A web site in honor of UCLA economist Earl Thompson

In the 1970s, Earl Thompson started down a path of research that would continue through his career. This research represented the intertwining of institutions and public choice.

• “Taxation and National Defense“, Journal of Political Economy, Vol. 82, No. 4, p. 755 – 782, (1974). In this paper Thompson argues that the optimal tax structure for a country should be one that is structured around national defense. He presents evidence that the U.S. tax system is the approximately optimal tax system using this criteria.
• “An Economic Basis for the `National Defense Argument’ for Aiding Certain Industries,” Journal of Political Economy, Vol. 87, No. 1, (1979). This paper is essentially an extension of the previous paper in that Thompson argues that many protectionist policies are optimal when considered in the context of national defense. He again shows that U.S. policy is approximately optimal in this context.
• “On Labor’s Right to Strike“, Economic Inquiry, Vol. 28, p. 640 – 653, (1980). In this paper Thompson argues that under certain conditions a strike by workers will actually benefit capital owners. He argues that the right of labor to strike and the existence of strikes are often explained by the profitability of the strike to capital owners.
• “Characteristics of Worlds with Perfect Strategic Communication“, Journal of Economic Theory, Vol. 23, No. 1, p. 111 – 119, (1980). This paper as well as the one that follows are designed to discuss how institutions emerge in society. Thompson posits the idea of a hierarchical structure in society in which each group commits to a reaction function. The resulting institutions are Pareto optimal, given those reaction functions. This model pops up throughout Thompson’s subsequent work to explain why we get efficient institutions (like the defense-based tax system) despite the fact that very few people would be able to articulate its purpose. The paper below is a more popular extension of this paper.
• “A Pure Theory of Strategic Behavior and Social Institutions” (with Roger Faith), American Economic Review, Vol. 71, No. 3, p. 366 – 380, (1981).
• Ideology and the Evolution of Vital Economic Institutions: Guilds, The Gold Standard and Modern International Cooperation. (with Charles Hickson). Kluwer Academic Publishers, 2000. This book is an attempt to summarize and extend Thompson’s work on institutions, growth collapses, and globalization. The book is exploding with ideas. Some of them you will find convincing. Others you might find crazy. However, the book will make you think. You won’t get these types of arguments or this type of thinking from any other economist.
  • “A New Theory of Guilds and European Economic Development,” Explorations in Economic History, Vol. 28, p. 127 – 168, (1991).
• “What Globalization is Really All About.” This was a keynote address that Thompson gave at a conference. It is a short summary of Thompson’s career and his perspective on globalization.

This is far from an exhaustive account of Thompson’s work. For a summary of his work, see “A tribute to Earl A. Thompson and, in his own words, a summary of his general economic and social theory” by Don Allison Jr. and Thomas Borcherding in Public Choice, (2013).