Summary Of Economic Inequality By Joseph Stiglitz

Decent Essays
In his article, Joseph Stiglitz discusses economic inequality (the vast distinction in various measures of economic well-being among individuals) as an effect of economic practices aimed at wealth creation and circles causes, effects and solutions toward government policies. He however, highlights the concept of rent seeking which is explained as when people take advantage of their power and resources to build a business niche, monopolize industries and make economic progress at the expense of others; in their quest to create and maintain monopolies, businesses result to ‘rough’ tactics, primarily rent seeking, to keep up. Tim Wu draws away from the general perspective presented by Stiglitz and illustrates Apple, Google, Facebook and other …show more content…
Producers constantly, channel their efforts into securing contracts and inculcating practices which would give them territorial advantages over their coequals in business. Wu elaborates this, as he describes the formation of Apple, which constituted two geniuses, an inventor and a businessman. Steve Wozniak the genius and brain behind the product that ‘made Apple Apple’ engineered his model such that it was readily re-customizable for the public. Apple II consumers could literally open their computers and re-spec them and even though Apple’s devices were smaller than those of their predecessors then, IBM, the customizability factor is what gave them the edge in the market. When Steve Jobs, the business genius, took over, he produced the Macintosh which was supposedly the epitome of perfection in the computer world. This was so contrary to the original Apple that Wozniak, as Wu shows, denied having a hand in that product; this product started a rigid dictatorship in which Apple Inc. decided which specs to have and what to update. Microsoft capitalized on Apple’s closeness and thrived in the markets because of its relative openness; Microsoft’s windows could be installed on any computer and anyone could produce apps for it. Wu further shows the effect of ‘profit over satisfaction’ as he contrasts …show more content…
Having an economy without rent seeking and monopolies also encourages industrialization as people can freely apply their knowledge to contribute to the progress of the economy. Stiglitz cites the zero game that Microsoft used to shut out Netscape. All along, Microsoft had not seen the necessity to have a holistic web browser until Netscape came. With their advent, Microsoft made their browser available to the public for free and under the competition with a free product, Netscape crumbed. This is again seen when Google charged Apple blocking certain apps on its operating system. Apple deliberately denied applications with potential to compete against their own products. This universality of app stores is probably one of the reasons why Google’s android continues to pose a market threat to Android. Google’s android provides a wide variety of apps which also encouragers local developers to make a lot of input. The point here is that without rent seeking and monopolies, more entrees are allowed into the economy and this means progress for the

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