Stein’s Law, formulated by economist Herbert Stein (and father of Ben Stein of Ferris Bueller’s Day Off fame) seems sillily simple but is actually profound. It states:
“If something cannot go on forever, it will stop.”
This is a very important rule to remember whenever you look at a chart with data that starts small at the bottom left and rockets up to the right. Here’s one such chart:
College costs can’t possibly continue to increase at the rate at which they’ve increased. Stein’s Law says that they won’t. Here’s a similar chart on healthcare costs in the U.S.:
If healthcare costs continue to rise as they have, at some point they’ll become the vast majority of our GDP. That’s just not possible. So, it won’t happen.
Another thing that can’t go on forever: the increase in human population on earth:
Human population just can’t continue this sort of increase. So it won’t (it’s slowed dramatically and population is expected to peak and then decline in the next 20-30 years).
Stein’s Law likely applies to:
- The U.S. can’t go on forever as the dominant superpower. Empires end up ending.
- 99% of all species that have existed on Earth have gone extinct. The Human race can’t go on forever. So it won’t.
- Moore’s Law, which basically provides that computer processor speed doubles every 18 months or so can’t continue forever. So it won’t.
- Increases in life expectancy can’t continue forever, so they will stop at some point (and in the U.S. life expectancy has recently started to decline).
- The U.S. government deficit can’t continue increasing forever.
Note that Stein’s Law doesn’t tell you when a trend will stop, just that it will stop if it can’t go on forever. This is incredibly useful to keep in mind. Especially when we are confronted with a trend that just seems to keep going and going and going.
A final point, Stein’s Law has two corollaries that have been proposed with respect to things that can’t go on forever:
- It will go on longer than we think (known as Davies’ Corollary)
- It will stop even without anyone doing anything about it
I sure hope Stein’s Law never applies to our daily IFODs. 🙂