If things are better than before after step 4 you still have damped oscillation. I think the distillation of your hypothesis is this: labor (and environmental e

If things are better than before after step 4 you still have damped oscillation. I think the distillation of your hypothesis is this: labor (and environmental externality) markets change slowly enough relative to the amortization schedule of a factory that perpetual arbitrage between them is possible. To the extent that this is true, one cause is that governments (with the notable exception of China) handicap themselves by honoring agreements, which they absolutely do not have to do absent a bigger, badder government to make them. A savvy, Machiavellian US government policy would: 1. Promise corporations the world 2. When factories are built, expensive machinery shipped in, and personnel trained, renege and hike taxes, but not so much as to force a write-off 3. When foreign governments make it difficult for US corporations to operate factories abroad and they ask for diplomatic support, shrug and tell them play stupid games, win stupid prizes 4. Do not apply the above policy for US corporations doing natural resource extraction abroad. (i.e. act more like China)