Those who control the information in today's information economy also have more power, said Professor Joseph Stiglitz, University Professor at Columbia University and also a fellow at the Stellenbosch Institute for Advanced Study (STIAS), on Tuesday (14 November 2017).

Stiglitz, the recipient of the Nobel Memorial Prize in Economic Sciences in 2001, was the speaker at a public STIAS lecture at the Wallenberg Centre in Stellenbosch.

He spoke about information economics and said it had a transformative effect on economics and economic policy.

“Information economics provided explanations of phenomena that previously had been unexplained and upset longstanding presumptions, including that of market efficiency."

“It showed that markets are not always competitive and this lack of competition is due to a lack of information."

Stiglitz pointed out that the move towards an information economy has also given market power to those who dominate the grabbing of information.

“We are moving towards a world in which a few firms have a disproportionate amount of information and therefore a disproportionate market power."

In this regard, he referred to companies such as Amazon, Facebook and Google.

“Platforms such as Amazon, Google, Facebook or Apple can gather information and used it to engage in discriminatory pricing."

“They control the information."

Stiglitz said that information may be the really scarce commodity today.

He called attention to a new set of information problems linked to privacy, transparency, and disinformation that may pose a great threat to the functioning of the economy and democracy.

Stiglitz called for a new regulatory framework to deal with this.

• Photo: Prof Joseph Stiglitz speaking at the STIAS lecture.
  
• Photographer: Anton Jordaan