Rent Seeking Home

Picture this; one day you are driving through a nice neighborhood, filled mainly with middle-class families. Every day you drive through this neighborhood and notice how it is changing from day to day. The first day it was a clean neighborhood, manicured lawns, friendly people waving hello, and maintained homes. Soon this neighborhood shifts, there are more homes for sale or foreclosed, this once pristine neighborhood has turned into abandoned homes, overgrown lawns, and fewer and fewer people. This is what happened over time during The Great Recession; while the middle and lower class fought to keep their homes, the upper class had money and needn’t worry much about the recession. This is just an example of what happened to many families …show more content…
Summing up this chapter is essentially government policy influences the market, which is then controlled by the large companies through many avenues. America’s policies are set up to give the top percentage near absolute power; In other terms the top percentage of the country use policy and various forms of business to control and gain more wealth. Two of the ways is monopolizing and rent seeking. According to Heuto (2011) rent seeking “is the allocation of resources by people or organizations in the pursuit of rents created by the government” (p. ##). Although these are key factors that cause the growth of income inequality, they are not the only influences on it. Because of these policies corporations tend to make the markets work in their favor, thus creating the expanding inequality. Corporations use competitive pricing to remove any competition from the field and then being able to control the prices of products and services. According to Stiglitz (2013), “Rent seeking encompasses hidden and open government transfers and subsidies, laws making the marketplace less competitive, statutes allowing corporations to pass costs on to the rest of society, selling government products at or above market prices, predatory lending, and monopoly rent” (p. ##). To control their monopoly company’s use patents, …show more content…
Some ideas in chapter three he talks about are the supply and demand of the market, government role, globalization, financial liberalization, trade, globalization, societal changes, corporate governance, economic discrimination, and government redistribution. When supply is high and demand is low, the wages and employment of workers are affected. For example, in the last twenty-five years, technological advances in computerization enabled machines to replace routine jobs, leading to higher unemployment (Stiglitz, 2013, p. ##). Globalization and trade globalization gives power and political rights to the companies, due to the lack of regulation, where if the workers are vocal about wanting fair wages, the owners can legally keep wages low. Since these companies have such freedom to come and go, if they do not like the workers not accepting their working conditions or low wages, they can freely move jobs out of the United States. With his ability to move jobs out, companies hold a much greater bargaining chip in regards to taxation and government implementation of laws and regulations, and even over the workers themselves. Discrimination also plays a large role in the inequities especially for women and those in the minority group; in this chapter he talks about how the disparity may be due to the education background, but states it is largely