The Organization of Industry collects essays written over two decades—pieces prepared especially for this volume, previously unpublished material, and reprinted articles drawn from numerous sources, many which include additional commentary by the author. The essays are unified by George J. Stigler's careful analysis and by his clear and witty style.
In part one, Stigler examines the nature of competition and monopoly. In part two he discusses the forces that determine the size structure of industry, including barriers to entry, economics of scale, and mergers. Part three contains articles on a wide range of topics, such as profitability, delivered price systems, block booking, the economics of information, and the kinky oligopoly demand curve and rigid price. Part four offers a discussion of antitrust policy and includes Stigler's recommendations for future policy as well as an examination of the effects of past policies.
"Stigler's writings might well be subtitled 'The Joys of Doing Economics.' He, more than any other contemporary American economist, dispels the gloom surrounding economic theory. It is impossible to confront the subject treated with such humor and verve and come away still believing that economics is the dismal science."—Shirley B. Johnson, American Scholar
George Joseph Stigler (January 17, 1911 – December 1, 1991) was a U.S. economist. He won the Nobel Memorial Prize in Economic Sciences in 1982, and was a key leader of the Chicago School of Economics, along with his close friend Milton Friedman.
Stigler is best known for developing the Economic Theory of Regulation, also known as capture, which says that interest groups and other political participants will use the regulatory and coercive powers of government to shape laws and regulations in a way that is beneficial to them. This theory is a component of the public choice field of economics. He also carried out extensive research in the history of economic thought.
Stigler's most important contribution to economics was disseminated in his landmark article titled "The Economics of Information". According to Friedman, Stigler "essentially created a new area of study for economists." In this article, Stigler stressed the importance of information by writing, "One should hardly have to tell academicians that information is a valuable resource: knowledge is power. And yet it occupies a slum dwelling in the town of economics."
His 1962 article "Information in the Labor Market" developed the theory of search unemployment.
He was known for his sharp sense of humor, and wrote a number of spoof essays. In his book The Intellectual and the Marketplace, for instance, he proposed Stigler's Law of Demand and Supply Elasticities, that "all demand curves are inelastic and all supply curves are inelastic too." The essay referenced studies that found many goods and services to be inelastic over the long run, as well as offering a supposed theoretical proof; he ended by announcing that his next essay would demonstrate that the price system does not exist. Another essay, on "Truth in Teaching," described the consequences of a (fictional) set of court decisions that held universities legally responsible for the consequences of teaching errors.