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Herbert Stein
9th Chair of the Council of Economic Advisers
In office
January 1, 1972 – August 31, 1974
PresidentRichard Nixon
Gerald Ford
Preceded byPaul McCracken
Succeeded byAlan Greenspan
Personal details
Born(1916-08-27)August 27, 1916
Detroit, Michigan, U.S.
DiedSeptember 8, 1999(1999-09-08) (aged 83)
Washington, D.C., U.S.
Political partyRepublican
EducationWilliams College (BA)
University of Chicago (MA, PhD)
Academic career
FieldEconomic policy
Macroeconomics
School or
tradition
Chicago school of economics
InfluencesMilton Friedman

Herbert Stein (August 27, 1916 – September 8, 1999) was an American economist, a senior fellow at the American Enterprise Institute, and a member of the board of contributors of The Wall Street Journal. He was the chairman of the Council of Economic Advisers under Richard Nixon and Gerald Ford. From 1974 to 1984, he was the A. Willis Robertson Professor of Economics at the University of Virginia.[1]

Biography

A meeting of Nixon administration economic advisors and cabinet members on May 7, 1974. Clockwise from Richard Nixon: George P. Shultz, James T. Lynn, Alexander M. Haig, Jr., Roy L. Ash, Herbert Stein, and William E. Simon.
A meeting of Nixon administration economic advisors and cabinet members on May 7, 1974. Clockwise from Richard Nixon: George P. Shultz, James T. Lynn, Alexander M. Haig, Jr., Roy L. Ash, Herbert Stein, and William E. Simon.

Stein was born on August 27, 1916, in Detroit, Michigan, and his family moved to New York during the Great Depression. He enrolled in Williams College just before he turned 16. After graduating with Phi Beta Kappa honors, he went to Washington, DC, to work as an economist in various agencies. He received his doctorate of philosophy in economics from the University of Chicago in 1958.[2]

Stein, who died September 8, 1999, in Washington, DC, was married to Mildred Stein, who died in 1997 after 61 years of marriage. He is the father of the lawyer, author, and actor Ben Stein and the writer Rachel Stein. Herbert Stein was also the original writer for the advice column Dear Prudence.

Views

Stein was known as a pragmatic conservative and was referred to as "a liberal's conservative and a conservative's liberal."[3] He was the author of The Fiscal Revolution in America.

In one article, Stein wrote that the people who wore an "Adam Smith necktie" did so to

make a statement of their devotion to the idea of free markets and limited government. What stands out in [Smith's seminal work] Wealth of Nations, however, is that their patron saint was not pure or doctrinaire about this idea. He viewed government intervention in the market with great skepticism. He regarded his exposition of the virtues of the free market as his main contribution to policy, and the purpose for which his economic analysis was developed. Yet he was prepared to accept or propose qualifications to that policy in the specific cases where he judged that their net effect would be beneficial and would not undermine the basically free character of the system.[4]

In Stein's reading, The Wealth of Nations could justify the Food and Drug Administration, the Consumer Product Safety Commission, mandatory employer health benefits, environmentalism, and "discriminatory taxation to deter improper or luxurious behavior."

Stein's Law

Stein propounded Stein's Law, which he expressed in 1986 as "If something cannot go on forever, it will stop."[5][6] Stein observed this logic in analyzing economic trends (such as rising US federal debt in proportion to GDP, or increasing international balance of payments deficits, in his analysis): if such a process is limited by external factors, there is no urgency for government intervention to stop it, much less to make it stop immediately, but it will stop of its own accord.[7] A paraphrase, not attributed to Stein, is "Trends that can't continue won't."

Bibliography

References

  1. ^ Ronall, Joachim O. (2007). Encyclopedia Judaica. Vol. 19 (2nd ed.). Detroit: Macmillan Reference USA. pp. 178–179.
  2. ^ Jackson, Kenneth T., ed. (2002). The Scribner Encyclopedia of American Lives. Vol. 5. New York: Charles Scribner's Sons. pp. 555–556.
  3. ^ Richard Pearson (September 9, 1999). "Economist Herbert Stein Dies". Washington Post. Retrieved June 11, 2018.
  4. ^ "Adam Smith Did Not Wear an Adam Smith Necktie, Wall Street Journal, April 6, 1994
  5. ^ Herbert Stein (January 16, 1986). "A Symposium on the 40th Anniversary of the Joint Economic Committee, Hearings Before the Joint Economic Committee, Congress of the United States, Ninety-Ninth Congress, First Session; Panel Discussion: The Macroeconomics of Growth, Full Employment, and Price Stability". p. 262. Retrieved June 4, 2018. I recently came to a remarkable conclusion which I commend to you and that is that if something cannot go on forever it will stop. So, what we have learned about all these things is that the Federal debt cannot rise forever relative to the GNP. Our foreign debt cannot rise forever relative to the GNP. But, of course, if they can't, they will stop. [Emphasis added.]
  6. ^ Herbert Stein (1989). "Problems and Not-Problems of the American Economy" (PDF). The AEI Economist. American Enterprise Institute: 1. Retrieved June 9, 2018. I have tried to comfort people who worry about this [the budget deficit and the trade deficit] by propounding Stein's Law, which is that if something cannot go on forever, it will stop. [Emphasis added.]
  7. ^ Herbert Stein (1997-05-16). "Herb Stein's Unfamiliar Quotations". Slate magazine. Retrieved 2007-09-24.
Political offices Preceded byPaul McCracken Chair of the Council of Economic Advisers 1972–1974 Succeeded byAlan Greenspan