Today, I have taken thoughts on income inequality from The Price of Inequality: How today’s divided society endangers our future , a book authored by Professor Joseph Stiglitz, for the quotes of the day.
♦ Inequality didn’t just happen; it was created by ‘rent seekers’. Much of the inequality that exists today is a result of government policy, both what the government does and what it doesn’t do.
A monopolist takes money from others by overcharging, destroying value or reducing quality and restricting the competitive product. For example Microsoft, Google, Facebook or any restricted chemical, ammunition and the products like Coca-Cola, Pepsi are being marketed under a monopoly market. Monopolists are the rent seekers as defined by the author. Bankers are rent seekers too because they don’t create money, they just get it from customers. They don’t have ‘solution’ for the ‘financial crisis’ that have been faced by the world since 2008
♦In the financial crises workers and small business bear the brunt of the cost. Managements are given enormous discretion to run corporation for their own benefit in the name of employment creation and investment opportunities.
What lesson is learnt here is firms pride themselves on their ruthlessness-cutting out so many jobs. According to the author there is very less chance of ‘welfare state’ as globalization has been discontented. Profit is the sole motto of private investment.
♦Inequality is an enemy which destruct the nation that is more harmful and expensive than a terrorist attack.
Basically this book highlights most of the example and data of income inequality of American society, According to author-
♦The promise of the US as the land of opportunity has been shattered by the modern notorious tyrants, who make up the 1%, while sections of the 99% across the globe are beginning to vent their rage.
Note that, the most popular measure of income inequality is Gini coefficient, which was developed by Corrodo Gini in 1912. More equal societies have Gini coefficients of .3 or below and most unequal societies have Gini coefficient of .5 or above. America had Gini coefficient of .47 in 2012 when this book was written. Gini coefficients derived from the Lorenz curve framework.