Source Analysis

In Stiglitz's essay "Rent Seeking And The Making of An Unequal Society", Stiglitz quotes the work of Adam Smith and Smith's book The Wealth of Nations to emphasize how pacemakers fail in their duties. Stiglitz introduces the idea suggested by Adam Smith: the presence of an "invisible hand" will help direct resources optimally and there is no need for a government (or pacemaker) to facilitate the economy. Stiglitz says,"Adam Smith, the father of modern economics, argued that the private pursuit of self-interest would lead, as if by an invisible hand, to the well-being of all"(Stiglitz 397).Essentially this establishes the idea that market forces dictate resource allocation, and Stglitz argues that government intervention and Intellectual Property impedes the progress of society and contributes to the increasing wealth gap. By appealing to logos and pathos, Stiglitz asserts that the government is not upholding is duties as a protector of the people and says government itself is biased (because of lobbyists and their own political agenda). By failing to prevent the higher classes from extorting wealth from the lower classes, pacemakers are not living up to their responsibilities., Reference to the increasing wealth gap helps strengthen his claim, and by including a logical argument to support ideas of the "invisible hand" (such as auctions, where the person who needs the item most pays the most) helps guide resources to their best destination. I would like to research the work of Adam Smith in my research project, but more importantly I would like to create an argument as to why Intellectual Property is necessary in certain instances. I intend to relate IP to Pharmaceutical Industry to essentially state that IP creates a market for drugs to be sold . . .if companies cannot make a profit they would not invest millions of dollars in Research and Development (R&D).
Smith, Adam, and D. D. Raphael. The Wealth of Nations. New York: Knopf, 1991. Print.