Investing in Nobel Prize Achievements – Financial Crises

Nobel Prize History

The Nobel Prize is the most prestigious award in the scientific world. It was created according to Mr. Alfred Nobel’s will to give a prize “to those who, during the preceding year, have conferred the greatest benefit to humankind” in physics, chemistry, physiology or medicine, literature, and peace.

A sixth prize would be later on created for economic sciences by the Swedish central bank, officially called the Prize in Economic Sciences, often better known as the Nobel Prize in Economics.

The decision of who to attribute the prize to belongs to multiple Swedish academic institutions.

Legacy Concerns

The decision to create the Nobel Prize came to Alfred Nobel after he read his own obituary, following a mistake by a French newspaper that misunderstood the news of his brother’s death. Titled “The Merchant of Death Is Dead”, the French article hammered Nobel for his invention of smokeless explosives, of which dynamite was the most famous one.

His inventions were very influential in shaping modern warfare, and Nobel purchased a massive iron and steel mill to turn it into a major armaments manufacturer. As he was first a chemist, engineer, and inventor, Nobel realized that he did not want his legacy to be one of a man remembered to have made a fortune over war and the death of others.

Nobel Prize

These days, Nobel’s Fortune is stored in a fund invested to generate income to finance the Nobel Foundation and the gold-plated green gold medal, diploma, and monetary award of 11 million SEK (around $1M) attributed to the winners.

Source: Britannica

Often, the Nobel Prize money is divided between several winners, especially in scientific fields where it is common for 2 or 3 leading figures to contribute together or in parallel to a groundbreaking discovery.

Over the years, the Nobel Prize became THE scientific prize, trying to strike a balance between theoretical and very practical discoveries. It has rewarded achievements that built the foundations of the modern world, like radioactivity, antibiotics, X-rays, or PCR, as well as fundamental science like the power source of the sun, the electron charge, atomic structure, or superfluidity.

Understanding Banks

Structures similar to modern banks have been central to economic development since at least the Renaissance and even in some form in Antiquity. Still, their economic role has been hotly debated since their invention.

An ancient view was to judge usury as an important sin, producing money from money instead of “honest” labor.

Meanwhile, banking has often been central to economic prosperity and international influences of regions like Renaissance Italy, Golden Age Flanders, or the British Empire, with the center of finance often moving to (or enriching?) the most powerful nation of an era.

Banks have also often caused and amplified financial crises, with 1929 and the Great Depression a case in point of bank failures leading to severe economic difficulties lasting almost a decade.

In 2022, the Prize in Economic Sciences, or Nobel Prize in Economics, was attributed to researchers who explored the role banks play in the economy and financial crises. Their findings contributed greatly to avoiding a repeat of the Great Depression in subsequent financial crises.

Source: Nobel Prize

What Banks Do

Most people are not very clear about how banks function in the economy. Essentially, they are institutions where you deposit your money, get loans, and withdraw cash. But where the money goes and comes from is often unclear.

The Core Function Of Loans