2 Americans Share Nobel Honors : Pair Honored for Economic History Work

For the fourth year in a row, a professor from the University of Chicago has won the Nobel Prize for economics--this time as part of a joint award, announced Tuesday, that elevates the study of economic history to a new level of respectability.

University of Chicago Prof. Robert W. Fogel, author of a controversial book about the economics of U.S. slavery, and Washington University economist Douglass C. North, whose work analyzed the role of institutions in the prosperity of nations, were chosen for the 1993 award.

Fogel, 67, and North, 72, are believed to be the first Nobel recipients in the field of economic history, a discipline they helped pioneer. This year’s $825,000 award is seen as an important validation of that esoteric but increasingly relevant field.

In making its announcement, the Royal Swedish Academy of Sciences in Stockholm called the two economists “leading figures within the field of ‘new economic history.’ ”

“This recognizes that (economic history) . . . has finally made the grade,” said 1976 Nobel laureate Milton Friedman, a former colleague of Fogel’s.

Tuesday’s awards are also a further sign of the dominance of Americans in the field of economics. They have won 22 of 34 awards since 1969, including four won by professors at the University of Chicago since 1990.

Fogel had already been awake for an hour when he got the call from Stockholm at 5:30 a.m. “I was very moved and deeply appreciative that they valued my work so highly,” he said in an interview.

North was still asleep when the call came, but he said: “I woke up very quickly. It’s very exciting. It’s a big breakthrough . . . a coming of age for the field we’re in, an acknowledgment that it’s got something important to contribute.”

Both Fogel and North are considered pioneers in the field of cliometrics (after Clio, the Greek muse of history), the use of economic theory and quantitative methods to explain economic expansion in history.

Fogel’s methods “have had a substantial influence on the understanding of economic change,” the Swedish academy said in a statement.

North, whose studies have focused on the role of all institutions in the success or failure of a nation’s economy, “has more and more pointed out that economic, political and social factors must be taken into account,” the academy said.

In the course of asking tough questions, Fogel--a New York native who has been director of the Center for Population Economics at the University of Chicago since 1981--has found himself at the center of controversy.

His first important work disputed the long-held belief that railroads played a key role in the economic development of the nation. He argued that the country would have developed nearly as well by constructing a system of canals instead of railroads.

But the most public controversy erupted over a 1974 book written with Stanley L. Engerman, “Time on the Cross: The Economics of American Negro Slavery.” In it, Fogel found evidence to support the argument that slavery, far from being economically inefficient, was profitable.

The book drew criticism as a defense of slavery and for inadequately addressing moral issues. Other economists defended the study as a valid analysis of slavery’s economic role.

Now, Fogel acknowledged, “I would agree we didn’t deal adequately with the moral implications.”

It was a shortcoming he made up for in a subsequent 1989 volume, “Without Consent or Contract: The Rise and Fall of American Slavery,” which clearly laid out the moral objections to slavery.

“My main point, of course, was that markets don’t guarantee that evil systems will collapse, because sometimes they’re very effective, and only political intervention can bring an immoral system to an end,” he said Tuesday. “That was the lesson: Morality is a higher human goal than just efficiency.”

More recently, Fogel’s work has focused on U.S. health issues, and again Fogel has reached some unexpected conclusions. Among them: There were more elderly people with chronic illnesses in the early decades of the century--even though people in general had shorter life spans--than there are now, when more people are living beyond age 65.

North, a native of Massachusetts, has been a professor at Washington University in St. Louis since 1983. When he decided in the late 1960s to study European economies, he discovered the failings of existing research methods, he said.

“I became convinced that the methods did not make any sense when you looked at Europe . . . and we needed to develop a new body of theory,” he said. “It was the beginning of a long, long haul.”

In a series of books from 1971, North advanced his theories on “the new institutional economics,” the formation and role of institutions, such as the system of property rights, in the evolution of economies. North found that “new institutions arise when groups in society see a possibility of availing themselves of profits that are impossible to realize under prevailing institutional conditions,” the academy said.

More recently, North has focused on the question of why countries develop unequally: “to analyze and render intelligible . . . what makes them rich and poor,” he said. “It’s something standard economics doesn’t have anything to say about.”