Race to the Bottom

Dear Dr. Wolff: I have heard you use the term 'race to the bottom' when referring to the relocation or offshoring of labour by corporations, typically originating in North America, western Europe and Japan, to much cheaper labour markets in the interest of maximizing profits. If I understand you correctly, the ability of these corporations to do so will drive countries to undercut one another with decreasing standards of labour, simultaneously eroding the purchasing power of the wage earners to support the very same corporations. A self-destructive cycle. I have also heard you speak of enclaves of the labour movement, such as in France, which are still highly organized and have maintained high labour standards, or here in Canada where unions, while steadily weakening, still wield some influence over politicians. With that said, my question is: is the 'race to the bottom' a result of a failure of labour to effectively organize beyond national borders on pace with growth of transnational corporations? Was there ever a possible equilibrium between business and labour after we'd 'hit the bottom', whereby the capitalist system might have survived, in your estimation? Thank you for your continued insights, Dr. Wolff. Please come to Alberta! I think there are a lot of people still looking for answers in the wake of the collapsed oil economy.

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  • Taggart Wilson
    published this page in Ask Prof. Wolff 2016-08-23 00:34:38 -0400