Nobel Laurates 2024 - Insights on Prosperity

“Reducing the vast income disparities between countries is one of the greatest challenges of our time,” stated Jakob Svensson, Chair of the Economic Sciences Prize Committee, in a press release. “This year’s laureates have pioneered new approaches, both empirical and theoretical, that have significantly advanced our understanding of global inequalities,” Svensson explained during a press briefing.

The 2024 Nobel Prize in Economics, awarded to Daron Acemoglu, Simon Johnson, and James Robinson, highlights a fundamental truth: the quality of institutions, whether formal or informal, is central to driving economic and social prosperity.

This applies not just to nations, as demonstrated by the work in the book Why Nations Fail by Acemoglu and Robinson, but also to cities, territories, businesses, or smaller organizations.

At the core of prosperity lies the quality of relationships between individuals and organizations. In my work on the Economics of Mutuality, co-developed with Colin Mayer from Oxford University and Mars incorporated, we call this social capital. A form of capital often undervalued or ignored, particularly in Western cultures, which place disproportionate emphasis on the individual—the “I, I, me, me”—rather than on the quality of relationships with others.

Yet, across cultures and religions, humanity is often defined and shaped by the quality of its relationships with the other. Even in the foundational texts of Judaism and Christianity, when it says that human beings are created in the image of God, it refers not to man alone or woman alone but to the relationship between the two— a symbol of otherness—as the reflection of God. Only through our relationships with the other can we co-create and thus reflect the image of the Creator.

When these relationships scale up—whether in an organization, a city, or a country—they form institutions — either formal or informal.

The key question then becomes: What kind of relationships are we willing to build with the other? Relationships can be based on Domination (where size matters), Intimidation (where power matters), Manipulation (where asymmetric access to information matters), or Reciprocity/Mutuality, where values and purpose matter—not only holding values but practicing them, especially when the odds are so resolutely against you.

For over a decade, I have advocated for the notion of reciprocity/mutuality in the economy as the foundation of prosperity, whether in small social enterprises or on a national scale. This concept, though modest in its microeconomic application, aligns with the principles highlighted by the 2024 Nobel laureates.

But mutuality/reciprocity is not just a slogan. It requires specific values and their practice by individuals; without them, no functional institutions can be established or sustained.

As I’ve reflected on this over the past few years, particularly in the context of people and organizations I have encountered—some genuine, others merely appearing to practice mutuality but denying its true power—I have identified three essential values that must be held and lived out.

Rigor in managing what has been entrusted to us, i.e., engaging in a patient confrontation with reality, and through this exercise of rigor, envisioning an upliftment from above that serves as a bulwark against human inventions that oppose ethics.

Openness to nature, to oneself, to others, and to an ideal society, i.e., an openness that is distinct yet above the current and dominant process of humanization and civilization, which, because it is rooted in selfish personal development rather than the development of others, carries an inherent risk of collapse.

Compassion for the suffering of others, embodying the commandment to love one’s neighbor, even in the midst of tragedy, i.e., an expression of compassion that can then propel a form of humanism shaped by adversity, driven by an unceasing commitment to reform, yet tempered by a spirit of restraint, even in its most fervent expressions.

When these values—rigor, openness, and compassion—are convened, reciprocity/mutuality can then flourish, leading to the development of institutions conducive to an economy of mutuality that fosters prosperity and combats poverty.