George Stigler
Encyclopedia
George Joseph Stigler (January 17, 1911 – December 1, 1991) was a U.S. economist
. He won the Nobel Memorial Prize in Economic Sciences
in 1982, and was a key leader of the Chicago School of Economics, along with his close friend Milton Friedman
.
While at Chicago, he was greatly influenced by Frank Knight
, his dissertation supervisor. Friedman, a friend for over sixty years, comments upon it as remarkable since only three or four students ever managed to complete their PhD dissertation under Knight in his 28 years at Chicago. Jacob Viner
and Henry Simons also influenced him and, among his students, W. Allen Wallis and Milton Friedman.
Stigler is best known for developing the Economic Theory of Regulation, also known as capture
, which says that interest groups and other political participants will use the regulatory and coercive powers of government to shape laws and regulations in a way that is beneficial to them. This theory is a component of the public choice field of economics. He also carried out extensive research in the history of economic thought
.
Stigler's most important contribution to economics was disseminated in his landmark article titled "The Economics of Information". According to Friedman, Stigler "essentially created a new area of study for economists." In this article, Stigler stressed the importance of information by writing, "One should hardly have to tell academicians that information is a valuable resource: knowledge is power. And yet it occupies a slum dwelling in the town of economics."
His 1962 article "Information in the Labor Market" developed the theory of search unemployment
.
He was known for his sharp sense of humor, and wrote a number of spoof essays. In his book The Intellectual and the Marketplace, for instance, he proposed Stigler's Law of Demand and Supply Elasticities, that "all demand curves are inelastic
and all supply curves are inelastic too." The essay referenced studies that found many goods and services to be inelastic over the long run, as well as offering a supposed theoretical proof; he ended by announcing that his next essay would demonstrate that the price system does not exist. Another essay, on "Truth in Teaching," described the consequences of a (fictional) set of court decisions that held universities legally responsible for the consequences of teaching errors.
The Stigler diet
was named after him.
Stigler was born in Seattle, Washington, graduated from the University of Washington
in 1931 with a B.A and then spent a year at Northwestern University
from which he obtained his M.B.A in 1932. It was during his studies at Northwestern that Stigler developed an interest in economics and decided on an academic career.
Due to a tuition scholarship that he received from the University of Chicago
, Stigler enrolled at the university in 1933 to study economics and went on to earn his Ph.D.
in economics from the University of Chicago
in 1938. His teaching experience began in 1936 at Iowa State College where he taught until 1938. He spent much of World War II
at Columbia University
, performing mathematical and statistical research for the Manhattan Project
. He then spent one year at Brown University
. He served on the Columbia faculty from 1947 to 1958.
Stigler was a founding member of the Mont Pelerin Society
, and was president from 1976 to 1978.
He also received National Medal of Science
in 1987.
Economist
An economist is a professional in the social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy...
. He won the Nobel Memorial Prize in Economic Sciences
Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, commonly referred to as the Nobel Prize in Economics, but officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel , is an award for outstanding contributions to the field of economics, generally regarded as one of the...
in 1982, and was a key leader of the Chicago School of Economics, along with his close friend Milton Friedman
Milton Friedman
Milton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...
.
While at Chicago, he was greatly influenced by Frank Knight
Frank Knight
Frank Hyneman Knight was an American economist who spent most of his career at the University of Chicago, where he became one of the founders of the Chicago school. Nobel laureates James M. Buchanan, Milton Friedman and George Stigler were all students of Knight at Chicago. Knight supervised...
, his dissertation supervisor. Friedman, a friend for over sixty years, comments upon it as remarkable since only three or four students ever managed to complete their PhD dissertation under Knight in his 28 years at Chicago. Jacob Viner
Jacob Viner
Jacob Viner was a Canadian economist and is considered with Frank Knight and Henry Simons one of the "inspiring" mentors of the early Chicago School of Economics in the 1930s: he was one of the leading figures of the Chicago faculty.- Biography :Viner was born in 1892 in Montreal, Quebec to...
and Henry Simons also influenced him and, among his students, W. Allen Wallis and Milton Friedman.
Stigler is best known for developing the Economic Theory of Regulation, also known as capture
Regulatory capture
In economics, regulatory capture occurs when a state regulatory agency created to act in the public interest instead advances the commercial or special interests that dominate the industry or sector it is charged with regulating. Regulatory capture is a form of government failure, as it can act as...
, which says that interest groups and other political participants will use the regulatory and coercive powers of government to shape laws and regulations in a way that is beneficial to them. This theory is a component of the public choice field of economics. He also carried out extensive research in the history of economic thought
History of economic thought
The history of economic thought deals with different thinkers and theories in the subject that became political economy and economics from the ancient world to the present day...
.
Stigler's most important contribution to economics was disseminated in his landmark article titled "The Economics of Information". According to Friedman, Stigler "essentially created a new area of study for economists." In this article, Stigler stressed the importance of information by writing, "One should hardly have to tell academicians that information is a valuable resource: knowledge is power. And yet it occupies a slum dwelling in the town of economics."
His 1962 article "Information in the Labor Market" developed the theory of search unemployment
Frictional unemployment
Frictional unemployment is the time period between jobs when a worker is searching for, or transitioning from one job to another. It is sometimes called search unemployment and can be voluntary based on the circumstances of the unemployed individual....
.
He was known for his sharp sense of humor, and wrote a number of spoof essays. In his book The Intellectual and the Marketplace, for instance, he proposed Stigler's Law of Demand and Supply Elasticities, that "all demand curves are inelastic
Elasticity (economics)
In economics, elasticity is the measurement of how changing one economic variable affects others. For example:* "If I lower the price of my product, how much more will I sell?"* "If I raise the price, how much less will I sell?"...
and all supply curves are inelastic too." The essay referenced studies that found many goods and services to be inelastic over the long run, as well as offering a supposed theoretical proof; he ended by announcing that his next essay would demonstrate that the price system does not exist. Another essay, on "Truth in Teaching," described the consequences of a (fictional) set of court decisions that held universities legally responsible for the consequences of teaching errors.
The Stigler diet
Stigler diet
The Stigler diet is an optimization problem named for George Stigler, a 1982 Nobel Laureate in economics, who posed the following problem: For a moderately active man weighing 154 pounds, how much of each of 77 foods should be eaten on a daily basis so that the man’s intake of nine nutrients will...
was named after him.
Stigler was born in Seattle, Washington, graduated from the University of Washington
University of Washington
University of Washington is a public research university, founded in 1861 in Seattle, Washington, United States. The UW is the largest university in the Northwest and the oldest public university on the West Coast. The university has three campuses, with its largest campus in the University...
in 1931 with a B.A and then spent a year at Northwestern University
Northwestern University
Northwestern University is a private research university in Evanston and Chicago, Illinois, USA. Northwestern has eleven undergraduate, graduate, and professional schools offering 124 undergraduate degrees and 145 graduate and professional degrees....
from which he obtained his M.B.A in 1932. It was during his studies at Northwestern that Stigler developed an interest in economics and decided on an academic career.
Due to a tuition scholarship that he received from the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
, Stigler enrolled at the university in 1933 to study economics and went on to earn his Ph.D.
Ph.D.
A Ph.D. is a Doctor of Philosophy, an academic degree.Ph.D. may also refer to:* Ph.D. , a 1980s British group*Piled Higher and Deeper, a web comic strip*PhD: Phantasy Degree, a Korean comic series* PhD Docbook renderer, an XML renderer...
in economics from the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
in 1938. His teaching experience began in 1936 at Iowa State College where he taught until 1938. He spent much of World War II
World War II
World War II, or the Second World War , was a global conflict lasting from 1939 to 1945, involving most of the world's nations—including all of the great powers—eventually forming two opposing military alliances: the Allies and the Axis...
at Columbia University
Columbia University
Columbia University in the City of New York is a private, Ivy League university in Manhattan, New York City. Columbia is the oldest institution of higher learning in the state of New York, the fifth oldest in the United States, and one of the country's nine Colonial Colleges founded before the...
, performing mathematical and statistical research for the Manhattan Project
Manhattan Project
The Manhattan Project was a research and development program, led by the United States with participation from the United Kingdom and Canada, that produced the first atomic bomb during World War II. From 1942 to 1946, the project was under the direction of Major General Leslie Groves of the US Army...
. He then spent one year at Brown University
Brown University
Brown University is a private, Ivy League university located in Providence, Rhode Island, United States. Founded in 1764 prior to American independence from the British Empire as the College in the English Colony of Rhode Island and Providence Plantations early in the reign of King George III ,...
. He served on the Columbia faculty from 1947 to 1958.
Stigler was a founding member of the Mont Pelerin Society
Mont Pelerin Society
The Mont Pelerin Society is an international organization composed of economists , philosophers, historians, intellectuals, business leaders, and others who favour classical liberalism...
, and was president from 1976 to 1978.
He also received National Medal of Science
National Medal of Science
The National Medal of Science is an honor bestowed by the President of the United States to individuals in science and engineering who have made important contributions to the advancement of knowledge in the fields of behavioral and social sciences, biology, chemistry, engineering, mathematics and...
in 1987.
External links
- Biographical Memoir: George Joseph Stigler by his friend and colleague Milton FriedmanMilton FriedmanMilton Friedman was an American economist, statistician, academic, and author who taught at the University of Chicago for more than three decades...
- Biography of George Stigler
- George Stigler's seminal studies of industrial structures, functioning of markets and causes and effects of public regulation.
- IDEAS/RePEc