Apple #550: Alfred Nobel and His Prizes

All this week, they've been announcing the Nobel prize-winners. Canadian physician Ralph Steinman was announced to have won, along with two others, the prize in medicine for his development of a new treatment for cancer. Unfortunately, the prize committee learned, he had died of pancreatic cancer three days previously.

If that weren't ironic enough, the Nobel Prize has a rule that no prize may be awarded posthumously. He and his children had even had a conversation about this:

"We were like 'OK Dad, I know things aren't going well, but the Nobel, they are going to announce it next Monday'. And he's like: 'I know, I have got to hold out for that. They don't give it to you if you have passed away. I got to hold out for that.'"

--Alexis Steinman, Ralph's daughter

But he wasn't able to hold out that long.


Ralph Steinman, 2011 Nobel Prize-winner in Physiology or Medicine
(Photo from Curious Cat)


However, the committee has another rule which says that if the recipient dies in between the time that the committee decides on a recipient and when the award is given, then that person is still the award-winner. So Steinman will still appear on a list of award-winners, and his children will be given the big-money prize.

This whole no-posthumous-awards struck me as unusual. Then the contingency plan seemed even more odd and specific. I wondered if there were other odd rules associated with the Nobel Prize. I also wanted to know about the money. I have the impression that they give out a pretty big sum of money. That must come from some pretty big pool of money. Who provides the funds for that?

So I started reading. Turns out, a lot of things about the Nobel Prize are pretty odd. The whole thing came about because some guy -- Alfred Nobel -- willed it into being. Literally, he put it into his will. Everybody has to abide by what his will says. So the oddities about the Prize owe first of all to the fact that this was the brainchild of one person whose interests and particularities were as unique and individual as any one of us.

You can see how various features of the Prize reflect who he was and what he did.


Young Alfred Nobel
(Photo from Nobelprize.org)


The Nobel Prize is awarded for excellence in Physics, Chemistry, Physiology or Medicine, Literature, and Peace. Why those three science disciplines, plus literature and peace?

• Alfred Nobel was educated by private tutors in the natural sciences as well as literature and languages.

• During what were essentially his college years, he went abroad to study chemical engineering. His knowledge of chemistry turned out to be crucial to his experiments with nitroglycerine and his invention of dynamite.

• His early jobs involved building military equipment for the Russian army and designing steam engines -- both of which require a solid knowledge of physics.

Alfred Nobel in his laboratory
(This painting is all over the place. Here, sourced from the Daily News)

• As for the medicine piece, he was always sort of sickly, even when he was young. He suffered from indigestion, headaches, and bouts of depression. He sought relief at many European spas, but to little avail.

"Sickly, probably hypochondriac, he had his whole life been visiting spas and specialists to cure sore muscles, sudden fainting, nose bleeds, rheumatism, migraine, insomnia, cold sores, bad stomach, and heart problems. He disappears for days, weeks and returns with sunglasses and bandaged head."

--Karlsson on Nobel, from Svenska Uppfinnare

• His experiments with nitroglycerine may have been a contributing factor to his headaches. But later in life when he developed heart trouble, it had been discovered that nitroglycerine could be helpful in treating angina pectoris. So he wound up taking nitroglycerine for his health.

• He also maintained an interest in other chemicals that might be useful for anesthesia and conducted various tests in his laboratory to that purpose.

• He might have been appreciative of the doctors who provided some easing of his symptoms, and hoped for medicine to be able to do more for others in the future.

• As for the literature piece, he wrote poetry and plays for several years. Early in his career as a chemical engineer, he toyed with the idea of ditching engineering in favor of writing poetry for a living. He was fluent in Swedish, Russian, French, English and German by the age of 17, and throughout his life he read extensively. Friends commented on his "well-stocked library, capable of satisfying the most divergent wishes." At his death, his library housed over 1500 volumes.
  

Wait. The guy who made the Peace Prize invented dynamite?

• Yes, Nobel invented dynamite. He also invented the blasting cap, which made it possible to light dynamite with a fuse. He founded a number of companies which manufactured and sold dynamite all across Europe. It is probably the extensive sale of dynamite which formed the monetary foundation of the Prize's existence.

• Bit of a contradiction there, eh? But wait, there's more.

• In the course of his experiments with nitroglycerine and dynamite, an explosion killed his brother. So he knew how deadly dynamite could be. Yet he kept working with it and, once he'd invented dynamite, manufactured and sold it widely.

An explosion courtesy of dynamite. Here, it's used for construction purposes. Dynamite was and still is used to blow open the sides of mountains to make a way for roads to tunnel through.
(Photo from History of Science 2009)

• Albert Einstein is famously quoted as saying that Nobel must have established the Peace Prize as a way to atone for the damage he made possible when he invented dynamite. But in fact, Nobel's letters and journals suggest otherwise.

• Nobel thought that dynamite was so powerful and explosive, it surely must lead to the eradication of war. As he put it in 1891,
  

"Perhaps my factories will put an end to war sooner than your congresses: on the day that two army corps can mutually annihilate each other in a second, all civilised nations will surely recoil with horror and disband their troops."

• This was a couple of decades before World War I, so he didn't see that no troops disbanded despite horrors greater than he ever imagined. This was also the same argument behind nuclear weapons. We've seen how well that argument works.
  

• But back in his day, Nobel regarded dynamite as a deterrent to war. Though he made a boatload of money from the stuff, he apparently wished that war would not happen. As he wrote in a letter, "Good wishes alone will not ensure peace."

• That letter was written to a friend of his, Bertha von Sutter, who was an Austrian countess and a devoted peace activist. She wrote an anti-war novel called Lay Down Your Arms which was widely read and regarded. She and Nobel conducted a lengthy correspondence, and it is thought that her ideas influenced Nobel.

• After having met her, he became a member of the Austrian Peace Association and donated funds to it. So he did take some action during his lifetime in support of pacifism.
  

• All that said, the exact rationale behind his establishment of the Peace Prize is not really known.

Bertha von Sutter, peace activist and friend of Alfred Nobel. She was awarded the Nobel Peace Prize in 1905.
(Photo from Skandinav i Florida)


If the Prizes were established by one guy, how come they're awarded by different groups of people from different countries?

• The short answer is because that's what he said he wanted in his will.

• His will, which is surprisingly short given all that it put in motion, said the prizes would be determined as follows:

1. Physics and Chemistry each to be awarded by the Swedish Academy of Sciences
2. Physiology or Medicine to be awarded by the Karolinska Institutet in Stokholm, Sweden
3. Literature to be awarded by the Swedish Academy
   
4. Peace to be awarded by a committee of five people elected by the Norwegian Storting (a.k.a. Parliament)

• What's interesting about this, first of all, is that Nobel spent the majority of his life in France and Italy. Paris was the city he loved best. He grew up in Russia. But he was born in Sweden, and after the family fell on hard times in Russia, they returned to Sweden. It was Sweden that Alfred chose as the seat from which his Prizes should be determined.

But if he's from Sweden, how come the Norwegian Parliament handles the Peace Prize?

• That's because when Nobel wrote his will in 1895, the two countries were ruled as one, by a single monarch. In 1905, Norway became a separate kingdom.

The Norwegian Storting in 1905 when it voted to separate itself from Sweden.
(Photo from Wikipedia)

• Still, Nobel could have chosen to give the task to some Swedish governing body.
  

• There is a lot of speculation about why he chosen the Norwegian Parliament, the chief possibility being that the Storting was the first legislative body to vote in favor of the international peace movement.

• But that's only speculation. Again, no one knows for sure why he put Norway in charge of this piece of the prize.
  

Exactly how much money does a Nobel winner receive?

• His will doesn't stipulate a specific amount. It did say that whatever was left over after various family members and servants received relatively modest amounts should go to the prize.

• That worked out to over 31 million Swedish kronor (SEK). In today's dollars, that's $249 million.

What Swedish kronor, or crowns, look like
(Image from Visit Sweden)

• But the money Nobel left to the Prizes was also supposed to be invested in order to continue funding the prize. So the amount available would change from one year to the next. How much should the Prize winners be awarded going forward?

• That amount was settled on by the Nobel Foundation, which was formed in order to figure out the particulars of how the will should be executed. It's sort of like after Congress makes a law, a whole lot of regulations get written after the fact to govern the details. The statutes that were written by the Foundation are what deal with the particulars of the money and pretty much everything else.

• As to the amount of money awarded, the statutes say, "the amount of a prize thus awarded shall under no circumstances be less than sixty percent of that portion of the annual yield of the fund that shall be available for the prize award."

• You can see the complete table of award amounts given each year and what that translates to in 2010 SEK. But I'll give you some of the highlights.
  

• In 1901, the first year when Prizes were awarded, the amount awarded to each laureate was SEK 150,782. That's roughly $1.2 million in 2010 dollars.

• The lowest amount awarded was in 1923: SEK 114,935.

• In 1963 they apparently decided to give out round numbers. That year, each prize winner received SEK 265,000 (2010 $394,022. Apparently 1963 SEK were worth much less than 1901 SEK).

• In 2001, the prize amount was increased to SEK 10 million. That was the year that SEK were at their most valuable; the prize money awarded converts to 2010 $1.7 million.

• The award currently remains SEK 10 million.
  

• Which means they need to have 6 x SEK 10 million (why 6 instead of 5, I'll get to in a moment) available to award. And if I understand the will and its statutes correctly, the SEK 60 million would be just the interest. And only 60% of it, at that.

• That's a big pot of money they're drawing from. Which leads me to my next point:

Isn't there another prize for Economics?

• Yes, there is. This one was established long after Alfred Nobel's will, in 1968.

• It was set up by the Sveriges Riksbank, Sweden's national bank. The bank made a donation to the Nobel Foundation in celebration of the bank's 300th anniversary. That donation formed the basis of the first Nobel Prize in Economic Sciences.

• The Nobel people don't say this, but I suspect that the Swedish national bank made gobs of money from handling that Foundation pool of cash. Their donation to establish the prize probably constituted a pretty minor amount compared to what the bank earned over the decades. I bet it was really a way of saying thank you for letting us handle all that money for so many years.

• I don't know much about investing, but anybody who manages to hang onto $249 million for over 100 years, through two World Wars and a Great Depression and a global recession, and to make that amount increase substantially, I'd say they're doing a pretty good job.

This is what it looks like when they award you the Nobel Prize.
(Photo from eiffel.ps.uci.edu)


Don't the laureates get something else besides money?

• Yes, they also each receive a diploma and a medal.

• The diplomas are designed differently each year, and for each laureate. In recent years, they have had an artistically designed cover with the text of the diploma in hand-made calligraphy. I'd show you an example here but I can't because they're all copyrighted by the Nobel Foundation. But this diploma awarded to Gerardus 't Hooft for Physics in 1999 is a pretty cool-looking one.

• The medals, on the other hand, have had the same design since 1902. The front of the medals all look the same.

The front of the medal bears Alfred Nobel in profile with his birth and death dates, NAT-MDCCC XXXIII OB-MDCCC XCVI, which means born 1833, died 1896.
(Photo from Nobelprize.org)

• The medals awarded in Sweden have this inscription on the back: Inventas vitam juvat excoluisse per artes ("Let us improve life through science and art" --Virgil, The Aeneid).

• The back of the Peace medal reads: Pro pace et fraternitate gentium ("For the peace and fraternity of all nations"). The Economics medal has no quotation on the back.

Here are some other facts about Nobel's life that I think are must have been significant or that reveal more of that strange contradiction between dynamite manufacturer and peace activist.

• The year Alfred was born, 1833, his father went bankrupt.

• When Alfred was 20, two important things happened. Alfred had already founded his first company. But the Crimean War erupted, the Russian military canceled a bunch of orders, and Alfred's company went bankrupt.

• That same year, Alfred's father Immanuel was presented at the Russian court where he was awarded Tsar Nikolai's Imperial Gold Medal "for diligence and creative skill in Russian industry."

• The Crimean War hit Alfred's father hard, too. Six years after receiving his prestigious award, Immanuel went bankrupt -- for the second time.

• In 1864 when Alfred was 31, his brother Emil and several other people were killed while trying to develop nitroglycerine into a workable explosive. The city of Stockholm where the explosion occurred forbade further nitroglycerine production within the city limits. Nobel moved his lab to a barge on a lake and continued working.

• A plant of Alfred Nobel's at Krümmel in Germany blew up, twice. Both times it was rebuilt larger than before. The ground around the plant was rich in diatomaceous earth, which turned out to be a key component in stabilizing nitroglycerine in the more controllable form of dynamite.

Alfred Nobel. A riddle wrapped in an enigma
(Photo from the History of Economic Thought)

You say I am a riddle – it may be
For all of us are riddles unexplained.
Begun in pain, in deeper torture ended,
This breathing clay what business has it here?
Some petty wants to chain us to the Earth,
Some lofty thoughts to lift us to the spheres,
And cheat us with that semblance of a soul
To dream of Immortality
--Alfred Nobel, age 18

One last thing: the Prizes are awarded on December 10, which is the anniversary of Alfred's death.


Sources
All my sources are from the Official site of the Nobel Prize
It's a huge site, with lots of information buried within links within links. Here are some of the pages I found most useful.
Timeline of Alfred Nobel's life
Alfred Nobel - His Life and Work
Alfred Nobel on War and Peace
Alfred Nobel and His Interest in Literature
Alfred Nobel - St. Petersburg
Short Facts about the Prizes
Nobel Prize Facts
Table of Nobel Prize Amounts
Full text of Alfred Nobel's Will
Statutes governing the Prizes
About the Nobel Foundation
Then there's also this: "Cancer kills Nobel physician before he hears of Prize," Reuters, October 3, 2011