When prizes are given, it’s easy to miss their significance. They happen so regularly, the clocklike monotony and the recurring debates about who was left out and who should have got one tend to obscure the moment itself.
, John Cassidy records that when a full-blown financial crisis erupted: “Bernanke heeded the lesson of the thirties, and the messages of Diamond and Dybvig, going all out to prevent a wholesale collapse of the banking system. He encouraged Congress to bail out the biggest banks.”
Yet, the cataclysm of 2008 really changed the course of economic thinking. Cassidy adds: “Before the financial crisis, Wall Street lobbyists and free-market economists had claimed that banks could be left to their own devices, and that, if some of them did get into trouble, the regenerative powers of the free market would somehow prevent a broader economic calamity.
Hence, Friedrich Hayek, Ronald Coase, George Stigler and Milton Friedman were all honoured, but many noted left-leaning economists, including John Kenneth Galbraith, Joan Robinson and Hyman Minsky were overlooked, Cassidy points out. Not all economists were against economic intervention, including, as it happens, Friedman. But generally, they felt the economy should be left to its own devices.
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