George Stigler - Theory Quotes

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Early in my professional life, I found that many areas of economics attracted me. I started working and publishing in price theory by 1938. In 1946, I published an early work on linear programming (The Cost of Subsistence) which solved the problem only approximately; George Dantzig soon presented the exact solution. In the 1940s, I began empirical work on price theory, starting with a test of the kinked oligopoly demand curve theory of rigid prices.

George Stigler
The state —the machinery and power of the state— is a potential resource or threat to every industry in the society. With its power to prohibit or compel, to take or give money, the state can and does selectively help or hurt a vast number of industries. That political juggernaut, the petroleum industry, is an immense consumer of political benefits, and simultaneously the underwriters of marine insurance have their more modest repast. The central tasks of the theory of economic regulation are to explain who will receive the benefits or burdens of regulation, what form regulation will take, and the effects of regulation upon the allocation of resources.

George Stigler
Regulation may be actively sought by an industry, or it may be thrust upon it. A central thesis of this paper is that, as a rule, regulation is acquired by the industry and is designed and operated primarily for its benefit. There are regulations whose net effects upon the regulated industry are undeniably onerous; a simple example is the differentially heavy taxation of the industry's product (whiskey, playing cards). These onerous regulations, however, are exceptional and can be explained by the same theory that explains beneficial (we may call it "acquired") regulation.

George Stigler