How a radical idea about innovation won the 2025 Nobel Prize in Economics.
On October 13, 2025, three economists received the most important call of their careers. They had just been awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel.
Joel Mokyr, Philippe Aghion, and Peter Howitt were recognized for answering one of humanity's biggest questions: What is the true source of long-term economic growth?
Their answer was simple yet profound: innovation. But not just new inventions. They proved that growth is driven by a restless, disruptive process known as 'creative destruction'.
Half the prize went to Joel Mokyr. By studying history, he showed that for inventions to spark growth, society needs to understand not just that they work, but why.
Philippe Aghion and Peter Howitt shared the other half. They built the mathematical framework for 'creative destruction,' showing growth is a turbulent process where new technologies relentlessly replace old ones.
Think of how digital cameras made film obsolete, or how streaming services replaced video rental stores. The new industry creates massive value, but only by destroying the old one. This churn is the engine of progress.
This isn't just theory. It explains the smartphone in your pocket, advances in medicine, and the very fabric of our modern world. It proves that to keep growing, societies must embrace competition and change.
But there's a fascinating twist. This prize is not one of the original awards established in Alfred Nobel's 1895 will. It was created by Sweden's central bank in 1968 to mark its 300th anniversary.
The distinction is so debated that Alfred Nobel's own great-grandnephew called the prize a 'PR coup by economists,' arguing Nobel cared more for society than profits.
The selection process is shrouded in secrecy. Nomination is by invitation only, with thousands of experts consulted. All deliberations remain sealed for 50 years to ensure impartiality.
An analysis of past winners reveals striking patterns. Laureates are overwhelmingly male and concentrated in a small number of elite North American universities.
Since the prize began in 1969, only three women have been awarded: Elinor Ostrom (2009), Esther Duflo (2019), and Claudia Goldin (2023), who was the first woman to win it solo.
The committee chair said it best: 'The laureates' work shows that economic growth cannot be taken for granted.' We must support the mechanisms that allow new ideas to challenge the old.
The 2025 prize is a powerful reminder that prosperity is born from disruption. It leaves us with a critical question: what are we willing to let go of to build a better future?
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