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Nobel Jews

Sveriges Riksbank Prize in Economic Sciences · 1990

Harry M. Markowitz

He turned the old advice not to put all your eggs in one basket into math that now shapes how retirement savings are invested.

The Nobel citation: “for their pioneering work in the theory of financial economics”
Born
August 24, 1927, Chicago, IL, USA
Died
June 22, 2023, San Diego, CA, USA
Shared with
Merton H. Miller, William F. Sharpe
Affiliation at the time
City University of New York, USA

Economics prize

1990

Shared with 2 other laureates.

Age that year

63years

Born in 1927.

Headline credited impact

$23.2–30.4billion in economic value

Fees saved by US investors holding index funds instead of higher-cost actively managed funds. How it was built

Sources cited

26

Fact-checked September 24, 2026.

  • The core idea of portfolio theory came to him one afternoon in 1950, while he was reading a book on stock values in a University of Chicago library.
  • At his thesis defense, Milton Friedman argued that portfolio theory was not economics. Chicago awarded him the Ph.D. anyway.
  • He co-founded the software company CACI in 1962 to support SIMSCRIPT, a simulation language he helped create. His co-founder fired him in 1968.
  • He won operations research's John von Neumann Theory Prize in 1989 and the Nobel in economics a year later.
  • He taught at UC San Diego until 2019, when he was in his early 90s, and gave his Nobel medal to the university.

The breakthrough

Portfolio theory: judging risk for the whole portfolio, not stock by stock

Before Markowitz, investment advice centered on picking good individual stocks. Everyone knew the saying about not putting all your eggs in one basket, but nobody had turned it into a precise method. In 1950, while reading a theory that valued a stock by its expected future dividends, Markowitz spotted a problem: if investors cared only about expected profit, they would put all their money into the single most promising stock. Real investors spread their money out, because they also care about risk.

He proposed measuring risk with a statistic called variance, which captures how widely returns swing. His key insight was that a portfolio's risk depends not only on how risky each holding is, but on how the holdings move together. Think of a shop that sells both umbrellas and sunglasses. Each product has good and bad weeks, but because rainy and sunny weeks alternate, the shop's total sales stay steadier than either product's alone. Investments that do not rise and fall in step can steady a portfolio the same way.

Markowitz showed how to find the efficient portfolios, those offering the highest expected return for each level of risk, and in 1956 he published a method for computing them. The Nobel committee credited him with a rigorous, usable theory of investing under uncertainty that became a foundation of financial economics, including William Sharpe's model of how asset prices are set.[1],[2],[3],[4]

“at the time I defended my dissertation, portfolio theory was not part of Economics. But now it is.”
Harry M. Markowitz, Closing his Nobel lecture on 7 December 1990, conceding Milton Friedman's objection at his thesis defense decades earlier.[3]

What it meant for humanity

Portfolio theory changed investing from a hunt for winning stocks into a question of how holdings fit together. The Nobel committee said Markowitz's work made the study of investors' choices a respectable research field in economics, and that his model and William Sharpe's pricing model, which was built on it, became the framework of finance textbooks around the world. Methods built on his idea became everyday tools for professional money managers, and Sharpe said after his death that the finance taught in business schools carries some of Harry's ideas.

The widest effect reaches ordinary savers. Sharpe's model implies that an investor with no special information has no reason to hold anything but a broad slice of the whole market. That logic helped support index funds, which buy the whole market at low cost. The first index mutual fund opened in 1976. By the end of 2024, US index mutual funds and index ETFs held $16.2 trillion, just over half of all long-term fund assets, and charged far lower fees than actively managed funds. Markowitz also co-founded GuidedChoice, a retirement-planning firm that manages 401(k) accounts.

His work reached beyond finance. His method for solving huge systems of equations whose numbers are mostly zeros became standard in large linear-programming software, and SIMSCRIPT, the simulation language he helped create, was used to model factories, transport networks, computer systems and military war games. He and his wife Barbara gave more than $6 million to UC San Diego, mostly for fellowships for business students.

  • The Nobel committee said his portfolio theory established the analysis of investors' financial decisions as a respectable research area in economics, and a foundation for later work in financial economics.[4]
  • By the end of 2024, US index mutual funds and index ETFs, the low-cost funds that the theory he started helps justify, held $16.2 trillion, 51 percent of long-term fund assets.[4],[18]
  • His rule for handling huge systems of equations that are mostly zeros, worked out at RAND in the 1950s, became standard in large linear-programming software.[2],[9]
  • SIMSCRIPT, the simulation language he helped develop at RAND, has been used to simulate factories, transport networks and computer systems. Donald Knuth credits him with the 'buddy' method of managing computer memory.[9],[11]
  • He and his wife Barbara gave more than $6 million to UC San Diego, mainly for a fellowship supporting business students, and he taught there until 2019.[7]
  • Accepting the prize, he said the three laureates took it as recognition of financial economics as a branch of economics equal to any other, as much as a reward for three individuals.[5]

Impact in numbers

Markowitz's main legacy is a way of thinking: judge each investment by what it adds to the risk and return of the whole portfolio. That idea now runs through finance textbooks, pension planning and retirement accounts, but its benefits, such as steadier savings and fewer ruinous bets on a single stock, are spread across millions of people and cannot honestly be totaled. We record one low-confidence number, shared with Paul Samuelson's profile: fees saved by US investors in low-cost index funds since the first one opened in 1976. We credit Markowitz with only 4 percent, because the path from his theory to index funds runs through William Sharpe's pricing model, Samuelson's public challenge, Jack Bogle's first fund and many others. His contributions to computing, sparse-matrix methods and the SIMSCRIPT simulation language, mattered too, but no credible figure exists for their value, so we give none.

EconomyTechnology

Each number is the laureate’s credited share of a real-world outcome, cumulative to 2025. The whole outcome, the share of credit, and the reasoning are shown so you can check the arithmetic. Outcomes shared with other laureates are counted once on the impact page.

  • Low confidenceRippleModeledEconomy

    Fees saved by US investors holding index funds instead of higher-cost actively managed funds

    $23.2–30.4

    billion in economic value, credited share

    That is 4% of $580–760 billion in economic value since 1976.

    How this number was built

    US fees only, nominal dollars. ICI: index mutual funds plus index ETFs held $1.9T (2010), $4.2T (2015), $9.9T (2020), $16.2T (2024) and $19.1T (2025); interpolating gives $112-120T of asset-years for 2011-25. Fee gap from ICI asset-weighted expense ratios, assuming 70-85% of index assets are equity: in 2025 active equity funds 0.64% vs index 0.05% (mutual funds) or 0.14% (ETFs); active bond 0.44% vs 0.05%/0.09%: a blended gap of 0.48-0.51 points, wider earlier (active equity 0.96% in 2010). Low: 0.48 points in every year x $112T = $0.54T, plus 2006-10 (index mutual funds $0.62T in 2005, all index $1.9T in 2010) = $0.58T. High: year-specific gaps averaging ~0.57 x $120T = $0.68T, plus ~$0.08T for 1976-2010 = $0.76T. Trading-cost savings excluded. Share 0.04: Sharpe's CAPM, built on his theory, implies uninformed investors should hold the market; Sharpe, Samuelson and Bogle did more.[4],[18],[19],[23],[26]

    Sources: Investment Company Institute; Yahoo Finance; John C. Bogle (johncbogle.com); Royal Swedish Academy of Sciences / NobelPrize.org; Investment Company Institute

The double edge

No disaster is tied to Markowitz's work, but its limits are real and widely debated. Mean-variance analysis measures risk by variance, which counts big gains as just as risky as big losses, and it fits best when returns follow a bell curve. Since the 1960s, Benoit Mandelbrot, Eugene Fama and later Nassim Nicholas Taleb have argued that markets produce extreme swings far more often than a bell curve predicts, so critics say models built this way can understate the danger of crashes. The method also relies on estimates of future returns and correlations drawn from past data, which can fail when conditions change. Markowitz himself said in his Nobel lecture that mean-variance is a practical approximation that serves some investors poorly. Separately, CACI, the software company he co-founded, later grew into a large defense contractor. Decades after he left, a US jury held it liable over the abuse of three Iraqi prisoners at Abu Ghraib. No source links Markowitz to those events.

  • Moderate

    Bell-curve assumptions can understate crash risk

    Portfolio theory treats variance as risk and works best when returns follow a normal, bell-shaped distribution. Mandelbrot and Fama argued in the 1960s that real returns do not fit a bell curve, and Taleb later attacked the Nobel committee for rewarding models built on that assumption. Markowitz noted in his Nobel lecture that the mean-variance shortcut suits some investors poorly.[3],[20]

  • Minor

    Answers are only as good as the estimates fed in

    The method needs forecasts of returns, volatility and correlations, and in practice these usually come from past data. Critics point out that history is a poor guide when conditions change, and some studies find that simply dividing money evenly among the options can hold up well against it in certain cases.[20]

  • Minor

    The company he co-founded and Abu Ghraib

    CACI, founded by Markowitz and Herb Karr in 1962, became a large defense and intelligence contractor. In November 2024 a US jury awarded $42 million to three Iraqi men who sued CACI over the torture and abuse they suffered at Abu Ghraib. Markowitz had been fired from CACI in 1968, and no source ties him to those events.[6],[21]

Against the odds

Markowitz faced no documented persecution. He grew up comfortably in Chicago as the son of grocers and later wrote that he never noticed the Great Depression. The wider climate for American Jews in his childhood was harsher. In the 1930s the radio priest Charles Coughlin reached tens of millions of listeners while blaming the Depression on 'money changers' and 'modern Shylocks', antisemitic code for Jews. Elite universities limited Jewish students: Harvard used interviews and character ratings to push the Jewish share of its students down to about 15 percent by 1933. Jewish professors were rare, estimated at under 500 on all American campuses in 1935, and economics departments screened hires for 'Jewishness'. In 1927, the year Markowitz was born, a Harvard economist recommending a brilliant graduate to Chicago's economics chair warned that the man was Jewish and looked it; the candidate went to Minnesota instead. By the time Markowitz entered graduate school after the Second World War, those barriers were collapsing. His adviser at Chicago, Jacob Marschak, was a Jewish economist born in Kiev who left Germany as the Nazis rose and reached the United States in 1939. The one hurdle he described was intellectual: at his thesis defense, Milton Friedman argued that his subject was not economics at all.

  • —

    Quota

    He grew up when elite American universities restricted Jewish students and Jewish professors were rare. Harvard cut the Jewish share of its students to about 15 percent by 1933, and in 1935 fewer than 500 Jewish professors were estimated to teach on US campuses.[14],[15]

  • 1927

    Discrimination

    In the year he was born, a Harvard economist recommending a top graduate to the University of Chicago's economics chair warned that the candidate was Jewish; the man went to Minnesota. Historian E. Roy Weintraub cites the letter to show that Chicago was not immune to such screening.[14]

  • 1939

    Other

    His thesis adviser at Chicago, Jacob Marschak, was a Jewish economist born in Kiev who left Germany as the Nazis rose; Joseph Schumpeter listed him in 1933 among displaced scholars. He reached the US in 1939 and later led the Cowles Commission.[2],[14],[17]

  • —

    Other

    During his childhood, Father Charles Coughlin's radio broadcasts, heard by some 30 million people, used antisemitic code words such as 'money changers' to blame the Great Depression on Jews and spread the false idea that Jews controlled finance.[16]

Jewish background

Both parents JewishRelationship to Jewish identity not documented

Markowitz was born in Chicago in 1927, the only child of Morris and Mildred Markowitz, who ran a small grocery store. The evidence that the family was Jewish comes from reference works rather than from Markowitz himself: Wikipedia's list of Jewish Nobel laureates includes him, citing the Encyclopedia of American Jewish History (2008), and the Jewish Virtual Library and the Israel Science and Technology Directory also list him. No source consulted disputes this. His Nobel autobiography, lecture and oral history never mention religion or Jewish identity, so his personal relationship to it is unknown.[2],[11],[12],[13],[25]

Key dates

  1. August 24, 1927

    Born in Chicago, the only child of Morris and Mildred Markowitz, owners of a small grocery store.[1],[2]

  2. 1947

    Earns a bachelor's degree in liberal arts from the University of Chicago, then chooses economics for graduate study.[2],[7]

  3. 1950

    Earns his M.A. After a broker suggests the stock market as a thesis topic, the core idea of portfolio theory comes to him while reading John Burr Williams.[1],[2],[6]

  4. March 1952

    Publishes 'Portfolio Selection' in The Journal of Finance and joins the RAND Corporation, where he later develops sparse-matrix methods.[2],[4],[6],[11]

  5. 1954

    Receives his Ph.D. from the University of Chicago, despite Milton Friedman's objection that portfolio theory was not economics.[1],[3]

  6. 1956

    Publishes the critical line algorithm for computing efficient portfolios. On leave from RAND in 1955-56, at James Tobin's invitation, he writes most of his 1959 book at Yale's Cowles Foundation.[2],[3]

  7. 1959

    Publishes the book Portfolio Selection: Efficient Diversification of Investments.[2],[4]

  8. July 17, 1962

    Co-founds California Analysis Center, Inc. (CACI) with Herb Karr to support SIMSCRIPT, the simulation language they helped create at RAND.[2],[11],[21]

  9. March 15, 1968

    Is fired from CACI by his co-founder after disputes over pricing and marketing; later that year he begins an academic career at UCLA.[6],[9],[10]

  10. 1982

    Serves as president of the American Finance Association and begins teaching at Baruch College, City University of New York.[12],[22],[24]

  11. 1989

    Receives the John von Neumann Theory Prize for portfolio theory, sparse matrix methods and SIMSCRIPT.[2]

  12. October 16, 1990

    Shares the economics Nobel with Merton Miller and William Sharpe for pioneering work in financial economics; his part is the theory of portfolio choice.[1],[4]

  13. 2018

    Donates his Nobel medal to UC San Diego, where he taught at the Rady School of Management from 2007 to 2019.[7],[8]

  14. June 22, 2023

    Dies in San Diego at age 95, of pneumonia and sepsis.[1],[8]

Sources

  1. 1.Harry M. Markowitz - Facts · NobelPrize.org (Nobel Prize Outreach)
  2. 2.Harry M. Markowitz - Biographical · NobelPrize.org (from Les Prix Nobel 1990), 1990
  3. 3.Foundations of Portfolio Theory (Nobel Lecture, 7 December 1990) · NobelPrize.org, 1990
  4. 4.The Prize in Economics 1990 - Press release (16 October 1990) · Royal Swedish Academy of Sciences / NobelPrize.org, 1990
  5. 5.Harry M. Markowitz - Banquet speech (10 December 1990) · NobelPrize.org, 1990
  6. 6.Oral history interview with Harry M. Markowitz (OH 333), conducted by Jeffrey R. Yost, 18 March 2002 · Charles Babbage Institute, University of Minnesota, 2002
  7. 7.In Memoriam: Nobel Laureate Harry Markowitz Passes at 95 · UC San Diego Today, 2023
  8. 8.Harry Markowitz, Nobel laureate, UC San Diego professor who revolutionized investing, dies at 95 · San Diego Union-Tribune, 2023
  9. 9.Markowitz, Harry (Biographical Profile) · INFORMS (Institute for Operations Research and the Management Sciences)
  10. 10.Harry Markowitz: An Appreciation, Part I (John Guerard) · Wilmott, 2023
  11. 11.Harry Markowitz · Wikipedia
  12. 12.Harry Markowitz (1927-2023) · Jewish Virtual Library
  13. 13.Jewish Nobel Prize Laureates in Economics · Israel Science and Technology Directory (science.co.il)
  14. 14.MIT's Openness to Jewish Economists (E. Roy Weintraub), CHOPE Working Paper 2013-05 · Center for the History of Political Economy, Duke University, 2013
  15. 15.Getting In: the social logic of Ivy League admissions (Malcolm Gladwell, on Jerome Karabel's The Chosen) · The New Yorker, 2005
  16. 16.Charles E. Coughlin · United States Holocaust Memorial Museum, Holocaust Encyclopedia
  17. 17.Jacob Marschak · Wikipedia
  18. 18.2025 Investment Company Fact Book (Figures 2.5, 6.4, 6.5) · Investment Company Institute, 2025
  19. 19.Jack Bogle will soon have saved investors over $1 trillion (Ethan Wolff-Mann) · Yahoo Finance, 2019
  20. 20.Modern portfolio theory (section: Criticisms) · Wikipedia
  21. 21.CACI (sections: History; Controversies - Abu Ghraib) · Wikipedia
  22. 22.In Memoriam: Harry Markowitz, Past-President of the American Finance Association (1927-2023) · American Finance Association, 2023
  23. 23.The Professor, the Student, and the Index Fund (John C. Bogle) · John C. Bogle (johncbogle.com), 2011
  24. 24.Harry Markowitz, The Concise Encyclopedia of Economics · Econlib (Liberty Fund)
  25. 25.List of Jewish Nobel laureates (Economics section) · Wikipedia
  26. 26.2026 Investment Company Fact Book (Figures 2.5, 6.4, 6.5) · Investment Company Institute, 2026

Fact-checked on September 24, 2026 by a separate AI fact-checking pass that re-opened the sources, with 9 corrections made. How we check

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