Helpful reminders

Nobel Peace Prize winner should chasten economists

Fortunately, mainstream economists needn't think much about the work of the Organisation for the Prohibition of Chemical Weapons. The use of such dreadful tools of destruction is sufficiently rare that they hardly affect GDP. Even so, the organisation awarded the Nobel Peace Prize on Friday can provide relevant lessons to those devoted to the science of production and consumption.

First, the watchdog's existence signifies both the power and limits of globalisation. Modern international supply chains weren't necessary for chemical weapons technology to spread across borders, a phenomenon that started almost a century ago. Less gloomily, a global consciousness about the unique horror of this particular form of warfare led to the almost universal ratification of the Chemical Weapons Convention, which the organisation enforces.

It has not succeeded, however. Just as dominant or determined countries dodge global trade rules, the United States and Russia, for example, haven't lived up to commitments under the convention to destroy all their chemical weapons. Globalisation is not a tide that sweeps all before it.

Second, the Nobel-winning intergovernmental body teaches the importance of the state. It would be strange to outsource the destruction of chemical weapons to a private sector organisation, exactly because governments naturally take charge of extraordinarily sensitive or controversial issues. While the economy is much less important than weapons of mass destruction, it is too vital to be left entirely to markets.

Finally, there would be no need for a chemical weapons monitor if people behaved in the way economists typically assume - as rational utility-maximisers. If human nature embodied nothing more than a desire for more pleasure and less pain, there would be no wars and nothing like the deployment of sarin. In fact, people are complicated, and the professional tendency to oversimplify economic life leads to bad analysis and foolish policies.

Economic desires can nevertheless promote peace. To wit: Alfred Nobel established his prizes in 1895 largely with funds derived from selling dynamite, a nitroglycerin-based material that was among the most destructive chemicals of its time. And yet this year's recipient and the award's origins are important reminders that prosperity and peace don't always go hand in hand.