The Price Of Inequality Summary

Joseph E. Stiglitz defines inequality as “disparities in equalities, in fairness, and in justice that create huge unmet needs, weakened safety nets, lowered political and economic efficiency, disenfranchisement and imperiled democracy.” Stiglitz uses the novel The Price of Inequality as a platform to educate many Americans into the in’s and out’s of inequality and all that it entails.

While Stiglitz discusses various components of inequality, he makes sure to point out early on in the novel that inequality is nowhere near new in the United States. In chapter two Stiglitz discusses the history of inequality and how power for a long time was linked to religion and the divine right. And while relating religion and power, and thus dividing American

Stiglitz defines rent seeking as “getting income not as a reward to creating wealth but by grabbing a larger share of the wealth that would otherwise have been produced without their effort” (Page 40). Rent seeking continues to help the upper class at the expense at the rest of America, and takes many different forms. One example of rent seeking discussed by Stiglitz has to deal with counties that have an abundance of natural resources. This wealth of natural resources could greatly benefit the lower class, but “the countries with the greatest inequality are those with the most natural resources” (Page 49). An additional example of rent seeking discussed by Stiglitz has to deal with noncompetitive procurement. Stiglitz describes this form as rent seeking as companies or organizations that sell products to the American government at prices well above the marker value (Page 50). Two groups that excel at this form of rent seeking are military contractors and drug companies. Stiglitz goes on to describe various other examples and forms of rent seeking and how they contribute to the inequality in this country, but acknowledges that trying to list and describe each one would take an entire other

Based on the history of inequality in this country, it doesn’t appear that it will stop growing anytime soon, and as a result, the price that Americans pay will continue to grow as well. The middle and lower economic classes will pay the highest price, but contrary to popular belief, the upper class will soon begin to suffer as well. “Widely unequal societies do not function efficiently, and their economics are neither stable more sustainable in the long term” (Page 104). An example of this is an interest group holding too much power, and in return getting policies passed that benefit itself instead of the society as a whole. The upper class cannot continue to succeed and make money if they do not have a functioning society beneath