The full title of the Prize is “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.
The keyword is Science and the title suggests that economics is a science. This is definitively not the case. Science is well-defined by the criteria of formal and material consistency: “Research is in fact a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant, 1994, p. 31)
Economics does not satisfy the criteria of formal and material consistency. Worse, economists violate scientific standards since Adam Smith. There is no exception: Walrasian, Keynesian, Marxian, or Austrian economics is provably false.
The sole criterion of science is true/false and scientists tackle only those problems that can be clearly and objectively decided. Science is fundamentally different from politics or religion or philosophy, which applies the criteria good/bad or like/dislike.
The argument "There are signs that students of economics are affected negatively in a moral sense where even corruption is a possibility" is therefore slightly beside the point.#1
Economics is a failed science and because of this, there can be no prize that strongly suggests that economics is in the same category as the genuine sciences. Economics is what the genuine scientist Feynman called a cargo cult science.#2 The economics “Nobel” is an insult to genuine scientists and this is sufficient reason to abolish it as soon as possible.
However, the Swedes have granted the economics “Nobel” for the wrong reasons, so it does not matter that they abolish it now for a slightly-beside-the-point reason.
Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield: Edward Elgar.
#1 Political economics and intellectual corruption
#2 One entirely sufficient reason for the shutdown of economics’ and ‘Economics is a scientific zombie waiting to be put down’ and ‘Profit and the collective failure of economists.
Related 'Confounding Is and Ought: the economist as moralist' and 'Knowledge vs. Belief' and 'There is no like/dislike button in science' and 'Time to get rid of political economics' and 'Moral incompetence or scientific incompetence?' and 'The real problem with the economics Nobel'.
The six main reasons for the abolition of the Economic “Sciences” Prize
(i) With regard to the explanation of how the monetary economy works economics has not produced anything in more than 200 years that satisfies the well-defined criteria of science.
(ii) With regard to methodology and the ethics of self-governance/self-control the traditional economic schools (Walrasian, Keynesian, Marxian, Austrian) regularly ignore or violate scientific standards.
(iii) Economists bear the intellectual responsibility for the social devastation that has been caused by mass unemployment since the Great Depression.
(iv) With regard to the underlying scientific performance the economics “Nobel Prize” is not comparable to the genuine Nobel Prize. With the so-called Law of Supply and Demand economics reaches not even the level of the Law of the Lever. De facto, the economics “Nobel Prize” is an imposture and an insult for genuine scientists.
(v) With regard to the general public, the Economics Prize fosters the superficial impression that economics is a science, which is definitively not the case.
(vi) The Economics Prize is by no stretch of the imagination in the spirit of science or of Alfred Nobel.