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So I think the concept here is that nations are in competition with each other to attract businesses by undercutting each other on "price" (i.e. tax rates). If
by rcthompson 14y ago
So I think the concept here is that nations are in competition with each other to attract businesses by undercutting each other on "price" (i.e. tax rates). If true, does this mean that corporations, as the buyers in this "market", are beginning to dictate prices?
I can see how some science fiction writers (Neal Stephenson comes to mind) have extrapolated this trend to futures where corporations supplant nations and governments as the dominant political entity.
- sageikosa 14y agoTo an extent, this happens withing larger nations and federated economic blocks such as the United States and the EU. Businesses that have mobility will move to where they have more favorable conditions. Automobile manufacturing in the US has been shifting southward (mainly to lower labor costs), companies incorporate in tax-favorable states such as Delaware and Nevada, insurance companies operate as an entirely different entity in the state of New York to avoid encumbering the rest of their business with New York's insurance regulations.
- rcthompson 14y agoYes, that certainly occurs, but then the question becomes whether this increased choice for companies due to globalization makes it a buyer's market, forcing the sellers (states and countries) to lower their prices (corporate taxes and such) to the point of eventually going bankrupt, leaving the corporations a the dominant organizing force of civilization as some sci-fi authors have predicted. (Obviously this would take probably hundreds of years to happen in reality, on contrast to the sci-fi stories which are frequently "near-future".)