enough amount of money that it teases the imagination with the plausible path to having a better life. This plausibility is magnified by the idea that they could discover some new scientific fact, however improvable. Perhaps people just want to know who and what is changing the world they live in; true for a few, but for most people that seems doubtful. Perhaps people like to root for the “underdog” working years in some laboratory for a token salary and fate finds one of a multitude of unknowns to focus the bright light of such an honor.


Whatever the reason, the Nobel Prize is quite famous, of that there can be little doubt. What other honors languish with less celebrity, and why?    

Google Lunar X PRIZE, $20,000,000 one time award to the first privately funded team to land a robot on the Moon that successfully travels more than 500 meters and transmits back high definition images and video.


Progressive Insurance Automotive X PRIZE, $10,000,000 awarded one time in 2010 and divided between three competitions. 


Gottfried Wilhelm Leibniz Prize, € 2,500,000 research grant awarded annually.


Fundamental Physics Prize, $3,000,000 awarded annually. Founded in 2012, it became the worlds largest annual academic prize.


International Balzan Prize Foundation. 1,000,000 Swiss Francs awarded annually to four winners.


Dan David Prize, $1,000,000 awarded annually to three winners.


Prince Sultan Bin Abdulaziz International Prize for Water , One million Saudi Riyals awarded biannually.


Shaw Prize, c. $1,000,000 awarded annually.


Millennium Technology Prize, € 800,000 awarded semiannually.


Abel Prize, 6,000,000 Norwegian krone awarded annually.


Charles Stark Draper Prize, $500,000 awarded annually.


Fritz J. and Dolores H. Russ Prize, $500,000 awarded annually.


Bernard M. Gordon Prize, $500,000 awarded annually.


Lemelson-MIT Prize, $500,000 awarded annually.


Perhaps it is not the money or fame that is most important to a scientist, it may be scientific prestige, albeit the other two are important. If some Scientists see the fame of the Nobel Prizes as over-rated, there are other prizes and awards. Few Scientists would refuse the award.

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