The Price of Inequality
By Joseph E. Stiglitz
http://books.wwnorton.com/books/detail.aspx?id=4294967848
The term “rent” was originally used to describe the returns to land, since the owner of the land receives these payments by virtue of his ownership and not because of anything he does. This stands in contrast to the situation of workers, for example, whose wages are compensation for the effort they provide. The term “rent” then was extended to include monopoly profits, or monopoly rents, the income that one receives simply from the control of a monopoly. Eventually the term was expanded still further to include the returns on similar ownership claims.
Not all rent seeking uses government to extract money from ordinary citizens. The private sector can excel on its own, extracting rents from the public, for instance, through monopolistic practices and exploiting those who are less informed and educated, exemplified by the banks’ predatory lending. CEOs can use their control of the corporation to garner for themselves a larger fraction of the firms’ revenues. Here, though, the government too plays a role, by not doing what it should: by not stopping these activities, by not making them illegal, or by not enforcing laws that exist.
Comment by Don McCanne of PNHP: The pharmaceutical industry has run amok, and we are all suffering as a result. We are paying higher taxes and higher insurance premiums to create “rents” for the likes of Martin Shkreli. (You’ll understand what this means if you simply read the excerpts above.)
We should all be outraged, not only with the barons in the pharmaceutical industry, but even more with our own government, which, as Joseph Stiglitz tells us, is “not doing what it should.”
One of our candidates for president says that he “can't do it alone. We have got to do it together through a strong grassroots movement. We have got to think big.”
Start thinking big.
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