Why Don't Accountants Ever Win The Economics Nobel Prize?

Why don't Accountants ever win the Nobel Prize?

This question has vexed the accounting profession for many years.?Or maybe, it's just me?

...Economics?is?'the allocation of scarce resources that have alternative uses.'?

...Accounting?is?'measuring and communicating financial and non-financial information about economic entities'.

So both deal with the communication of economic information.

One macro, i.e. Economists, and the other micro, i.e. Accountants.

But Accountants are never invited on CNN or to Stockholm for awards ceremonies.

Therefore we need to understand why Accountants don't win the Nobel Prize for Economics.

I'm tempted to write an extended essay on this. But this piece is aimed at Accountants who dislike over-wordy theories; otherwise, they would have become economists!

Therefore I'll explain the reasons in 10 frameworks or less.

The?Nobel Memorial Prize in Economic Sciences?is an economics award administered by the Nobel Foundation.?

Commonly referred to as the?Nobel Prize in Economics, its winners are a who's who of economic titans.

Milton Friedman - Modern Monetary Policy.?

Harry M. Markowitz - Modern Portfolio Theory

Merton H. Miller - Capital Asset Pricing Model

William F. Sharpe - Sharpe Ratio

Robert C. Merton & Myron S. Scholes - Option Pricing & Derivatives

There are many more, including Daniel Kahneman and Richard Thaler, but this is enough to give you a flavour.

So here goes.

"Why Accountants don't win the Nobel Prize in 10 frameworks or less."

Framework 1:?Intelligence is the inverse of Insecurity

Both Accountants and Economists are intelligent. But accountants tend to understand better what they don't know.

Framework 2:?Confidence is not the same as competence.

Accountants index on competence and then get confident. Economists??

Framework 3:?For every PhD, there is an equal and opposite PhD.

My dad is harder than yours. I'm showing my age here. Is this still PC??

My specialist is better than yours. My Quant has a better model than yours!

Framework 4:?The Past / Future Certainty Bias

Accountants centre on the past with an eye to the future. Economists rarely look back at their past mistakes.

In the accounting ranks, FP&A are the finance cohort that focus on the less certain future, while Financial Accountants tend to index on the past.

Framework 5: Best practice is rarely practised by the best.

Best practice is an oxymoron.

If everybody follows the same principles, they can't all be the best!

Framework 6:?Humans vs Econs.

To an economist 100 million x 0.99% has the same expected value as 1 million x 99%. As such, they'd be indifferent between the two.

Of course, they're right!

But most accountants are humans and would therefore prefer the odds of 1 million at 99%!

Framework 7:??Confirmatory statistics are not confirmation of the truth.

Statistics rarely prove anything. And mention regression the mean to anyone outside of Financial Services, and they'll have you arrested!

Framework 8:?Complexity impresses your peers - Clarity impresses your CEO

Malthusian Economics & Monetarism anyone?

Ever met an Accountant happy to produce an elasticity curve?

Framework 9:?The Wayne Gretzky & Social Media Theory?

You miss 100% of the shots you don't take!

That's why economists are happy to punt opinions until one catches on.

The same applies to social media posts. |f crap, no one sees it, but if it's great, you'll become the Milton Friedman of Linkedin!

Framework 10:?Prediction is very difficult; especially if it’s about the future.

Economists are the 'Venture Capitalists' of academia.

An IMF research paper estimated that 148 of 153 predictions made by Economists were wrong. That's 96%.

So, only 4% of their predictions proved correct! That's just like venture, where 1 in 20 is a good hit rate.

Takeaway

There you have it, 10 reasons why Accountants never win the Nobel Prize.

ps. What about C. V. Raman?

Yes, there is at least one accountant who won a Nobel Prize. Working full time as an accountant in finance department at Calcutta, he conducted physics experiments on the scattering of light and for the discovery of the effect named after him. But left the accounting profession soon after!!!