Does the recent cut-back in the cash portion of the annual Nobel Prizes mean that the Nobel Foundation is running out of money?
By: Ringo Bones
It was announced back in June 14, 2012 that the Nobel Foundation will be undergoing a cash prize reduction of their cash prizes that goes with the Nobel Prizes by as much as 20% due to the “tough economy”. Does this mean that the Nobel foundation – which got its start from the initial investment stipulated in Alfred Nobel’s will, is now finally running out of money?
The decision for the foundation to opt for a 20% cash prize reduction seems odd given that the Nobel Foundation started handing out annual economics prizes since 1969. Can’t they “hire” these gifted Nobel Economics Prize laureates for an advice in restructuring their finances as to make the 20% reduction in the monetary prizes unnecessary?
From a historical perspective, the austere fiscal environment of our post 2008 global credit crunch world would seem like a mere “rainy day” compared to what the global turmoil Alfred Nobel’s initial investment went through. As in two world wars that killed millions, the Wall Street financial crash of October 1929 that resulted in the Great Depression. Not to mention a “Cold War” where two global superpowers nearly brought us mutually assured destruction.
It is worth noting that the Nobel foundation started when Alfred Nobel, in his will, provided that the major portion of his fortune be utilized in the following manner: the capital – about US$8,311,000 at the then prevailing rate of exchange – was to be invested by the executors in reliable securities, thereby forming a fund, the interest of which, was to be distributed annually “in the form of prizes to those who have, during the preceding year, conferred the greatest benefit on mankind.”
Since it started, the prize fund had grown by adding a stipulated part of the annual yield and by a given part of such prize money as is not awarded. Variations in the prize amounts were previously maintained due to taxation, from which the Nobel Foundation has now, however, been practically exempted; at present they depend on the market, as the prizes are based on the annual yield of the fund capital.
Since 1948, the prizes have increased from about US$32,000 to more than US$50,000 each. The prize amounts in the first five prize categories during the same year are always alike but can, as said before, be divided. There is no formal objection against the same individual receiving a Nobel Prize more than once either in the same field or in another one. If a person is awarded a prize and declines it, he or she is still considered a Nobel Prize winner.
The cash portion of the prize, then and now, has always has a bread-and-butter aspect that goes with the joy of winning a Nobel Prize. The money allows some recipients to carry their research forward: in the case of Marie and Pierre Curie, for example, who together won half of the money of the 1903 award for physics – the other half, by the way, went to Antoine Henri Becquerel. The stipend allowed Pierre Curie to give up his teaching job and concentrate on research. Could Pierre Curie be able to quit his teaching job if there was 20% reduction Nobel Physics Prize money?