I think that the first lesson that people should take from President Obama’s surprise Nobel Peace Prize is that the Nobel committee is highly idiosyncratic. Betting markets yesterday were giving great odds to an Afghani activist and a Colombian politician, among others, and as far as I know no one was talking about President Obama as even a nominee. Keep in mind that unlike most of the other prizes the Peace Prize is the most overtly political (with the Literature Prize probably next in line) and it is the overt intention of the Nobel committee to provide a powerful symbolic statement in affirmation of the winner’s agenda insofar as it relates to peace. Unlike the other Prizes, peace is a broad and vague enough notion that the selection committee probably uses more idiosyncratic parameters to evaluate and nominate people. Peace is not an academic discipline with a core group of intellectuals; it is a real-world outcome contingent on many things.
Unlike the other Prizes, the pool of potential Peace laureates is pretty damn large. Prizes in Medicine or Economics are functionally selecting from a much smaller group meaning idiosyncratic picks are a lot more predictable.
There is the question of how much the selection of a somewhat controversial peace prize winner will undermine the legitimacy of the Nobel. I suspect not very much; the Nobel awards hold something of a monopoly position in the global public’s eyes and the Nobel Peace Prize gets to free-ride on the legitimacy that the other Nobel Prizes garner.
Update: FiveThirtyEight’s Renard Sexton discusses.