Stigler on the Science of Economics
A Tale of Two Knights
Originally published in George Stigler
Our focus in this chapter will be on the methodological role that Stigler played in validating what he regarded as the science of economics that he had inherited from his own teacher, Frank Knight, and how this affected his understanding not only of economic theory but also public policy. Stigler’s understanding of economic science, viewed from a Knightian perspective, illustrates the evolution of economic science in twentieth-century neoclassical economics in two respects. First, it illustrates what was deemphasized and what was later carried forward from Knight by the generation of Chicago economists following WWII. Second, it highlights how Stigler’s understanding of Knight contributed and detracted from the mainline of economic science and its public policy relevance.