In Memoriam: Herbert Stein.

• Author: Breit, William
• Position: Brief Article - Obituary

Herbert Stein, President of the Southern Economic Association in 1984, and former Chairman of the Council of Economic Advisers under Presidents Nixon and Ford, died on September 8, 1999 after suffering a heart attack. He was 83 years old. He is survived by his son, Ben, his daughter, Rachel Epstein, and three grandchildren.

Herbert Stein was born in Detroit, Michigan, on August 27, 1916, to a working class family. His father, an immigrant from eastern Europe, worked for the Ford Motor Company as a blue-collar machinist. During the Great Depression a scholarship enabled Stein to enter Williams College in 1931, where he received a B.A. degree in 1935. He moved on to the University of Chicago where he worked toward his Ph.D. degree in economics under the doyens of the original Chicago school: Frank H. Knight, Jacob Viner, and Henry C. Simons. They made a deeply favorable impression on him. The work of Simons was particularly influential in shaping Stein's view of the role of government in the economy, particularly the necessity of maintaining a positive program for laissez-faire.

Stein was a prolific scholar and a major contributor to economic thought for almost six decades. A sampling of his various positions in government shows how invariably his interests were on practical policy formulation--the Federal Deposit Insurance Corporation, the Office of Price Administration, the War Production Board, and the Office of War Mobilization and Re-conversion. His Washington service was interrupted by a two-year military sojourn as a junior naval officer during World War II. In 1944 Stein won first prize in the much coveted Pabst Post-War Employment Competition, beating hundreds of competitors (including Alvin Hansen and Paul Samuelson) for an award whose monetary value was almost the equivalent of the then current Nobel prizes. This distinction catapulted Stein into early prominence. After the war, his interest in the shaping of public policy continued with his move into the private sector. For roughly 22 years, he was on the staff of the influential Committee for Economic Development (an or ganization of business leaders involved in research on national economic issues), and he served as its director of research for the last 10 years of his tenure there. It was at this time that Stein was largely responsible for developing and articulating the "high employment budget" concept and the importance of built-in fiscal stabilizers as part of the postwar...