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Revision as of 17:59, 23 August 2005

I can't for the life of me think of a single good thing to say about a race to the bottom. Someone else should try to dig up a few balancing statements here, like saying that global trade was never rules-based to begin with, or that the elites in each country benefit from complex regulations and from protectionism.

But are those arguments in favor of a race to the bottom, or in favor of a WTO? Another way to see it is that protectionism is just another race to the bottom.

Pejorative idioms like this one are kind of hard to explain without sounding as if you agree with their application in every case. Especially if almost everyone does agree that the phenomenon exists, is bad, and ought to be stopped.

I've removed this paragraph from the text, until someone is able to explain or rewrite it:

Global money laundering, terror finance, tax evasion and drug dealing also tend to gravitate to jurisdictions where local laws permit them to thrive.

While it is possible that such "gravitation" may be associated with races to the bottom, this text makes no attempt to demonstrate or explain why regimes would compete for these activities. Maybe states with no other sources of finance may find some of these industries to be better than nothing.

-- pde 02:24, 15 Dec 2003 (UTC)

"The positive argument for free trade rests on the economic theory of comparative advantage, which in turn depends on the necessary condition of "capital immobility." If financial (or labor) resources can move between countries, then the comparative advantage theory erodes, and absolute advantage dominates. Given the liberalization of capital flows under free trade agreements of the 1990s, the necessary condition of capital immobility no longer holds. As a consequence, the economic theory of comparative advantage no longer supports free trade theory. Because labor is fairly immobile, financial capital is moved across international borders seeking the least cost labor. Because a huge pool of labor exists in the world, this process is often cited as another example of the race to the bottom."

This doesn't make sense to me. Cooperative advantage is about the relative efficiencies in making certain products, labor plays a part in that but only one part. Labor and financial mobility might destroy some cooperative advantages but not all.

• I agree that the paragraph doesn't make sense. The principle of comparative advantage works on all levels: from the level of monolithic Gosplan-type economies that trade with each other, to the level of an individual person in a global labour market. There will always be comparative advantages at the individual level, regardless of how easy it is to move capital across national borders. I suggest that the whole paragraph is removed. I will remove it myself unless someone can rephrase it into something that makes sense...

--Shastra 17:59, 23 August 2005 (UTC)

Minor POV problem

The following has NPOV problems and needs to be backed up and reworded to conform to NPOV:

Mainstream economists argue that strict environmental and labor rules hurt the economy, with developing countries bearing the brunt of the adverse effects. There is solid economic theory behind this argument.

"Mainstream economists argue..." implies all mainstream economists which should be backed up if it is to remain in it's current form. Also the use of the term mainstream, a debatable classification in this case seems problematic. Also the part about solid economic theory needs to clarify who says it is solid since certainly not everyone accepts this as fact. --Cab88 16:28, 19 May 2005 (UTC)