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Putting a Price on Simon Kuznets’s Nobel in Economics

on Donnerstag, 26 Februar 2015. Posted in General Autograph News


James D. Watson’s sold for $4.76 million while the one owned by William Randal Cremer, a member of Parliament and labor activist, fetched just $17,000.
Now another Nobel medal — this one awarded to the economist Simon Kuznets in 1971 — is on the auction block. The unusual sale presents an intriguing, if not quite Nobel-worthy, economic puzzle: How do you set the price of an item with barely any market history?

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Simon Kuznets, right, receiving his Nobel medal in 1971. Bidding for the award, set to close on Thursday, opened at $150,000. CreditReportagebild/Associated Press

After all, only a handful of the 889 medals awarded since 1901 have ever been sold. And none of them were for economic sciences, a stepchild, since the category was belatedly endowed by the Bank of Sweden in 1968 in honor of its 300th anniversary. The original five prizes established in Alfred Nobel’s will included the peace prize, which Cremer won in 1903, and medicine, which Dr. Watson took home in 1962 for his co-discovery with Francis Crick and Maurice Wilkins of the structure of DNA.

Pricing is “both an art and science,” said Laura Yntema, auction manager at Nate D. Sanders Auctions in California, which is handling the online bidding, scheduled to end on Thursday at 8 p.m. Eastern time. In other words, you consult the sale history and then you consult your gut.

For the medal awarded to Kuznets, who died in 1985, the opening bid is $150,000.

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Simon Kuznets’s Nobel medal is on the auction block. Nate D. Sanders Auctions

The seller, Kuznets’s 83-year-old son, Paul, is himself an economist, but in this case, he sidestepped any fancy modeling. He said the auction house “suggested a price range, and I settled halfway between the bottom and the top.”

The 23-karat medallion is worth about $8,700 in gold alone. But the value of a Nobel, or any prize for that matter, has as much to do with its mystique — who won it and why — as it does with its raw materials or rarity.

David O. Selznick’s Oscar statuette for “Gone With the Wind” sold for $1.542 million. Compare that to the Best Song Golden Globe for “I Feel Love” by Euel Box from the 1974 film “Benji,” which sold for $23,116. The 1953 Footballer of the Year trophy awarded to Nat Lofthouse went for $30,819 while the Presidential Medal of Freedom that Lyndon B. Johnson gave in 1968 to his defense secretary, Robert McNamara, sold for $47,652.

So the question is whether bidders consider Kuznets more of a “Gone With the Wind” or a “Benji.”

Though far from a household name, Simon Kuznets helped lay the foundation of the modern field of economics by creating standard measures of national income and economic growth. Kuznets wanted to figure out a way to describe what was happening both in industrial and developing nations, and he grounded his investigation in the historical record.

“I started out with the general notion that economics is the basis of all social problems,” he said when he was awarded the Nobel in 1971.

Born in Ukraine in 1901, Simon Kuznets briefly worked in the labor statistics office there before coming to the United States, where he attended Columbia University. His work during the 1930s helped John Maynard Keynes’s ideas of stimulating the economy to pull the country out of the Depression gain acceptance.

During World War II, Kuznets served as the chief statistician at the War Production Board. His calculations helped decide whether the American government was going to focus on building tanks or planes.

Although all of the economic statistics churned out by the Commerce Department can trace their lineage back to Kuznets, the department did refuse to accept one of his key recommendations, that the value of unpaid housework be included in the nation’s productive output.

Paul Kuznets said he began to think more seriously about a sale after a call from the Nate Sanders auction house. “It’s been sitting in a safety deposit box for what, 40-something years, and it’s not doing anyone much good,” said Mr. Kuznets. “I’ve got among other things, photos of the ceremony. I’ve even got tape recordings and that sort of thing, and I have memories of many years with my parents. I think those are more important to me than what is essentially a piece of jewelry.”It was the posthumous sale in 2013 of Crick’s piece of jewelry for $2.27 million that prompted the recent spate of Nobel medal auctions.

“I knew I would soon auction off my 1962 Gold Nobel Medal the moment I learned that Francis Crick’s Gold Medal, May 2013, had been sold for more than two million dollars,” Dr. Watson wrote in Christie’s auction house description. After being widely reviled for comments he made about the inferior intelligence of blacks, Dr. Watson said he would donate some of the proceeds to charity as a way of rehabilitating his reputation.

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James D. Watson took home a Nobel Prize for his co-discovery of the structure of DNA. His sold for $4.76 million. Credit Fred R. Conrad/The New York Times

The Russian billionaire Alisher Usmanov bought the prize for $4.76 million (which included the auction house’s cut) in December, and returned it to Dr. Watson. Francis Wahlgren, international director of books and manuscripts at Christie’s, commented that the price was not necessarily about the Nobel itself, but rather reflected “the growing strength in the market for the iconic pieces related to the early understanding and development of the implications of DNA and its growing relevance today.”

Two other Nobel medals were sold in 2014. The 1936 peace prize awarded to Carlos Saavedra Lamas, the Argentine finance minister who persuaded his country to join the League of Nations, sold for $1.16 million. The Nobel Prize in Physics, awarded to James Chadwick for his discovery of the neutron, went for $329,000 last year. Cremer’s peace prize sold for $17,000 in 1985.

In 2012, William Faulkner’s estate hoped to sell his 1949 Nobel Prize in Literature for at least a half-million dollars. But the sale was called off when the bids topped out at $425,000.

“Putting up Nobels is a fairly recent thing, and I’m not sure how long it’s going to last,” said Richard Austin, head of books and manuscripts at Sotheby’s. “Everyone knows what Watson and Crick were famous for. Once you get to more specialized Nobels, it’s more difficult.”

For the Kuznets sale, the Nate Sanders auction house is hoping to attract universities that have a connection to the economist, collectors and perhaps a Wall Street mogul or two.

Ms. Yntema of the auction house said the opening bid ideally should be set a little below what you think the item will actually sell for, but in the end, as any economist can tell you, the fair market value is what someone is actually willing to pay.

Correction: February 26, 2015 
An article on Wednesday about the auction of Nobel medals and other awards referred incorrectly to an Oscar that David O. Selznick received for “Gone With the Wind,” which was named best picture. Mr. Selznick won in his capacity as a producer, not as the director. (The film’s director, Victor Fleming, was also honored with an Oscar.)

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