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Illustration by Shout

The Courage of Conviction

Stephen Grace, โ€™66, recalls how Booth gave him the confidence to take on one of the most prominent economists of the day.

There’s nobody who can’t be wrong, and I know that from what the University of Chicago taught me. As a student, I earned a sense of confidence that you could point out something you might disagree with. Attending my 50-year reunion reminded me of the life skills I learned while earning an MBA.

In my second year of the program, I was taking a class from George Stigler, PhD ’38 (Economics), who would go on to win the Nobel Memorial Prize in Economic Sciences in 1982. I wrote a paper that was good but only five pages long. I couldn’t turn in such a short paper, so I added another 13 pages of whatever I could. He returned my paper and summarized my work in two sentences: he liked it, but the first 13 pages were worthless. He was recognizing the paper for what it was, and I liked him for that.

Throughout the course, we built a relationship that I’d later call upon in my endeavor to challenge an economic theory as a new MBA graduate.

Two years after I graduated, I reached out to Stigler because I read a journal article I didn’t agree with, written by Paul Samuelson, AB ’35, who in 1970 became the first American to win the Nobel Memorial Prize in Economic Sciences. I wanted to point it out, but not in an arrogant way.

What Samuelson was dealing with was very important. He wrote that in certain situations, a planned economy would be even better than a competitive marketplace. I had never seen anybody say that or be able to establish that with models. I thought Samuelson’s argument had some shortcomings to it, so I wrote up my thoughts and sent them to Stigler.

I learned a fundamental building block for life: You do your best to do things the right way.

Stephen Grace

Now, Stigler was a guy people didn’t want on their dissertation committee—he was tough. But he responded right away: “You’re right, Samuelson is wrong, and I missed it.”

Ego can play a big part in the academic world—some feel that certain prominent people just can’t be wrong. But it doesn’t mean that you’re some wizard because you’re seeing it, no matter who wrote it.

After Stigler, I approached the editor of the Journal of Political Economy, Robert Mundell—then a University of Chicago professor and another future Nobel Prize winner—with the conclusion. The economists at the journal deliberated and decided I should submit this to the Quarterly Journal of Economics. When Mundell wrote me back to give me the journal’s assessment, he included the correspondence that happened along the way with the other economists who weighed in.

A year later, in July 1969, QJE’s Robert Dorfman, a former professor of political economy at Harvard, let me know: “It will be published along with a reply by Professor Samuelson, who concedes to your main point.” It was very impressive. You saw no game playing here. All of these people were future Nobel winners and there I was, just a little guy 18 months out of my MBA, trying to prove my point, with my name appearing next to theirs.

At Chicago, I learned a fundamental building block for life: You do your best to do things the right way. There was a focus on quality. The professors didn’t really care whether you spent two hours or two years. What counted was whether it was a good paper or a valid argument—it was all about merit. The faculty were outstanding, and you saw how thoughtful and thorough they were in their approach. My time here also taught me that great people work in groups.

That experience has stayed with me. As the founder of H.S. Grace & Company, a Houston consulting and litigation support firm of mostly retired C-suite executives and board members, I treat the people who work with me the same way. The thoroughness of drilling into big litigation cases requires that same type of work ethic. You have to be careful when reaching conclusions, because if you are not, somebody will hand you your head.

—As told to Alina Dizik