Herbert Stein

Herbert Stein
9th Chair of the Council of Economic Advisers
In office
January 1, 1972 – August 31, 1974
President Richard Nixon
Gerald Ford
Preceded by Paul McCracken
Succeeded by Alan Greenspan
Personal details
Born (1916-08-27)August 27, 1916
Detroit, Michigan, U.S.
Died September 8, 1999(1999-09-08) (aged 83)
Washington, D.C., U.S.
Political party Republican
Education Williams College (BA)
University of Chicago (MA, PhD)
Academic career
Field Economic policy
Macroeconomics
School or
tradition		 Chicago school of economics
Influences Milton Friedman

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

Biography

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 sixteen. After graduating with Phi Beta Kappa honors, he went to Washington, D.C., 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, D.C. was married to Mildred Stein, who died in 1997 after 61 years of marriage. He is the father of lawyer, author, and actor Ben Stein (Ferris Bueller's Day Off, Win Ben Stein's Money) and writer Rachel Stein. Herbert Stein was also the original writer for the advice column Dear Prudence.

Philosophy

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 1976 as, "If something cannot go on forever, it will stop."[5][6] Stein observed this logic in analyzing economic trends (such as rising U.S. 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; it will stop of its own accord.[7] A more concise and witty paraphrase (not attributed to Stein) is: "Trends that can't continue, won't."

Bibliography

  • Herbert Stein (1995). On the Other Hand - Essays on Economics, Economists, and Politics. American Enterprise Institute. ISBN 978-0-8447-3877-2.
  • Herbert Stein (1996) [1969]. The fiscal revolution in America: policy in pursuit of reality. AEI Press. ISBN 978-0-8447-3936-6.
  • Herbert Stein (1994) [1984]. Presidential economics: the making of economic policy from Roosevelt to Clinton. American Enterprise Institute for Public Policy Research. ISBN 978-0-8447-3851-2.
  • Stein, Herbert (1986). "The Washington Economics Industry". The American Economic Review. 76 (2): 1–9. JSTOR 1818725.
  • Stein, Herbert (1960). "A Hard Look at America's Unfavorable Balance of Payments". The Annals of the American Academy of Political and Social Science. 330: 77–85. JSTOR 1032988.

References

  1. ↑ Ronall, Joachim O. (2007). Encyclopedia Judaica. 19 (2nd ed.). Detroit: Macmillan Reference USA. pp. 178–179.
  2. ↑ Jackson, Kenneth T., ed. (2002). The Scribner Encyclopedia of American Lives. 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, 1976). "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. p. 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 by
Paul McCracken		 Chair of the Council of Economic Advisers
1972–1974		 Succeeded by
Alan Greenspan
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