Stigler was born in Seattle, Washington, the son of Elsie Elizabeth (Hungler) and Joseph Stigler.[1] He was of German descent (and Hungarian on his mother's side)[2] and spoke German in his childhood.[3] He 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 MBA in 1932. It was during his studies at Northwestern that Stigler developed an interest in economics and decided on an academic career.[4]
After he received a tuition scholarship from the University of Chicago, Stigler enrolled there in 1933 to study economics and went on to earn his PhD in economics in 1938.
At Chicago, he was greatly influenced by Frank Knight, his dissertation supervisor. Milton Friedman, a friend for over 50 years,[5] commented that it was remarkable for Stigler to have passed his dissertation under Knight, as only three or four students had ever managed to do so in Knight's 28 years at Chicago. Stigler's influences included Jacob Viner and Henry Simons as well as students W. Allen Wallis and Friedman.
Stigler is best known for developing the Economic Theory of Regulation (1971), also known as regulatory 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 but is also deeply opposed by public choice scholars belonging to the "Virginia School," such as Charles Rowley.[6] He also carried out extensive research in the history of economic thought.
Stigler's most important contribution to economics was published in his landmark 1961 article, "The Economics of Information."[7] According to Friedman, Stigler "essentially created a new area of study for economists." Stigler stressed the importance of information: "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."[4]
His 1962 article "Information in the Labor Market" developed the theory of search unemployment.[8]
He was known for his sharp sense of humor, and he 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: "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 and offered a supposed theoretical proof; he ended by announcing that his next essay would demonstrate that the price system does not exist.
Another essay, "A Sketch on the Truth in Teaching," described the consequences of a (fictional) set of court decisions that held universities legally responsible for the consequences of teaching errors.[10] The Stigler diet is also named after him.[11]
Stigler wrote numerous articles on the history of economics, published in the leading journals and republished 14 of them in 1965. The American Economic Review said, "many of these essays have become such well-known landmarks that no scholar in this field should be unfamiliar with them... The lucid prose, penetrating logic, and wry humor... have become the author's trademarks."[12][13] However, Deirdre McCloskey has criticised his characterisation of Adam Smith as a father of the 'greed is good' school of economics as a poor reading of the Scottish philosopher's views.[14]
(1961). "The Economics of Information," Journal of Political Economy, 69(3), pp. 213–225.
(1962a). "Information in the Labor Market." Journal of Political Economy, 70(5), Part 2, pp. 94–105.
(1962b). The Intellectual and the Marketplace. Selected Papers, no. 3. Chicago: University of Chicago Graduate School of Business. Reprinted in Sigler (1986), pp. 79–88
(1962c). (With Claire Friedland) "What Can Regulators Regulate," Journal of Law and Economics, pp. 3–21.
(1962d). "The problem of the Negro," "New Guard" 101(5), pp. 11–12.
(1963). (With Paul Samuelson) "A Dialogue on the Proper Economic Role of the State." Selected Papers, no. 7. pp. 3–20. Chicago: University of Chicago Graduate School of Business
(1963). Capital and Rates of Return in Manufacturing Industries. National Bureau of Economic Research, Princeton, NJ: Princeton University Press
For comprehensiveness, see Vicky M. Longawa (1993), "George J. Stigler: A Bibliography," Journal of Political Economy, 101(5), pp. 849–862. Arrow–scrollable.
^Sowell, Thomas (1996), Migrations and Cultures: A World View, New York: Basic Books, p. 82, ISBN978-0465045891, ...it may be indicative of how long German cultural ties endured [in the United States] that the German language was spoken in childhood by such disparate twentieth-century American figures as famed writer H. L. Mencken, baseball stars Babe Ruth and Lou Gehrig, and by the Nobel Prize-winning economist George Stigler.
^Palda, Filip. A Better Kind of Violence: The Chicago School of Political Economy, Public Choice, and the Quest for and Ultimate Theory of Power. Cooper-Wolfling Press. 2016.
^George J. Stigler (1961). "The Economics of Information," Journal of Political Economy, 69(3), pp. 213–325.Archived 2010-06-21 at the Wayback Machine
^George J. Stigler (1962). "Information in the Labor Market." Journal of Political Economy, 70(5), Part 2, pp. 94–105.Archived 2022-02-21 at the Wayback Machine
^George J. Stigler, 1973. "A Sketch of the History of Truth in Teaching," Journal of Political Economy, 81(2, Part 1), pp. 491Archived 2024-03-01 at the Wayback Machine–495.
^Thomas Sowell, review in American Economic Review (June, 1965), p. 552.
^George J. Stigler, Essays in the History of Economics (University of Chicago Press, 1965).
^McCloskey, Deirdre Nansen, Preface, Mullen, Roger, Smith, Craig, & Mochrie, Robbie (eds.) *2023), Adam Smith: The Kirkcaldy Papers, Adam Smith Global Foundation, Kirkcaldy, pp. 7 & 8, ISBN9781399963497.
^Reviewed at Shepard B. Clough (1965). "Essays in the History of Economics. George J. Stigler," The Journal of Modern History, 37(3), p. 357.[permanent dead link] & Herbert M. Bernstein (1967), "Essays in the History of Economics by George J. Stigler," Technology and Culture, 8(1), pp. 136–138.Archived 2024-03-01 at the Wayback Machine
References
Diamond, Arthur M., Jr. (2005). "Measurement, Incentives, and Constraints in Stigler's Economics of Science." The European Journal of the History of Economic Thought 12, no. 4637–63.
Friedman, Milton (1993). "George Stigler: A Personal Reminiscence," Journal of Political Economy 101(5), arrow-scrollable pp. 768–773.
Friedman, M. (1999). "George J. Stigler, 1911–1991. National Academies Press. A Biographical Memoir.
Hammond, J. Daniel, and Claire H. Hammond, ed. (2006). Making Chicago Price Theory: Friedman–Stigler Correspondence, 1945–1957. Routledge. 165 pp. ISBN0-415-70078-7.
Palda, Filip (2016). A Better Kind of Violence: Chicago Political Economy, Public Choice, and the Quest for an Ultimate Theory of Power. Cooper-Wolfling Publishers. ISBN978-0-9877880-7-8.
