He has to a considerable extent gotten away with murder. Because, Iâd say, unlike Milton Friedman, you have to be really very aware when you read George Stigler of these preconceptions. You know, a lot of people that read George Stigler are quite surprised when you tell them how, of course, very pro markets he was. OK, they realise that he was at Chicago and that sort of thing. But he is wonderful in disguising himself, with his wonderful, his very funny, ironic, cynical stance. (Conversation with Mark Blaug, April 1998)
By Way of a Prologue
George Stigler did not think much of case studies, the 1950s Harvard approach to industrial organization. âEach new PhD gravely decided in some mysterious fashion whether the industry chosen for his doctoral dissertation was or was not acting in a socially desirable wayâ (Stigler 1988a:162). So perhaps he would have been amused or annoyed that his campaign to destroy the idea of monopolistic competition serves as an illustration of how marketing and ideological demands intertwine to shape methodological exposition. While Milton Friedman and his work might seem to provide a more obvious candidate for such a case study, because he was much more the public face of the Chicago counter-revolution, it is easy to overlook the subtlety of his marketing which, at least for a number of professional readers, served to underplay the ideological component helping to shape and drive his work. If Chicago is to serve as an ideal encapsulation of the interplay of ideology and marketing in economics, then the logical imperative is to focus on someone who distinctly shaped that post-war Chicago School.
He identified with the University of Chicago. He cared about it, not just about his own progress. If something was good for the Economics Department, he approved. If the Department was in danger of losing somebody whom he felt would be a loss, he cared and he worked on it. He really had this funny identification, you see. What do I care if the Department moves ahead? I only care if Claire Friedland moves ahead. But George really cared. And he cared about the profession in the same way. (Conversation with Claire Friedland, October 1997)
As mentioned in previous chapters, both his allies and antagonists recognized his unique way with an argument, the way he could package his ideas so that they would achieve maximum effect. âThat was another distinctive aspect of George. George was a terrific writer. He had real style.â (Conversation with Sherwin Rosen, October 1997) He was a witty debater and someone who could quickly eviscerate an opponent with a single line, as when he effectively sank Galbraithâs argument of countervailing power by titling his critical remarks âAn Economist Plays with Blocsâ (Stigler 1954). He simply had the knack of marshalling an array of rhetorical devices and ploys to distract and entice his readers and/or listeners.
I think he was one of the most difficult people to explain because I mean, there is no one like him. Iâve described how in an argument he jumps around. He puts in a bit of theory, a bit of statistics, a reference to the earlier economists. Itâs like no one elseâs form of argument that you can recall. (Conversation with Ronald Coase, October 1997)
Accordingly, the way George Stigler defended price theory (his first and most intense economic infatuation) against contending frameworks displays his use of marketing as a competitive device. The way he sought to bury Chamberlin and his alternative ideas raises questions that are essential when considering the effect that ideology has on economic thinking. Does it in fact matter that Stigler sought to destroy, rather than attempting to evaluate a theory he found both distasteful and dangerous? Crucial here is his ability to influence both his own department and the profession at large. Truth doesnât shine forth capable of recognition simply by those who squint in that direction. At the heart of any continuing conversation is persuasion. That Stigler harnessed his own abundant powers of persuasion to achieve predetermined ideological objectives is what needs continuing evaluation and judgment. Perhaps those with the greatest powers are those most needful of taking care.1 âSo, heâs made a lot of difference, at the university at least, to the economics department. He was a real presence.â (Conversation with Ronald Coase, October 1997)
There arenât too many people who can draw a circle around them, the way he did. I think itâs vanished from intellectual life. I think this university had several people like that. In Physics, there was a guy that everyone just came here to be around. I donât get the impression that there are many people like that in economics today. Maybe there never were. [laughs] I think Marshall was, from what I can gather. He had this huge influence on his students. Friedman had a very huge influence on his students, but he was also a very difficult person to deal with, in a much different way than George. He was a much different type of person than George was. I donât know if Milton attracted as many people around him. He attracted his share, but not in the same way as George did. George was just a lot different. (Conversation with Sherwin Rosen, October 1997)
The Chicago School of Anti-Monopolistic Competition2
Years later when I was a professor at Columbia University, I attended a meeting of the American Economic Association in Washington D.C. and on the flight back to New York to my surprise I found myself sitting next to Edward Chamberlin. He opened the conversation, âYou and Professor Knight are the two most mistaken economists I know on the subject of monopolistic competition.â Thank heaven it was a short trip. (Stigler 1988: 58n)
I. Stiglerâs Counter-Reformation
Bliss was it in that dawn to be aliveBut to be young was very heaven!(Wordsworth (1809) âThe French Revolution, as it Appeared to Enthusiastsâ)
For all his lifelong striving after consistency, George Stiglerâs public and private personae fundamentally clashed. Not a trace of ambiguity existed in the public image he so carefully cultivated over the many decades of his academic life.3 To his younger colleagues and associates alike he managed to maintain the unyielding image of a stern Protestant father. Stigler persistently projected a conservative, unquestioned authority whose definitive views brooked no argument.
But how much of that was show, and how much was actual belief⊠There was a lot of show in that. I mean there is no doubt. He had this Protestant father image and he constantly supported that image. One way to do it was just to wave your hands. At times he just waved his hands. (Conversation with Sam Peltzman, October 1997)
Well, he was very intimidating in his critical approach. Your biggest fear was that he would make a joke at your expense. So one was always somewhat on guard. (Conversation with Sherwin Rosen, October 1997)4
Shades of grey simply did not exist in his carefully constructed intellectual spectrum. This preferred colour palette was a trait perhaps inherent in his own personality, but certainly nurtured and allowed to flourish at Chicago where the Marquis of Queensberry persistently failed to put in even a token performance.5 He was a street fighter, living in a world where battles were fought in dire earnest with no quarter provided.6 Influence was exerted entirely by pursuing a âpuristâ agenda. He moulded himself into the type of economist who was incapable of taking a step backward.
At the other extreme is the purist, who wishes to implement his economic reforms directly and not later than Friday. His reforms will be stated in stark and preferably outrageous, terms, to dramatize their differences from the present situation. His policies are right, and alternative policies are wrong, as can be shown mathematically. The âpracticalâ difficulties in a radical change of policy are to him a euphemism for cowardice and mental confusion. (Stigler 1963b:23â24)
Though surprisingly, for someone who took his economics so seriously, Stigler never became unduly impressed with himself. A lot of the âbrash young man from the provincesâ failed to wash away.7 Nor for that matter, despite all his international experience and subsequent sophistication did the sharpness of his very American viewpoint really fade to any noticeable degree.8 However, that tough, unrelenting surface may have disguised an inherent shyness, an individual who suffered from being uncomfortable in unfamiliar environments, keeping people at a distance with a gruff joke at their expense.
Aaron Director: I think George was shy.Rose Friedman: I think basically Aaronâs correct though Iâm not sure that I would call it âshy.â I think George was very sensitive.Aaron Director: Oh, I think that. I agree. (Conversation with Rose Friedman and Aaron Director, August 1997)
However, experience should teach us that such two-dimensional figures rarely exist, no matter how carefully or plausibly the façade is constructed and maintained. George Stigler was no exception, but rather an exceedingly complex individual, more of a conundrum and an unsolvable puzzle than anything else.9 If then we are to understand his work, we need to focus not only on his academic output, but on his motives as well.10 It is not sufficient merely to set out his accomplishments. Any deeper understanding requires an extensive exploration of his intentions and objectives. Without properly exploring the relevant context of his work, articles are comprehended only at a relatively superficial level. This is especially so in the case of George Stigler. Perhaps a strong hint of this motivation is provided by his continued interest in the economics profession itself. He was alert to what incentives effectively moved its members and caused the profession to change, and how new theories and modes of analysis developed.
He identified very much with the profession. He cared whether the profession moved ahead. So much of his work dealt with issues concerning the profession. If you look at my catalogue of his papers, youâll see what I mean. There are a lot of categories under the heading âProfessionalism.â (Conversation with Claire Friedland, October 1997)11
His continued interest in the mechanics of the discipline itself was not limited to the more standard History of Thought aspects of the subject. He also took something of a sociological stance, striving to understand what drove economists to perform. Although he above all others acknowledged the self-interested motivations and the rent-seeking behavior lurking behind human action, Stigler characterized the profession as dominated by a search for knowledge and understanding.12 He never quite squared his intense belief that human action was reducible to narrow self-interest with this more transcendent version of the objective professional removed from all distraction and temptation. His sometimes strained attempts to balance these conflicting motivations infected his thoughts with a persistent whiff of cognitive dissonance swirling around them. True economists, those honestly following their chosen calling, were almost by definition incapable of being solely motivated by narrow, self-interested gains.13
We wish to be scientists, with sound logic in our theories, reliable procedures in our empirical applications of those theories, and objective and fair-minded statements of the limitations of our knowledge. (Stigler 1976a:353)
Ostensibly for Stigler, this scientific imperative became far more powerful for him than any possible policy implications his work might contain or that might be implied and pursued by any other economist.14 The advancement of knowledge and its usefulness as a platform for future analysis was indisputably paramount in forming his conception of the academic economist. He remained adamant that ideology or outside influences did not, and could not possibly, affect professional work.15 This went beyond simply a belief in the integrity of its practitioners.
One evidence of professional integrity of the economist is the fact that it is not possible to enlist good economists to defend protectionist programs or minimum wage laws. The groups who seek such legislation accordingly must seek elsewhere for their spokesmen and theoristsâand judging by their success, the ersatz economists do their work well. (Stigler 1976a:349)16
In terms of integrity, no economist, or certainly very few, is known to have directly shifted positions according to the whims of his or her current paymaster. Vested interests, then, need not inherently corrupt practicing economists. However, the very nature of the profession, one that encompasses a sufficiently diverse and divergent group, would allow any vested interest to shop for and find an appropriately matched view. Nor would it appear exceptional for an economist to fiercely market his or her honestly held position in order to gain such advantageous recognition.
It is possible, and in fact usually the case, that an intellectual can please his customers without recourse to professing beliefs he does not actually hold, or other dishonourable practices. Each economist has a variety of views and let us assume for a moment that they come directly from heaven or hell. Unless one of us is singularly narrow in his inventory of views, some of the views appeal to some people and some views to others, and the audiences to which they appeal vary widely in size. It would be astonishing if we did not cultivate those views which had the largest audiences. (Stigler 1976a:349)17
It would seem reasonable to agree with Stigler that economists, for the most part, do not change their views to suit special interests. Economists are not especially venal, but they are human, as even George Stigler was for...