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.
- A rational man must be guided by the incentive system within which he operates. No matter what his own personal desires, he must be discouraged from certain activities if they carry penalties and attracted toward others if they carry large rewards. The carrot and the stick guide scientists and politicians as well as donkeys.
- Stigler (1975, p. 171) as cited in: Owen E.Hughes (2003) Public Management and Administration. p. 11
- Economists are neither distinctively good nor bad, no more or less virtuous or brave or generous or faithful than the sum of mankind, and certainly no more modest.
- Memoirs of an Unregulated Economist (1988), Prologue: Are Economists Good People?
"The economics of information," 1961
Stigler, George J. "The economics of information." The journal of political economy (1961): 213-225.
- One should hardly have to tell academicians that information is a valuable resource: knowledge is power. And yet this occupies a slum dwelling in the town of economics. Mostly it is ignored.
- p. 213 ; lead paragraph
- Some important aspects of important aspects of economic organization take on a new meaning when they are considered from the viewpoint of the search of information.
- p. 213
- Price dispersion is a manifestation — and, indeed, it is the measure — of ignorance in the market. Dispersion is a biased measure of ignorance because there is never absolute homogeneity in the commodity if we include the terms of sale within the concept of the commodity. Thus, some automobile dealers might perform more service, or carry a larger range of varieties in stock, and a portion of the observed dispersion is presumably attributable to such differences. But it would be metaphysical, and fruitless, to assert that all dispersion is due to heterogeneity.
- p. 214
"The theory of economic regulation," 1971
Stigler, George J. "The theory of economic regulation." The Bell journal of economics and management science (1971): 3-21.
- The state --the machinery and power of the state-- is a potential resource or threat to every industry in the society. With its power to prohibit or compel, to take or give money, the state can and does selectively help or hurt a vast number of industries. That political juggernaut, the petroleum industry, is an immense consumer of political benefits, and simultaneously the underwriters of marine insurance have their more modest repast. The central tasks of the theory of economic regulation are to explain who will receive the benefits or burdens of regulation, what form regulation will take, and the effects of regulation upon the allocation of resources.
- p. 3; Lead paragraph
- Regulation may be actively sought by an industry, or it may be thrust upon it. A central thesis of this paper is that, as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit. There are regulations whose net effects upon the regulated industry are undeniably onerous; a simple example is the differentially heavy taxation of the industry's product (whiskey, playing cards). These onerous regulations, however, are exceptional and can be explained by the same theory that explains beneficial (we may call it "acquired") regulation.
- p. 3
- Two main alternative views of the regulation of industry are widely held. The first is that regulation is instituted primarily for the protection and benefit of the public at large or some large subclass of the public. In this view, the regulations which injure the public -as when the oil import quotas increase the cost of petroleum products to America by $5 billion or more a year- are costs of some social goal (here, national defense) or, occasionally, perversions of the regulatory philosophy. the second view is essentially that the political process defies rational explanation: "politics" is an imponderable, a constantly and unpredictably shifting mixture of forces of the most diverse nature, comprehending acts of great moral virtue (the emancipation of slaves) and of the most vulgar venality (the congressman feathering his own nest).
- p. 3
"George J. Stigler - Banquet Speech," 1982
"George J. Stigler - Banquet Speech". Nobelprize.org. Nobel Media AB 2013. Web. 16 Jun 2014.
- Unlike the members of the physical and biological sciences, the economist is asked to explain his work in a manner that is interesting and convincing to a weary listener. Yet there is no reason to believe that the explanation of our economic and social world is inherently simpler than the explanation of our physical world.
- The delicate and intricate pattern of competition and cooperation in the economic behavior of the hundreds of thousands of citizens of Stockholm offers a challenge to the economist that is perhaps as complex as the challenges of the physicist and the chemist.
"George J. Stigler - Biographical," 1982
George J. Stigler. "George J. Stigler - Biographical," The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1982
- Early in my professional life, I found that many areas of economics attracted me. I started working and publishing in price theory by 1938. In 1946, I published an early work on linear programming (The Cost of Subsistence) which solved the problem only approximately; George Dantzig soon presented the exact solution. In the 1940s, I began empirical work on price theory, starting with a test of the kinked oligopoly demand curve theory of rigid prices.
- In the 1950s, I proposed the survivor method of determining the efficient sizes of enterprises, and worked on delivered price systems, vertical integration, and similar topics.
- It was in the 1960s that I began the detailed study of public regulation. My interests were aroused, and my faith in the cliches of the subject destroyed, as so often with other subjects, by the discussions with my friend, Aaron Director. This wonderful man is that rarest of scholars: a clear-headed, imaginative, erudite man who enjoys the task of constructing luminous and original theories but does not even write them down!
"The Effect of Government on Economic Efficiency." 1988
"The Effect of Government on Economic Efficiency." Business Economics (1988): 7-13.
- I do not conceal my lack of admiration for a pain fully long list of redistributive measures undertaken by modern governments. Many serve no ethically accepted purpose such as compassion for the needy; indeed, they serve only as recognition of which groups possess or lack political influence.
- A useful role exists for the economist is making calculations of the prospective costs and/or benefits of alternative policies. This role is precisely the one Keynes had in mind, I assume, when he expressed the hope that we would become useful after the fashion of dentists.
- Dr. Smith and all of his sensible disciples have believed that people would not strive to do anything well unless there were a reasonable measure of agreement between the success of their efforts and the rewards they would receive.
- We are entitled to be disappointed, but not to be surprised, by the persistence of governmental intervention in economic life. A school of thought attributes great influence to public opinion in the movements toward or away from laissez-faire. Among the many members of this school one may mention Albert Venn Dicey, John Maynard Keynes, and Milton Friedman.
- A proposed principle of legitimacy states that every action set by a legislature represents a social judgment that society is better off for that action. Thus all governmental policies are by hypothesis utility-increasing for the nation. Any costs of (say) a redistribution of income are less than the benefits. National output as presently measured can and usually will fall when a new redistribution of income is instituted, because it is costly to redistribute income. Is this trend in governmental policy likely to be reversed, perhaps by a general movement toward deregulation?
- The Principle of Legitimacy tells us that the sum of these deadweight losses is less than the legislature's estimate of the gains from the redistribution of income, but Legitimacy does not tell us that these are desirable transfers, i.e, that one dollar taken from the general consumer and given to a well-paid employee of the merchant marine constitutes a net increase in the utility of the nation. If I challenge this interpretation, all that I will be doing is asserting that George Stigler's tastes are not those of the Congress, and who, besides myself, cares about that? Indeed, even I have become reconciled to the fact that American society does not fully share my preferences.
- In spite of assigning little influence of economists' preachings on actual public policy, I do not believe that economists' influence is negligible. The reconciliation of these views lies in the fact that economists are scientists as well as preachers. Our science seeks to understand how economic institutions and economic systems work, and no informed person can deny that we have made much progress in this work.
Quotes about George Stigler
- George’s most distinctive contributions to the Chicago school involved studies of the actual effects of government regulations, such as in the electric utility and financial sectors.
- Robert Barro, Nothing Is Sacred (2002), Ch. 1 : Thoughts on Friends and Other Noteworthy Persons
- I recall an incident involving the late George Stigler at a conference in Spain in the 1980s. Hearing that I had written a book on reason and natural law, Stigler started to ridicule reason, going so far as to say that there is as much reason in a monkey's antics as in any human act. At that point I asked him whether he was trying to tell me something about how he wrote his books; he gave me a blank stare and stormed out of the room.
- Frank Van Dun (2009) "Argumentation Ethics and the Philosophy of Freedom," in: Libertarian Papers. 1 (19). 1-32.