How Worrisome is the Race to the Bottom Argument?

by Fred Smith on February 24, 2012 · 2 comments

in Odds & Ends

Michael Greve’s recently released, The Upside-Down Constitution, traces the evolution of federalism in of our Constitution. He persuasively documents the transition from competitive federalism (a Constitution that protected the citizenry from exploitation by government at all levels) to today’s cartel federalism (one that empowers governments at all levels to exploit the citizenry).

One of several factors that encouraged this upheaval was the Progressive notion that competition encouraged a “race to the bottom”: relentless pressures to maximize profits would force businesses to employ abusive practices (such as child labor). An interesting argument that we still hear often today. It remains the basis for national and international regulation in fields ranging from global warming to religious freedom to human rights: Economic freedom leads to loss of egalitarian justice; political rules encourage a fairer world. But is it true?

Greve provides data on the extent of child labor in the period 1880 to 1930 (p. 188). In the early Industrial Revolution, child labor constituted 6.4 percent of the work force, a figure that began to fall by the turn of the century, reaching 1.4 percent in 1930. He notes it was not until 1938 (by which time child labor had largely disappeared) that federal regulations were enacted. Rising wealth allowed families to forgo putting their children to work (as did the shift away from agricultural employment) and that wealth also led to some prohibitory state rules.

In a world where states must compete for citizens, values other than profits are advanced. There is no race to the bottom. If anything, there is a race to (not the top; utopian ideals are not the stuff of reality) ever higher rungs on the ladder of human progress.

Eugene Garner February 25, 2012 at 11:18 am

How Worrisome is the Race to the Bottom Argument?

It is obvious that our governemnt is ruled by an oligarchy of banksters and big corporate monopolist through their special interest apparatus. They have caused most of our representatives to fall for the greed and lust for power paradigm thinking that they are part of the elite 0.00001%.

The end game is perpetual debt slavery and tyrannical control of the masses. Our Constitution is (was) our only protection through a LIMITED government enhancing the rights, freedoms and property of the INDIVIDUAL. We must return to the tenets of of our original Constitution. You can’t herd free men!

Ron Paul for president. His moral compass always points to LIBRTY.

Bob Robertson February 27, 2012 at 2:46 pm

I hear that “race to the bottom” often. The people who mindlessly repeat it will brook no argument. They take it on faith that it is correct, and that’s it.

One gentleman, just out of college, told me when I stated economics as the Austrians understand it, “That’s not what I was taught, so it’s wrong.”

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