George Stigler

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Another [new economic theory] has to do with bilateral trade and the geometry of markets, culminating eventually in a model of humans in which they're allowed to change their tastes. Now, it sounds very strange to say that economic theory falls apart when human beings change their tastes. But since at least the late 1970s, we've had an excuse in place in the work of Becker and Stigler, that allows us to make assumptions about human beings that are known to be wildly untrue. And the way out, strangely enough, is through differential geometry, the differential geometry of markets. So that's something that I think we're going to be very interested in bringing to you. I don't know whether the idea of geometric markets is something that can be easily explained to a mass audience. But this theory of geometric marginalism is, in fact, a starter theory, that, if that is successful, might allow us to discuss an even more profound attempt, which would be this concept that I've called Geometric Unity.

- Eric Weinstein on The Portal Episode 2

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Eric Weinstein

@EricRWeinstein

Becker & Stigler go to Lunch.

Waiter: For you, Dr. Stigler? Stigler: I'll have what Gary's having. Waiter: Dr. Becker? Becker: The Usual.

2:45 AM · Jul 12, 2009

Eric Weinstein

@EricRWeinstein

"Economists could not understand how so fine an economist as Coase could make so obvious a mistake." -UChicago peer reviews Coase [Stigler]

6:30 AM · Nov 16, 2009

Eric Weinstein

@EricRWeinstein

"[After] 2 hours of argument, the vote went from 20 against and 1 for Coase to 21 for Coase." -Chicago Econ. reviews itself. [Stigler]

6:35 AM · Nov 16, 2009

Eric Weinstein

@EricRWeinstein

@ubfid Hi Fergus. The Stigler quotes come from the 'Eureka!' chapter in his autobiography: http://bit.ly/CoaseStigler

6:46 AM · Nov 16, 2009

Eric Weinstein

@EricRWeinstein

You mean field. Economics is actually all about fields: field operators & field theory.

Technically, inflation is classically like a Wilson Loop observable on path spaces. But economists have historically denigrated path-dependent approaches (e.g. 'cycling problems', 'drift').🤷

4:56 AM · Nov 8, 2021

Michael Saylor

@saylor

There is a different inflation rate for every consumer, varying all the time, depending on their consumption requirements and jurisdiction. Inflation is a vector, not a scalar. Just like fluid dynamics & aerodynamics, it is impossible to model an economy with simple arithmetic.

1:03 PM · Nov 8, 2021

Eric Weinstein

@EricRWeinstein

You have no idea how crazy econ got to make us all the same so that what we're saying can be ignored. Seriously, think about asserting that all folks have the same tastes & that they can never change so that economists can use 'Stable preferences...relentlessly & unflinchingly'.

4:56 AM · Nov 8, 2021

Eric Weinstein

@EricRWeinstein

You will see in the inflation literature various bizarre tendencies to introduce 'homogenous' or 'homothetic' utility functions and to hold these functions fixed. Ultimately it fell to 2 giants to claim that taste is universal. That way, rich/poor, you/me all have common utility.

4:56 AM · Nov 8, 2021

Eric Weinstein

@EricRWeinstein

“The combined assumptions of maximizing behavior, market equilibrium, and stable preferences, used relentlessly and unflinchingly, form the heart of the economic approach...” -Gary Becker

Followed by inexplicable & inscrutable 'work' of Becker & Stigler: https://sciencedirect.com/science/article/abs/pii/016726818990067X

4:56 AM · Nov 8, 2021

Eric Weinstein

@EricRWeinstein

The move to look out for is 'Superlative price index numbers give an excellent approximation to the true 'Cost-Of-Living'!" which totally sidesteps the field issue you bring up, the dynamic taste issue (replaced by 'Stable preferences'), & inequality (replaced by homotheticity).

4:56 AM · Nov 8, 2021

Eric Weinstein

@EricRWeinstein

All of these simplifications are made better in a fully path dependent field theory framework with endogenously determined differential operators.

Claiming we all have the same unchanging tastes (e.g. Becker-Stigler) and working in simplified regimes isn't at all understandable.

4:56 AM · Nov 8, 2021

Eric Weinstein

@EricRWeinstein

It's like publishing a number for the temperature in the US in 2020. Your path dependent price index measure of inflation is as individual as your commute. It's *mildly* meaningul to posit a 'representative commute to work' that doesn't depend on our various routes. But not very.

4:56 AM · Nov 8, 2021

Eric Weinstein

@EricRWeinstein

And we are not even trying to measure that. To this day, I can't *really* understand what CPI-U is. That is either because I'm too dumb, or the field has gone mad agreeing with itself while disconnected from reality. And I believe no one is that dumb. Even on a really bad day...

4:56 AM · Nov 8, 2021

Eric Weinstein

@EricRWeinstein

I believe Epstein is referring implicitly to the “Stigler Commission” of 1959-1961.

This comes from a phone conversation around 2004.

9:18 PM · Nov 17, 2025

noah kulwin

@nkulw

“inflation is a concept from the 50s” what did he mean…

5:14 AM · Nov 12, 2025

Eric Weinstein

@EricRWeinstein

In a telephone conversation around 2004, he somehow was already well aware of the 1996 Boskin Commission and Harvard Economics department burying our work on Gauge Theory in economics called “Geometric Marginalism”. That seemed pretty weird at the time.

With the benefit of hindsight and scrutiny, I now understand that he was connected to AT LEAST two of my colleagues from my time as an Economist in the @HarvardEcon department and @nber. To say nothing of the fact that he was connected to AT LEAST two more of colleagues from my time as an math graduate student in the @HarvardMath department. He was evidently in the background of *everywhere* I was over three and a half decades from 1985-2019. It’s astounding.

I believe from memory what he means is the following:

In the 1950s inflation was not yet the tool of policy that it became after the “Price Statistics Review Committee” around 1960, and the indexing of Social Security to CPI in the mid 1970s. It was a simple gauge.

After that time, it became a quiet tool. And a weapon. You could use it to transfer not billions…but trillions. Why? Because a GIANT amount of all U.S. Federal receipts are indexed.

He thought it was funny that we expected our work to be heard given that trillions were being stolen.

I hope that there is a transcript of this conversation as well as the gravity phone calls about GU. If so, it will likely point back to Litauer and Rosovsky, Jorgenson and Summers.

9:18 PM · Nov 17, 2025

Eric Weinstein

@EricRWeinstein

So to sum it up: he is not wrong.

I think what I said to him is that after the 1950s, inflation became a modern tool/weapon rather than a measurement starting with the Stigler Commisson. I explained my view that the @BLS_gov is a quiet version of the @federalreserve. An insanely powerful “Statistics” organization where economists actually implement policy by simply chosing how to compute economic numbers.

Numbers that just so happen to automatically transfer trillions and touch every aspect of our lives.

He already knew a lot of the Boskin/GaugeTheory story from Harvard. Less about Stigler if I remember correctly.

I’d love to ask Larry about all this now.

9:38 PM · Nov 17, 2025

Related Pages

• Eric’s Most Important Set of Books
• Gauge Theory of Economics
• Price Statistics Review Committee (Stigler Commission)