There should be a Nobel Prize for Wit. Physicists, chemists, economists we can, in a pinch, do without. Peace we generally do do without. Wit is indispensable. Were there a prize for wit, George Stigler of the University of Chicago would have won it years ago. Instead, he has had to settle for the prize in economics.

Saul Bellow, a Chicagoan, has a character in a novel say: "There's the big advantage of backwardness. By the time the latest ideas reach Chicago, they're worn thin and easy to see through." But in economics, ideas radiate from Chicago, from the likes of Frank Knight, Milton Friedman (Nobel Prize, 1976) and Stigler. The Nobel Prize for Economics was established in 1968. Eight of the 11 Americans who have won it have either studied or taught at the University of Chicago.

Describing the difference between himself and Friedman, Stigler says: "Milton's out to save the world and I'm out to understand it." Stigler has changed the world by seeding it with writings and students. No one has contributed more than he has, through his analysis of regulatory costs, to clarifying the logic and price of public choices.

Joseph Schumpeter, who was an economist of Stiglerian drollness, said that the remarkable fact about Japan's 1924 earthquake is that it was not blamed on capitalism. Stigler masterfully de-moralizes arguments about American capitalism, about what markets can do and what can be done -- and at what cost -- to markets.

And then there are his scalpel-like satires of certain kinds of academic arguments, particularly in the social sciences. His fictitious Prof. Sidney Siegel discovers the "law of sympathy." The law is that "sympathy is always at a maximum":

"Siegel produced suitable objects of sympathy under laboratory conditions and then measured the amount of sympathy they elicited. The objects of sympathy were a set of students who were subjected to torture ranging from a hotfoot to what the experimentalist describes as 'scenes difficult to view with composure even before the next of kin arrived.' As the measure of sympathy, each observer was asked to draw a coin from one of three buckets. These buckets contained pennies, nickels, and $20 gold pieces, and the observer was asked to withdraw a coin proportional to the sympathy he felt for the student in the iron cage. Siegel found that sympathy is always at a maximum: whether the observer was laughing callously or sobbing in utter misery, he or she always withdrew a $20 gold piece, which under the conditions of the experiment he or she was entitled to keep."

In 1962, a real-life professor argued that automobile model changes are wasteful -- that if consumers had been content with 1949 automobiles, they would have been saving more than $700 per car by 1961 (lower advertising costs, lower retooling costs, etc.). Stigler suggested applying the same analysis to the professors' industry: publishing.

"Why must we have 'The Rise and Fall of the Third Reich' when 'The Rise and Fall of the Dutch Republic' is a better book? . . . What, precisely, are the respects in which Tennessee Williams surpasses Shakespeare?"

Economics, he notes, cannot answer such questions about values. But economists can demonstrate that if readers had been content with the books published prior to 1900, huge savings would have accrued: no more authors' royalties, lower advertising costs, no costly setting of new type.

Stigler applied the same principle to newspapers. There is nothing new under the sun, so why not just print lots of papers from 1900, once and for all? These newspapers would have the standard smattering of news about crime, the Boers, the Irish question. These newspapers would be cheaper, and "there would be a substantial reduction in efforts by people to get into the news."

"There would," he concedes, "be some delay in the dissemination of new knowledge . . . (but) keep two facts in mind: Most new knowledge is false; and the news got around in Athens."

The science of economics connects ends and means. Ends cost nothing to imagine; means usually are costly. So economics is called "the dismal science," which makes Stigler cross: "I resent the phrase, for only young children should get angry at a corpus of knowledge that prevents hopeless but costly endeavors."

Stigler's teacher, Frank Knight, said: "Anything that is inevitable is ideal." Knight's axiom is paradoxical, wise, witty, adult -- like Knight's honored students.