Quote of the Week

But often rent seeking involves a real waste of resources that lowers the country’s productivity and well-being. It distorts resource allocations and makes the economy weaker. A byproduct of efforts directed toward getting a larger share of the pie is shrinkage of the pie.

— Joseph E. Stiglitz, The Price of Inequality: How Today’s Divided Society Endangers Our Future (New York: Norton, 2012), p. 95.

Of course, it works both ways. Many programs that aim to increase the share of the pie accruing to labor will shrink the total size. But, I doubt that’s what Stiglitz had in mind.

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