6 ms·

Race to the bottom (i.e. competition) is a good thing, it reduces waste and inefficiency.

by mrmffh 10y ago

jacquesm 10y ago
In lala-economic-theory-land yes. But this is not companies competing for the favors of customers. This is nation states competing for the favors of companies and that is a totally different matter. In the real world you need taxes to operate a country and with big business being able to relocate their capital and their profits at a moments notice corporations have a substantial advantage over nation states (which are by definition somewhat immobile). So the 'inefficiency' that you seek to eliminate is the oil required to keep the machine running. Note that a company couldn't care less if your country roads fall into disrepair, healthcare sucks and education starts to fall behind. It won't show up in the quarterly reports for a long time and by the time it does they can easily move on to another place. Having a very low corporate tax is only possible if your country does not require major infrastructure and that's one of the reasons why most tax havens are either nearly un-inhabitable (Cyprus, Panama) or extremely small (Monaco, Lichtenstein, Vaduz, Luxemburg). Ireland is the exception and it only succeeded there for reasons that the UK will find hard to emulate.
- logicchains 10y ago
  >Having a very low corporate tax is only possible if your country does not require major infrastructure and that's one of the reasons why most tax havens are either nearly un-inhabitable (Cyprus, Panama) or extremely small (Monaco, Lichtenstein, Vaduz, Luxemburg). Infrastructure spending represents an incredibly low percentage of government spending in most countries, see e.g https://www.nationalpriorities.org/budget-basics/federal-budget-101/spending/ https://www.nationalpriorities.org/budget-basics/federal-bud... and http://www.ukpublicspending.co.uk/uk_budget_pie_chart http://www.ukpublicspending.co.uk/uk_budget_pie_chart. >Note that a company couldn't care less if your country roads fall into disrepair, healthcare sucks and education starts to fall behind. East Asian countries like Korea, Taiwan, Singapore and Hong Kong maintain achieve better healthcare and education outcomes than most western countries in spite of lower government spending. While they may have less welfare spending and greater economic inequality, this certainly isn't an impediment to productivity.
- DominikR 10y ago
  > In lala-economic-theory-land yes. But this is not companies competing for the favors of customers. This is nation states competing for the favors of companies and that is a totally different matter. Why is it bad when businesses find that conditions for them constantly get better everywhere? Is there something inherently evil or bad about businesses? This is usually a position hardcore Socalists would take. > In the real world you need taxes to operate a country and with big business being able to relocate their capital and their profits at a moments notice corporations have a substantial advantage over nation states (which are by definition somewhat immobile). No corporation can move its operations and profits within a moments notice. This takes usually years and the absolute majority of businesses do not even have the option to ever do this. The problem of most Western societies is that the top 10% basically pay for 75%+ of everything, the middle class pays an acceptable amount and then theres 30% of free loaders with 29,9% being the ones at the bottom and 0,1% on the top.
  - Devasta 10y ago
    >Why is it bad when businesses find that conditions for them constantly get better everywhere? If those conditions are getting better at the expense of the local populace, then it most certainly can be bad.
  - Joof 10y ago
    The top 10% also have more than 75% of the money, so this makes a lot of sense. They have more than 75% of the money, so I imagine it's a good bit higher than you imagine. How do the freeloaders pay taxes like the rich if they can't afford life circumstances that allow them to get educations similar to the rich? Healthy countries need taxes to boost their populace up to an optimal level of health and education. Maximize the people that could potentially become high-value.
  - ionised 10y ago
    Because nations need taxes, not a few rich people or organisations at the top.
collyw 10y ago
Thats why so many big businesses are setting up in undeveloped countries.
Scarblac 10y ago
Countries aren't machines built to serve companies. Whole countries shouldn't be made to become "more efficient" (or poorer) for the sake of companies.
- DominikR 10y ago
  Countries are there to work in the interest of it's population and business owners are a part of any free and democratic society. If you don't have a mechanism of business owners and private enterprise that are determined by the vote of the population (via spending money privately on products) then you'll need a state controlled market and I doubt you would like the results. (Venezuela, North Korea, Soviet Union) Just imagine some government committee is deciding on what the national variant of the new iPhone should look like.
keithpeter 10y ago
Back to OA and my UK perspective. You've seen the reaction to the mild austerity (compared to, say, Greece or even Spain) in the Brexit vote. Go too far down the 'race to the bottom' thing and you'll see a lot more reacting. There are political limits and neo-libralism is only one possible perspective, not a natural law.

Race to the bottom (i.e. competition) is a good thing, it reduces waste and inefficiency.

by mrmffh 10y ago

Race to the bottom (i.e. competition) is a good thing, it reduces waste and inefficiency.

In lala-economic-theory-land yes. But this is not companies competing for the favors of customers. This is nation states competing for the favors of companies and that is a totally different matter. In the real world you need taxes to operate a country and with big business being able to relocate their capital and their profits at a moments notice corporations have a substantial advantage over nation states (which are by definition somewhat immobile). So the 'inefficiency' that you seek to eliminate is the oil required to keep the machine running. Note that a company couldn't care less if your country roads fall into disrepair, healthcare sucks and education starts to fall behind. It won't show up in the quarterly reports for a long time and by the time it does they can easily move on to another place. Having a very low corporate tax is only possible if your country does not require major infrastructure and that's one of the reasons why most tax havens are either nearly un-inhabitable (Cyprus, Panama) or extremely small (Monaco, Lichtenstein, Vaduz, Luxemburg). Ireland is the exception and it only succeeded there for reasons that the UK will find hard to emulate.

logicchains 10y ago
>Having a very low corporate tax is only possible if your country does not require major infrastructure and that's one of the reasons why most tax havens are either nearly un-inhabitable (Cyprus, Panama) or extremely small (Monaco, Lichtenstein, Vaduz, Luxemburg). Infrastructure spending represents an incredibly low percentage of government spending in most countries, see e.g https://www.nationalpriorities.org/budget-basics/federal-budget-101/spending/ https://www.nationalpriorities.org/budget-basics/federal-bud... and http://www.ukpublicspending.co.uk/uk_budget_pie_chart http://www.ukpublicspending.co.uk/uk_budget_pie_chart. >Note that a company couldn't care less if your country roads fall into disrepair, healthcare sucks and education starts to fall behind. East Asian countries like Korea, Taiwan, Singapore and Hong Kong maintain achieve better healthcare and education outcomes than most western countries in spite of lower government spending. While they may have less welfare spending and greater economic inequality, this certainly isn't an impediment to productivity.
DominikR 10y ago
> In lala-economic-theory-land yes. But this is not companies competing for the favors of customers. This is nation states competing for the favors of companies and that is a totally different matter. Why is it bad when businesses find that conditions for them constantly get better everywhere? Is there something inherently evil or bad about businesses? This is usually a position hardcore Socalists would take. > In the real world you need taxes to operate a country and with big business being able to relocate their capital and their profits at a moments notice corporations have a substantial advantage over nation states (which are by definition somewhat immobile). No corporation can move its operations and profits within a moments notice. This takes usually years and the absolute majority of businesses do not even have the option to ever do this. The problem of most Western societies is that the top 10% basically pay for 75%+ of everything, the middle class pays an acceptable amount and then theres 30% of free loaders with 29,9% being the ones at the bottom and 0,1% on the top.
- Devasta 10y ago
  >Why is it bad when businesses find that conditions for them constantly get better everywhere? If those conditions are getting better at the expense of the local populace, then it most certainly can be bad.
- Joof 10y ago
  The top 10% also have more than 75% of the money, so this makes a lot of sense. They have more than 75% of the money, so I imagine it's a good bit higher than you imagine. How do the freeloaders pay taxes like the rich if they can't afford life circumstances that allow them to get educations similar to the rich? Healthy countries need taxes to boost their populace up to an optimal level of health and education. Maximize the people that could potentially become high-value.
- ionised 10y ago
  Because nations need taxes, not a few rich people or organisations at the top.

collyw 10y ago

Thats why so many big businesses are setting up in undeveloped countries.

Scarblac 10y ago

Countries aren't machines built to serve companies. Whole countries shouldn't be made to become "more efficient" (or poorer) for the sake of companies.

DominikR 10y ago
Countries are there to work in the interest of it's population and business owners are a part of any free and democratic society. If you don't have a mechanism of business owners and private enterprise that are determined by the vote of the population (via spending money privately on products) then you'll need a state controlled market and I doubt you would like the results. (Venezuela, North Korea, Soviet Union) Just imagine some government committee is deciding on what the national variant of the new iPhone should look like.

keithpeter 10y ago

Back to OA and my UK perspective. You've seen the reaction to the mild austerity (compared to, say, Greece or even Spain) in the Brexit vote. Go too far down the 'race to the bottom' thing and you'll see a lot more reacting. There are political limits and neo-libralism is only one possible perspective, not a natural law.