A web site in honor of UCLA economist Earl Thompson

It was created by Josh Hendrickson, here is the whole thing.  I excerpt one part of it, I’ve done no additional indent but all of this following is from Hendrickson:

Institutions and Public Choice
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.
  • 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.
Other Work
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).


Yeoman work there...but what about UCLA's Farmer?

I'll never forget taking Earl Thompson's economic analysis of law class as an undergrad. One day another student threw up his hands and exclaimed, "this is not even realistic!" Thompson didn't miss a beat: "well, reality sucks!"

Let me guess: economic analysis of the law praises the status quo, since by definition over time that is what is tried and true, proving its worth. Such 'logic' is worthy of Jean Bodin (1530-1596), but that's what typical econ analysis says (Coase theorem evolved over time).

I suppose reality is what one wishes it to be. Every time I hear or read about "fake news" I'm reminded of the Seinfeld episode about fake orgasms. Elaine: "Fake, fake, fake, fake, fake, fake, fake, fake, fake." At least her intentions were noble. Ideology can be like that: in the service of one's ideology, fake news is justified if one's intentions are noble. https://www.nytimes.com/2017/08/15/books/review/democracy-in-chains-nancy-maclean.html

Hendrickson's site does not allow comments. I read Thompson's "keynote address," and found it puzzling in places. I began to lose the thread at the section on "Globalization." He says: "These new IMF loan conditions, 'reforms' promoted in the name of relieving domestic poverty and increasing domestic efficiency, insist the third-world countries increase their domestic taxes in order to support expanded education systems, substantially reduce governmental welfare programs, and improve the enforcement of property rights systems by expanding their court and penal systems. . . . Taken together, the intent of these 'reforms' is fairly clear. It is to make the country more 'investor-friendly', largely through the improvements in the domestic workforce and corresponding reductions in domestic wages" (p. 4). The last five words left me baffled: I see no connection between the "reforms" and a reduction in domestic wages, nothing to justify the word 'corresponding'. Thompson goes on: "The effect is to increase large-company profits and decrease wages and small-company profits . . . ." What do these "reforms" have to do with the sizes of companies? Thompson adds a remark about "the willingness of the post-Cold-War U.S. to allow ruling class business executives and large investors to escape prosecution for misleading the mass of small U.S. investors, which has recently resulted in the most redistributional market crass in U.S. history" (*ibid.*). First, I had not elsewhere seen such a claim about the redistributional character of the market crash; I wonder if it is true. Second, this seems to have nothing to do with *globalization*.
In the next section, "Globalization in Theory: Policy Implications," Thompson seems to say that the end of the Cold War led to a dramatic reduction in the competition among national leaders for population, as if international migration was easier during the Cold War than afterwards. It is hard for me to see why he would think this. Does it not seem that migration between EU countries was easier in the late 20th century than it had been earlier? But perhaps Thompson thinks of the EU as a political unit with its own "ruling class," the national divisions within it being unimportant, as apparently he thinks the political divisions internal to a nation--divisions into states, counties, Laender, provinces, wojewodstwa, etc., are negligible. Thompson locates the beginning of this intensified competition among national elites for population to the end of the Napoleonic Wars, again without explanation.
Thompson has a quasi-Marxist faith in the ability of the "ruling classes" to cooperate in the adoption of policies that favor them collectively, without (at least, in this talk) explaining in any detail why the lower classes cannot similarly cooperate and, in view of their much greater numbers, carry the day against the elite. He does say: "Sufficiently widely held insight can defeat evolutionary forces" (p. 5), implying that the elites will tend to triumph even without insight (through "evolutionary forces"), while other classes can get the upper hand only through *insight*.
Thompson considers that "the developed nations should commit themselves to allowing third-world countries to set their own economic policies without the interference of international economic agencies" (p. 5). But, so far as I know, the only "interference" comes when the international economic agencies set terms on which they are willing to extend loans to third-world countries. The countries can easily set their own policies by not seeking loans from international economic agencies.
Thompson concludes that allowing third-world countries to set their own economic policies would "represent a restoration of competition of independent states for people, a competition that has been recently destroyed by the end of the Cold War through a predictable escalation in the policy dependence of third-world countries on the IMF" (p. 5). An incomprehensible jumble!
But the rest of the talk was quite original and interesting.

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