race to the bottom

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Competition Overdose: How Free Market Mythology Transformed Us From Citizen Kings to Market Servants by Maurice E. Stucke, Ariel Ezrachi

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Why Can’t the Victims De-escalate the Race to the Bottom? We now confront the penultimate missing piece of the puzzle. In situations where the competitors’ individual and collective interests diverge, we can have a race to the bottom that even powerful competitors cannot stop. But in many markets the beneficiaries of competition have a choice. They can stop this toxic competition by opting out. So why don’t they? One problem is that the intended beneficiaries of competition may be trapped in their own arms race. Rather than prevent (or at least slow down) the race to the bottom, they may actually accelerate the downward spiral.

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When it does, it often leaves individuals and society worse off. The invisible hand then becomes nothing more than a sleight of hand. So when is competition a race to the bottom rather than to the top? There are two basic circumstances in which that happens: FIRST, when the competitors’ individual interests are not aligned with their collective interests, or with society’s collective interests. SECOND, when either the competitors or the intended beneficiaries of competition—or both—are harmed by this race to the bottom, but no one can independently de-escalate it. This may sound complex, but once we understand these two conditions, we’ll recognize many examples of toxic competition around us.

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But in one case competition produced results that were toxic to all, in the other, beneficial to all. To distinguish between good and bad competition, between races to the top and races to the bottom, we must ask whether the competitors’ individual and collective interests are aligned. Basically, if all the competitors do the same thing, do they end up collectively better off—or worse? So when you are seeking an edge over a rival, consider what will happen if others follow your lead and take similar measures. If everyone ends up worse off, with no advantage going to anyone, you’re in a race to the bottom that benefits neither you nor society. When Competition Harms Its Intended Beneficiary: Public School Education In our simple scenario of helmetless hockey players, the arms race harms primarily the competitors themselves.

Economic Dignity by Gene Sperling

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Structuring markets to reward competition principally on quality, price, and performance, and not race-to-the-bottom behavior, can lead competitive actors to focus on the elements that deliver better products and services to consumers and other stakeholders, without the concern that treating workers, consumers, and the environment with a level of basic decency might jeopardize their competitive advantage. Of course, rules that encourage high-road competition might impede profit margins compared to existing practices, where there is an open lane toward race-to-the-bottom competition. To the extent a textile manufacturer’s profit margins require forcing workers to labor in extremely dangerous factories or rely on suppliers using ten-year-olds in Vietnam, regulations that limit these practices will reduce the company’s profit margins.

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When our nation had its breakdown of all common sense on housing finance, there was likely little room for a virtuous midlevel employee in 2006 to refuse to engage in such reckless subprime lending, because the market was structured to reward his competitors and peers at his own company for race-to-the-bottom competition. Virtuous employees may have indeed lost promotions, bonuses, and even their jobs. Structuring markets to prevent race-to-the-bottom competition ensures that we do not create business environments where no good deed and virtue go unpunished. PUNCHING STEPHEN CURRY As a thought experiment, imagine a slightly altered set of rules and regulations for the National Basketball Association (NBA).

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Taunting players to waste one of the permitted punches would be refined to an art form. While perhaps this rule would have brought more Ultimate Fighting Championship (UFC) fans to basketball, most true basketball lovers would consider this a vicious race to the bottom. Those most effective in knocking out Curry or James—those who raced to the bottom—would have a serious leg up in pursuit of NBA championships. In this scenario, there would be little room for virtue going unpunished. Members of any given NBA team might find this barbaric and prefer to refrain. Yet such Gandhi-like responses to the punching rule would likely not be well received.

The Raging 2020s: Companies, Countries, People - and the Fight for Our Future by Alec Ross

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“Europe did this to itself,” Schmidt stated, noting that the Europeans themselves created the “race to the bottom” tax treatment for a then-struggling Ireland to stimulate investment there. “The global tax system is incredibly complicated, and we are required to follow the tax rules,” he continued. “When the tax rules change, of course we would adopt them. But there was a presumption that somehow we were doing something wrong here.” Schmidt is correct. For whatever finger wagging may be directed against him and Google, the culpability rests principally with the countries that enable these activities by making them legal in the first place in the race to the bottom. Still, just because something is legal does not make it right.

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The incentives drive companies toward share buybacks instead of investments in workers, equipment, and research and development. The incentives drive businesses to grow bigger through mergers and acquisitions, and then to fire rather than hire. And as we will read, the incentives encourage breaking up unions and sending headquarters to tax-optimized locales instead of to communities that are not in a race to the bottom on taxes. The incentives mean refusing to pay even a cent more for renewable energy than for fossil fuels. The nightmare is that all this optimization for nonproductive uses of capital and for the short term ensures that the long term will be worse for all of us. The inequality and climate crises we are already suffering from are direct consequences of optimizing for the short-term shareholder gains decades ago.

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In the same way that GAAP provide a structure for determining a company’s tax burden, structures could be created that implement a similar set of measures for stakeholder impact and then provide the data to adjust a company’s taxes higher or lower. Companies respond to incentives, so we need to provide incentives for them to stop the race to the bottom on everything from environmental damage to workers’ rights. Former Bank of England governor Mark Carney has suggested that this approach be extended to executive compensation as well, saying that banks should link executive pay to climate risk management. The more a company does to contribute to goals set out in the Paris climate accord, the more its executives get paid.

Mastering the Market Cycle: Getting the Odds on Your Side by Howard Marks

activist fund / activist shareholder / activist investor, Alan Greenspan, Albert Einstein, behavioural economics, business cycle, collateralized debt obligation, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, financial engineering, financial innovation, fixed income, Glass-Steagall Act, if you build it, they will come, income inequality, Isaac Newton, job automation, junk bonds, Long Term Capital Management, low interest rates, margin call, Michael Milken, money market fund, moral hazard, new economy, profit motive, quantitative easing, race to the bottom, Richard Feynman, Richard Thaler, risk tolerance, risk-adjusted returns, risk/return, Robert Shiller, secular stagnation, short selling, South Sea Bubble, stocks for the long run, superstar cities, The Chicago School, The Great Moderation, transaction costs, uptick rule, VA Linux, Y2K, yield curve

Thus an overheated auction in the credit market—as elsewhere—is likely to produce a “winner” who’s really a loser. This is the process I call the race to the bottom. On the other hand, there are times when buyers show up for auctions in small numbers, and the few who do attend are interested in buying only at giveaway prices. The bidding stalls, and the result is low prices, eye-popping yields, and loan structures that afford excellent protection. Unlike the overheated climate that spawns the race to the bottom, ice-cold markets in which no one’s eager to lend can create real winners. The degree of openness of the credit window depends almost entirely on whether providers of capital are eager or reticent, and it has a profound impact on economies, companies, investors, and the prospective return and riskiness of the investment opportunities that result.

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Perhaps most importantly among the contributing factors, the period was marked by risky behavior on the part of financial institutions. When the world is characterized by benign macro events, hyper-financial activity and financial innovation, there is a tendency for providers of capital to compete for market share in a process I call “the race to the bottom” (I’ll make reference later on to a memo of that name). The mood in the years 2005–07 was summed up by Citigroup CEO Charles Prince in June 2007, virtually on the eve of the Global Financial Crisis, in a statement that became emblematic of the era: “When the music stops, in terms of liquidity, things will be complicated.

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This kind of risk tolerance and risk obliviousness plays an essential part in the up-phase that precedes—and sets the scene for—every dramatic down-phase. As the period 2005–07 was rolling along, it presented a great opportunity to observe events that made manifest market participants’ attitudes toward risk, and to reach helpful conclusions. I believe the following excerpt from “The Race to the Bottom,” a memo I wrote on the subject in February 2007—just a few months before the first indication that bad times were coming—provides an excellent example. It demonstrates the potential value of inferences drawn from isolated and perhaps anecdotal experiences: While the last few years have given me many opportunities to marvel at excesses in the capital markets, in this case the one that elicited my battle cry—“that calls for a memo”—hit the newspapers in England during my last stay.

The Finance Curse: How Global Finance Is Making Us All Poorer by Nicholas Shaxson

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‘It is one of the biggest dark continents in economics.’ The answer to the second of my three questions for policymakers then is clear: ‘competition’ between states on corporate taxes is indeed a race to the bottom which increases inequality and harms the world at large. The third question is bigger, in fact it is one of the great economic questions of all time. It is this: whether or not ‘competition’ is a harmful race to the bottom that hurts the world at large, does it make sense for my country or state to ‘compete’ from the perspective of local self-interest? Schreck used to think not, at least for his area, but now he seems less certain.

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When the world finally started to wake up to Tiebout’s paper, the year after his death, it would kick off a debate about one of the most important questions in the modern global economy: what happens when rich people, banks, multinational firms or profits shift across borders in response to different incentives like corporate tax cuts, financial deregulation and so on? This debate goes to the heart of questions around what has been called the competitiveness of nations, and whether competing on things like corporate tax cuts or environmental standards is a good thing or an unhealthy race to the bottom. In the end, Tiebout’s ideas would end up magnified, then distorted and used as ideological underpinning for a wide range of policies that generate the finance curse. Which is not what the leftist Charlie Tiebout would have wanted at all. History shows that inequality usually only gets properly upended after large, violent shocks.8 For Tiebout’s generation, it was the Second World War that provided the shock.

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Rather than demonstrating how governments could ‘compete’ with each other and thus be efficient, as he had once thought, the emerging ‘competition’ between the states was revealing itself to be a powerful tool for big financial and corporate interests to get what they wanted from states and nations by playing them off against each other in a vicious race to the bottom. (For the rest of this book, I will call this latter form ‘competition’ – in inverted commas – as opposed to competition in private markets). In 1973, just four years after Oates published his paper, Idaho’s Democrat governor Cecil Andrus had a meeting with David Packard, the boss of the fast-growing computer company Hewlett-Packard.

Rewriting the Rules of the European Economy: An Agenda for Growth and Shared Prosperity by Joseph E. Stiglitz

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Corporations care about their after-tax return, so they are sensitive not just to wages, the efficiency of labor, the overall business environment, transport costs, and other factors of production, but also to the taxes they have to pay. In the very short run, the one variable countries can change to attract businesses is the corporate income tax rate. Economists predicted that this would result in a race to the bottom, as companies could produce in a low-tax jurisdiction but enjoy access to the entire European Union and its markets. We see evidence of this race to the bottom. Between 1995 and 2018, the average corporate income tax rates for the EU went down from 35 percent to 22 percent.9 This trend can be expected to continue as France, Greece, the Netherlands, and Sweden have already announced further reductions of corporate income tax rates.10 By offering lower tax rates, countries gain jobs and some tax revenues, perhaps less than at higher tax rates, but the increased tax base, they hope, more than compensates.

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Before that, the main voices heard were those of the bankers themselves, who had argued that loosening regulations would create a more dynamic financial system, which would contribute to a stronger European economy from which all would benefit. Besides, the bankers argued, there was a global marketplace into which they, their profits, and their jobs would disperse unless there was deregulation. Indeed, around the world, there was a race to the bottom as countries competed to attract the attention of footloose bankers. As neoliberals talked about the supposed growth and employment benefits of deregulation, they neglected the costs—both the macroeconomic risks that might arise from a poorly regulated financial sector that is engaged in excessive risk taking, and the microeconomic costs arising from the financial sector’s exploitation of its market power and consumer and investor ignorance.

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With all that money to invest on behalf of savers, European asset managers—out to prove themselves better than their competitors in the easy, short-term metric of returns without adequate regard to risk—were only too happy to buy all manner of securities issued by banks. The credit rating agencies played a critical role in this scam, as they gave AAA ratings to securities that did not deserve them, engaging in massive fraud in a race to the bottom with other rating agencies. Wholesale funding (versus the retail approach of wooing depositors) exploded in Europe even more than in the United States. In 2008, it amounted to 60 percent of total funding for the largest 16 banks in Europe. This was twice as high as for large US banks.9 Banks also saw an opportunity to increase their activities as so-called market makers, by holding inventories of securities, standing ready to buy and sell and making a profit from the buy-sell spreads.

The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay by Emmanuel Saez, Gabriel Zucman

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The breaks that tax havens offer to big companies impose a cost on the rest of us, a “negative externality” in economics lingo. They feed a race to the bottom, leading to a world where, to prevent capital from moving abroad, most nations are compelled to adopt tax rates that are too low—lower than the rates they would otherwise democratically choose. The fundamental problem behind the current forms of international coordination is that they do not tackle, and in fact legitimize, the undemocratic forces of tax competition. And indeed, tax competition has intensified since the start of the BEPS process, and the global race to the bottom in corporate tax rates has accelerated. Since 2013, Japan cut its rate from 40% to 31%; the United States from 35% to 21%; Italy from 31% to 24%; Hungary from 19% to 9%; a number of Eastern European states are following the same route.

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Their capital is intangible, it can move to Bermuda in a nanosecond. Other countries have low tax rates? We must have low rates. Other countries are giving up on taxing multinational companies and high earners? We must give up too. Tax coordination among countries is a utopia and the only future is a race to the bottom. No matter how sincerely held they may be, no matter how widely shared, these beliefs are incorrect. Instead of engaging in a giant fiscal free-for-all, we can coordinate our policies, as we’ve successfully done in many other areas of international relations. Rest assured, we know that some countries and social groups derive large benefits from globalization in its current form—but other forms are possible.

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We will study, in the pages that follow, the arithmetic of tax competition and the central role it has played in the prosperity of a few. But we’ll also see how a handful of countries acting together could whistle the end of this game. We will see how defensive measures could be taken against tax havens, and how today’s race to the bottom can be replaced by a race to the top. The notion that external or technical constraints—“international competition,” “tax avoidance,” “loopholes”—make tax justice idle fantasy does not withstand scrutiny. When it comes to the future of taxation, everything is possible. From the disappearance of the income tax—a plausible outcome if the trend of the last four decades is sustained—to levels of progressivity never seen before, there is an infinity of possible futures ahead of us.

Open: The Progressive Case for Free Trade, Immigration, and Global Capital by Kimberly Clausing

"World Economic Forum" Davos, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, active measures, Affordable Care Act / Obamacare, agricultural Revolution, battle of ideas, Bernie Sanders, business climate, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, climate change refugee, corporate social responsibility, creative destruction, currency manipulation / currency intervention, David Ricardo: comparative advantage, Donald Trump, fake news, floating exchange rates, full employment, gig economy, global supply chain, global value chain, guest worker program, illegal immigration, immigration reform, income inequality, index fund, investor state dispute settlement, knowledge worker, labor-force participation, low interest rates, low skilled workers, Lyft, manufacturing employment, Mark Zuckerberg, meta-analysis, offshore financial centre, open economy, Paul Samuelson, precautionary principle, profit motive, purchasing power parity, race to the bottom, Robert Shiller, Ronald Reagan, savings glut, secular stagnation, Silicon Valley, Tax Reform Act of 1986, tech worker, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transfer pricing, uber lyft, winner-take-all economy, working-age population, zero-sum game

For example, if multinational mining companies respond to environmental regulations by forsaking countries with environmental regulations in favor of countries that allow environmentally hazardous production methods, that can lead to a “race to the bottom,” where countries try to outdo one another by lowering regulatory burdens and cutting taxes in hopes of winning businesses’ favor. Evidence suggests that a race to the bottom may be of particular concern in the case of extractive industries such as oil drilling and mining, especially in developing countries. In the past, this race to attract extractive industries has led to excessive resource depletion and toxic pollution, made all the more painful by disappointing gains in job creation and economic growth.21 It is important to note that disparate environmental regulations do not necessarily trigger a race to the bottom.

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In these two areas, current trade agreements strike many as too broad. Yet despite these important examples, there are also ways in which broader agreements may make good sense. For example, if countries are concerned about tax or regulatory competition, international agreements offer a means to avoid a “race to the bottom.” Governments could use agreements to commit to higher standards, reducing global companies’ ability to pit governments against each other. Shunning the Trans-Pacific Partnership In a New York Times poll back in May 2015, 78 percent of respondents said they knew “not much” or “nothing at all” about the Trans-Pacific Partnership (TPP).

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In the past, this race to attract extractive industries has led to excessive resource depletion and toxic pollution, made all the more painful by disappointing gains in job creation and economic growth.21 It is important to note that disparate environmental regulations do not necessarily trigger a race to the bottom. For example, a multinational company that needs to comply with a higher-standard jurisdiction may find it more cost-effective to use one uniform production method throughout its operations. By employing the cleaner production method in lower-standard jurisdictions, it helps to spread cleaner technologies and methods throughout the world. In just this way, higher clean air standards in California caused US automotive companies to improve their environmental performance throughout the entire US market.

Straight Talk on Trade: Ideas for a Sane World Economy by Dani Rodrik

3D printing, airline deregulation, Asian financial crisis, bank run, barriers to entry, behavioural economics, Berlin Wall, Bernie Sanders, blue-collar work, Bretton Woods, BRICs, business cycle, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, carried interest, central bank independence, centre right, collective bargaining, conceptual framework, continuous integration, corporate governance, corporate social responsibility, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Donald Trump, endogenous growth, Eugene Fama: efficient market hypothesis, eurozone crisis, export processing zone, failed state, financial deregulation, financial innovation, financial intermediation, financial repression, floating exchange rates, full employment, future of work, general purpose technology, George Akerlof, global value chain, income inequality, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Jean Tirole, Kenneth Rogoff, low interest rates, low skilled workers, manufacturing employment, market clearing, market fundamentalism, meta-analysis, moral hazard, Nelson Mandela, new economy, offshore financial centre, open borders, open economy, open immigration, Pareto efficiency, postindustrial economy, precautionary principle, price stability, public intellectual, pushing on a string, race to the bottom, randomized controlled trial, regulatory arbitrage, rent control, rent-seeking, Richard Thaler, Robert Gordon, Robert Shiller, Ronald Reagan, Sam Peltzman, Silicon Valley, Solyndra, special economic zone, spectrum auction, Steven Pinker, tacit knowledge, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, Thomas L Friedman, too big to fail, total factor productivity, trade liberalization, transaction costs, Tyler Cowen, unorthodox policies, Washington Consensus, World Values Survey, zero-sum game, éminence grise

In economic models of “monopolistic competition,” producers compete not just on price but on variety—by differentiating their products from others’.32 Similarly, national jurisdictions can compete by offering institutional “services” that are differentiated along the dimensions I discussed earlier. One persistent worry is that institutional competition sets off a race to the bottom. To attract mobile resources—capital, multinational enterprises, and skilled professionals—jurisdictions may lower their standards and relax their regulations in a futile dynamic to outdo other jurisdictions. Once again, this argument overlooks the multidimensional nature of institutional arrangements.

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Similarly, higher labor standards may lead to happier and more productive workers; tougher financial regulation to greater financial stability; and higher taxes to better public services, such as schools, infrastructure, parks, and other amenities. Institutional competition can foster a race to the top. The only area in which some kind of race to the bottom has been documented is corporate taxation. Tax competition has played an important role in the remarkable reduction in corporate taxes around the world since the early 1980s. In a study on OECD countries, researchers found that when other countries reduce their average statutory corporate tax rate by 1 percentage point, the home country follows by reducing its tax rate by 0.7 percentage points.33 The study indicated that international tax competition takes place only among countries that have removed their capital controls.

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When such controls are in place, capital and profits cannot move as easily across national borders and there is no downward pressure on capital taxes. So, the removal of capital controls appears to be a factor in driving the reduction in corporate tax rates. On the other hand, there is scant evidence of similar races to the bottom in labor and environmental standards or in financial regulation. The geographically confined nature of the services (or public goods) offered by national jurisdictions often presents a natural restraint on the drive toward the bottom. If you want to partake of those services, you need to be in that jurisdiction.

Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens by Nicholas Shaxson

Asian financial crisis, asset-backed security, bank run, battle of ideas, Bear Stearns, Bernie Madoff, Big bang: deregulation of the City of London, Bretton Woods, British Empire, business climate, call centre, capital controls, collapse of Lehman Brothers, computerized trading, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, David Ricardo: comparative advantage, Double Irish / Dutch Sandwich, export processing zone, failed state, financial deregulation, financial engineering, financial innovation, Fractional reserve banking, full employment, Glass-Steagall Act, Global Witness, Golden arches theory, high net worth, income inequality, Kenneth Rogoff, laissez-faire capitalism, land reform, land value tax, light touch regulation, Londongrad, Long Term Capital Management, low interest rates, Martin Wolf, Money creation, money market fund, New Journalism, Northern Rock, offshore financial centre, oil shock, old-boy network, out of africa, passive income, plutocrats, Ponzi scheme, race to the bottom, regulatory arbitrage, reserve currency, Ronald Reagan, shareholder value, Suez crisis 1956, The Spirit Level, too big to fail, transfer pricing, vertical integration, Washington Consensus

The end result was that the biggest banks were able to grow large enough to attain “too big to fail” status—which helped them in turn to become increasingly influential in the bastions of political power in Washington, eventually getting a grip on both main political parties, Democrat and Republican—a grip that is so strong that it amounts to political capture. Part of this process has involved a constant race to the bottom between jurisdictions. When a tax haven degrades its taxes or financial regulations or deepens its secrecy facilities to attract hot money from elsewhere, other havens degrade theirs too, to stay in the race. Meanwhile, financiers threaten politicians in the United States and other large economies with the offshore club—“don’t tax or regulate us too heavily or we’ll leave,” they cry—and the onshore politicians quail and relax their own laws and regulations.

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Deregulation, freer flows of capital, and lower taxes since the 1970s—most people think that these globalizing changes have resulted primarily from grand ideological shifts and deliberate policy choices ushered in by such leaders as Margaret Thatcher and Ronald Reagan. Ideology and leaders matter, but few have noticed this other thing: the role of the secrecy jurisdictions in all of this—the silent warriors of globalization that have been acting as berserkers in the global economy, forcing other nations to engage in the competitive race to the bottom, and in the process cutting swaths through the tax systems and regulations of nation states, rich and poor, whether they like it or not. The secrecy jurisdictions have been the heart of the globalization project from the beginning. Finally, a word about culture and attitudes. In January 2008 the accountancy giant KPMG ranked Cyprus at the very top of a league table of European jurisdictions, according to the “attractiveness” of their corporate tax regimes.53 Yet Cyprus, a “way station for international scoundrels,” as one offshore promoter admits, is among the world’s murkiest tax havens: possibly the biggest conduit for criminal money out of the former Soviet Union and the Middle East into the international financial system.

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The notorious “merchant of death” Viktor Bout, inspiration for the character played by Nicholas Cage in the Hollywood film Lord of War, alleged arms runner to the Taliban and other murderous organizations around the globe, operated through businesses in Texas, Delaware, and Florida.27 “US shell companies are attractive vehicles for those seeking to launder money, evade taxes, finance terrorism, or conduct other illicit activity anonymously,” said Republican Senator Norm Coleman, then chairman of the U.S. Senate Permanent Subcommittee on Investigations. “Competition among States to attract company filing revenue and franchise taxes has, in some instances, resulted in a race to the bottom.”28 A New York Times article from 1986 describes the antics of one Delaware lieutenant-general who flew to Taiwan, Hong Kong, China, Indonesia, Singapore, and the Philippines, clutching a pamphlet boasting that Delaware could “Protect You from Politics.”29 The official was, the article noted, “looking forward to a rich harvest of Hong Kong flight capital” after the British pullout in 1997.

Four Battlegrounds by Paul Scharre

2021 United States Capitol attack, 3D printing, active measures, activist lawyer, AI winter, AlphaGo, amateurs talk tactics, professionals talk logistics, artificial general intelligence, ASML, augmented reality, Automated Insights, autonomous vehicles, barriers to entry, Berlin Wall, Big Tech, bitcoin, Black Lives Matter, Boeing 737 MAX, Boris Johnson, Brexit referendum, business continuity plan, business process, carbon footprint, chief data officer, Citizen Lab, clean water, cloud computing, commoditize, computer vision, coronavirus, COVID-19, crisis actor, crowdsourcing, DALL-E, data is not the new oil, data is the new oil, data science, deep learning, deepfake, DeepMind, Demis Hassabis, Deng Xiaoping, digital map, digital rights, disinformation, Donald Trump, drone strike, dual-use technology, Elon Musk, en.wikipedia.org, endowment effect, fake news, Francis Fukuyama: the end of history, future of journalism, future of work, game design, general purpose technology, Geoffrey Hinton, geopolitical risk, George Floyd, global supply chain, GPT-3, Great Leap Forward, hive mind, hustle culture, ImageNet competition, immigration reform, income per capita, interchangeable parts, Internet Archive, Internet of things, iterative process, Jeff Bezos, job automation, Kevin Kelly, Kevin Roose, large language model, lockdown, Mark Zuckerberg, military-industrial complex, move fast and break things, Nate Silver, natural language processing, new economy, Nick Bostrom, one-China policy, Open Library, OpenAI, PalmPilot, Parler "social media", pattern recognition, phenotype, post-truth, purchasing power parity, QAnon, QR code, race to the bottom, RAND corporation, recommendation engine, reshoring, ride hailing / ride sharing, robotic process automation, Rodney Brooks, Rubik’s Cube, self-driving car, Shoshana Zuboff, side project, Silicon Valley, slashdot, smart cities, smart meter, Snapchat, social software, sorting algorithm, South China Sea, sparse data, speech recognition, Steve Bannon, Steven Levy, Stuxnet, supply-chain attack, surveillance capitalism, systems thinking, tech worker, techlash, telemarketer, The Brussels Effect, The Signal and the Noise by Nate Silver, TikTok, trade route, TSMC

Horowitz and Lauren Kahn, “Why DoD’s New Approach to Data and Artificial Intelligence Should Enhance National Defense,” Council on Foreign Relations blog, March 11, 2022, https://www.cfr.org/blog/why-dods-new-approach-data-and-artificial-intelligence-should-enhance-national-defense; Jaspreet Gill, “Say Goodbye to JAIC and DDS, As Offices Cease to Exist As Independent Bodies June 1,” Breaking Defense, May 24, 2022, https://breakingdefense.com/2022/05/say-goodbye-to-jaic-and-dds-as-offices-cease-to-exist-as-independent-bodies-june-1/. 252technical innovation: Ian Goodfellow and Nicolas Papernot, “The Challenge of Verification and Testing of Machine Learning,” cleverhans-blog, June 14, 2017, http://www.cleverhans.io/security/privacy/ml/2017/06/14/verification.html. 253Patriot air and missile defense system: For more on the Patriot fratricides, see Paul Scharre, Army of None: Autonomous Weapons and the Future of War (New York: W. W. Norton, April 24, 2018), 137–145. 31. RACE TO THE BOTTOM 254“race to the bottom”: Portions of this chapter are adapted, with permission, from Paul Scharre, “Debunking the AI Arms Race Theory,” Texas National Security Review 4, no. 3 (Summer 2021): 121–132, http://dx.doi.org/10.26153/tsw/13985. 254“move fast and break things”: Steven Levy, “Mark Zuckerberg on Facebook’s Future, from Virtual Reality to Anonymity,” Wired, April 30, 2014, https://www.wired.com/2014/04/zuckerberg-f8-interview/. 254“We are under so much pressure”: Jack Shanahan, interview by author, April 1, 2020. 254twenty-five years from initial concept: F-35 Joint Strike Fighter (JSF) Program (Congressional Research Service, updated May 27, 2020) https://fas.org/sgp/crs/weapons/RL30563.pdf; The Joint Advanced Strike Technology (JAST) program, which later became the Joint Strike Fighter program, was created in 1993.

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—CHINESE GENERAL SECRETARY XI JINPING CONTENTS LIST OF ILLUSTRATIONS PREFACE INTRODUCTION PART I POWER 1.THE NEW OIL 2.DATA 3.COMPUTE 4.TALENT 5.INSTITUTIONS PART II COMPETITION 6.A WINNING HAND 7.MAVEN 8.REVOLT 9.SPUTNIK MOMENT PART III REPRESSION 10.TERROR 11.SHARP EYES 12.A BETTER WORLD 13.PANOPTICON 14.DYSTOPIA PART IV TRUTH 15.DISINFORMATION 16.SYNTHETIC REALITY 17.TRANSFORMATION 18.BOT WARS PART V RIFT 19.FUSION 20.HARMONY 21.STRANGLEHOLD PART VI REVOLUTION 22.ROBOTICS ROW 23.PROJECT VOLTRON 24.FOUNDATION 25.THE WRONG KIND OF LETHALITY 26.JEDI 27.DISRUPTION PART VII ALCHEMY 28.CONTROL 29.POISON 30.TRUST 31.RACE TO THE BOTTOM PART VIII FIRE 32.ALIEN INTELLIGENCE 33.BATTLEFIELD SINGULARITY 34.RESTRAINT 35.THE FUTURE OF AI CONCLUSION ACKNOWLEDGMENTS ABBREVIATIONS NOTES INDEX LIST OF ILLUSTRATIONS Deep Neural Network U.S. R&D Funding as a Percentage of Gross Domestic Product, 1953–2018 U.S. Share of Global R&D (1960) U.S.

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Systems may work brilliantly in one setting, then fail dramatically if the environment slightly changes. The “black box” nature of many AI methods means that it may be difficult to accurately predict when they will fail or even understand why they failed in retrospect. Potentially even more dangerous, the global competition in AI risks a “race to the bottom” on safety. In a desire to beat others to the punch, countries may cut corners to deploy AI systems before they have been fully tested. We are careening toward a world of AI systems that are powerful but insecure, unreliable, and dangerous. But technology is not destiny, and there are people around the world working to ensure that technological progress arcs toward a brighter future.

The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor, and Why You Can Never Buy a Decent Used Car by Tim Harford

Alan Greenspan, Albert Einstein, barriers to entry, Berlin Wall, business cycle, collective bargaining, congestion charging, Corn Laws, David Ricardo: comparative advantage, decarbonisation, Deng Xiaoping, Fall of the Berlin Wall, George Akerlof, Great Leap Forward, household responsibility system, information asymmetry, invention of movable type, John Nash: game theory, John von Neumann, Kenneth Arrow, Kickstarter, market design, Martin Wolf, moral hazard, new economy, Pearl River Delta, price discrimination, Productivity paradox, race to the bottom, random walk, rent-seeking, Robert Gordon, Robert Shiller, Ronald Reagan, sealed-bid auction, second-price auction, second-price sealed-bid, Shenzhen special economic zone , Shenzhen was a fishing village, special economic zone, spectrum auction, The Market for Lemons, Thomas Malthus, trade liberalization, Vickrey auction

We saw in chapter 4 that the economist’s concept of externalities gives us a powerful tool to appreciate the risks of environmental damage, and externality charges give us a solution. Many—perhaps most—economists understand the risks of environmental damage and want action to preserve the environment. But the link between trade and environmental damage just doesn’t stand up to close scrutiny. There are three reasons for concern. The first concern is of a “race to the bottom”: companies rush overseas to produce goods under cheaper, more lenient environmental laws, while hapless governments oblige them by creating those lenient laws. The second is that physically moving goods around inevitably consumes resources and causes pollution. The third worry is that if trade promotes economic growth, it must also harm the planet.

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The environmentalist Vandana Shiva speaks for many when she declares that “pollution moves from the rich to the poor. The result is a global environmental apartheid.” Strong words—but are they true? In theory, they might be true. Companies that can produce goods more cheaply will be at a competitive advantage. They can also move around more easily in a world of free trade. So the “race to the bottom” is a possibility. Then again, there are reasons to suspect that it’s a fantasy. Environmental regulations are not a major cost; labor is. If American environmental standards are really so strict, why do the most pollution-intensive American firms spend only 2 percent of their revenues on dealing with pollution?

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As an analogy: if ten-year-old computer chips were still produced in bulk, they would be simpler and cheaper to make than modern chips, but nobody bothers any more. It’s now hard to buy an old computer even if you want to. And these arguments leave aside the possibility that firms want to offer high environmental standards to please their workers and their customers. So . . . a “race to the bottom” is possible in theory; but there are also good grounds for doubting its existence. So leaving theory to one side, what are the facts? First, that foreign investment in • 215 • T H E U N D E R C O V E R E C O N O M I S T rich countries is far more likely to go into polluting industries than foreign investment in poor countries.

Everything Bad Is Good for You: How Popular Culture Is Making Us Smarter by Steven Johnson

Columbine, complexity theory, corporate governance, delayed gratification, edge city, Flynn Effect, game design, Golden age of television, Marshall McLuhan, pattern recognition, profit motive, public intellectual, race to the bottom, sexual politics, SimCity, social intelligence, Steve Jobs, the market place

It i s a truth nearly universally acknowledged that pop culture caters to our base instincts; mass society dumbs down and simplifies; it races to the bottom. The rare flowerings of "quality programming" only serve to remind us of the over­ all downward slide. But no matter how many times this re­ frain is belted out, it doesn't get any more accurate. As we've seen, precisely the opposite seems to be happening: the sec­ ular trend is toward greater cognitive demands, more depth , more participation. And if you accept that premise, you ' re forced then to answer the question : Why? For decades, the race to the bottom served as a kind of Third Law of Thermodynamics for mass society : all other things being equal, pop culture will decline into simpler forms.

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Melodrama's good, you know, a little tear here and there, a little morality tale, that's good. Positive. That's least objectionable. It's my job to keep my 32, not to cause any tune-out a priori in terms of ads or concepts, to make sure there's no tune-out in the shows vis-a-vis the competition. LOP is a pure-breed race-to-the-bottom model : you cre­ ate shows designed on the scale of minutes and seconds, with the fear that the slightest challenge-"thought, " say, or "education"-will send the audience scurrying to the other networks. Contrast LOP with the model followed by The Sopranos-what you might call the Most Repeatable Pro- 162 ST E V E N J O H N SO N gramming model.

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It's cruci al that we abandon the Brave New World scenario where mindless amusement always wins out over more chal­ lenging fare , that we do away once and for all with George Wi l l 's vision of an "increasingly infantilized society. " Pop E V E R Y T H I N G B A D I S G O O D F O R Yo u 1 85 culture is not a race to the bottom, and it's high time we accepted-even celebrated-that fact. But even the most salutary social development comes with peripheral effects that are less desirable. The rise of the Internet has forestalled the death of the typographic universe-and its replacement by the society of the image-predicted by McLuhan and Postman.

Model Thinker: What You Need to Know to Make Data Work for You by Scott E. Page

Airbnb, Albert Einstein, Alfred Russel Wallace, algorithmic trading, Alvin Roth, assortative mating, behavioural economics, Bernie Madoff, bitcoin, Black Swan, blockchain, business cycle, Capital in the Twenty-First Century by Thomas Piketty, Checklist Manifesto, computer age, corporate governance, correlation does not imply causation, cuban missile crisis, data science, deep learning, deliberate practice, discrete time, distributed ledger, Easter island, en.wikipedia.org, Estimating the Reproducibility of Psychological Science, Everything should be made as simple as possible, experimental economics, first-price auction, Flash crash, Ford Model T, Geoffrey West, Santa Fe Institute, germ theory of disease, Gini coefficient, Higgs boson, High speed trading, impulse control, income inequality, Isaac Newton, John von Neumann, Kenneth Rogoff, knowledge economy, knowledge worker, Long Term Capital Management, loss aversion, low skilled workers, Mark Zuckerberg, market design, meta-analysis, money market fund, multi-armed bandit, Nash equilibrium, natural language processing, Network effects, opioid epidemic / opioid crisis, p-value, Pareto efficiency, pattern recognition, Paul Erdős, Paul Samuelson, phenotype, Phillips curve, power law, pre–internet, prisoner's dilemma, race to the bottom, random walk, randomized controlled trial, Richard Feynman, Richard Thaler, Robert Solow, school choice, scientific management, sealed-bid auction, second-price auction, selection bias, six sigma, social graph, spectrum auction, statistical model, Stephen Hawking, Supply of New York City Cabdrivers, systems thinking, tacit knowledge, The Bell Curve by Richard Herrnstein and Charles Murray, The Great Moderation, the long tail, The Rise and Fall of American Growth, the rule of 72, the scientific method, The Spirit Level, the strength of weak ties, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, Tragedy of the Commons, urban sprawl, value at risk, web application, winner-take-all economy, zero-sum game

Lyapunov Theorem Given a discrete time dynamical system consisting of the transition rule xt+1 = G(xt), the real-valued function F(xt) is a Lyapunov function if F(xt) ≥ M for all xt and if there exists an A > 0 such that If F is a Lyapunov Function for G, then starting from any x0, there exists a t∗, such that G(xt∗) = xt∗, and the system attains an equilibrium in finite time. We first construct a Lyapunov function within the Race to the Bottom Game, which captures strategic environments in which players choose levels of support such that each player prefers to provide just less than the average level. The Race to the Bottom Game Each of N players proposes a level of support in {0, 1,… 100} in each period. The player closest to of the average level of support wins a prize in that period. The game can be used to explain reductions in state government spending for social programs such as support for the indigent.

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It is straightforward to show that the maximum level of support from any player satisfies the conditions for a Lyapunov function. The maximum level of support has a minimum at zero. And in each period the maximum level of support falls by at least 1 given that levels of support take integer values. Thus, at some point, everyone proposes zero support. The players have raced to the bottom. In this example, the model produces an undesirable result. To prevent a race to the bottom requires changing the game. To increase support for the indigent, a federation could shift to federal funding or impose a floor on spending.2 As an aside, suppose that we allow players to choose any real number in the interval between zero and 100 rather than integer values.

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You will learn to identify when you are allowing ideology to supplant reason and have richer, more layered insights into the implications of policy initiatives, whether they be proposed greenbelts or mandatory drug tests. These benefits will accrue from an engagement with a variety of models—not hundreds, but a few dozen. The models in this book offer a good starting collection. They come from multiple disciplines and include the Prisoners’ Dilemma, the Race to the Bottom, and the SIR model of disease transmission. All of these models share a common form: they assume a set of entities—often people or organizations—and describe how they interact. The models we cover fall into three classes: simplifications of the world, mathematical analogies, and exploratory, artificial constructs.

The Euro: How a Common Currency Threatens the Future of Europe by Joseph E. Stiglitz, Alex Hyde-White

"there is no alternative" (TINA), "World Economic Forum" Davos, Alan Greenspan, bank run, banking crisis, barriers to entry, battle of ideas, behavioural economics, Berlin Wall, Bretton Woods, business cycle, buy and hold, capital controls, carbon tax, Carmen Reinhart, cashless society, central bank independence, centre right, cognitive dissonance, collapse of Lehman Brothers, collective bargaining, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, currency peg, dark matter, David Ricardo: comparative advantage, disintermediation, diversified portfolio, eurozone crisis, Fall of the Berlin Wall, fiat currency, financial innovation, full employment, George Akerlof, Gini coefficient, global supply chain, Great Leap Forward, Growth in a Time of Debt, housing crisis, income inequality, incomplete markets, inflation targeting, information asymmetry, investor state dispute settlement, invisible hand, Kenneth Arrow, Kenneth Rogoff, knowledge economy, light touch regulation, low interest rates, manufacturing employment, market bubble, market friction, market fundamentalism, Martin Wolf, Mexican peso crisis / tequila crisis, money market fund, moral hazard, mortgage debt, neoliberal agenda, new economy, open economy, paradox of thrift, pension reform, pensions crisis, price stability, profit maximization, purchasing power parity, quantitative easing, race to the bottom, risk-adjusted returns, Robert Shiller, Ronald Reagan, Savings and loan crisis, savings glut, secular stagnation, Silicon Valley, sovereign wealth fund, the payments system, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, too big to fail, transaction costs, transfer pricing, trickle-down economics, Washington Consensus, working-age population

But this rigid application of rules, in the absence of common deposit insurance, may make it even riskier for depositors to keep their money in the banks of a weak country: it may exacerbate the problem of divergence. REGULATORY RACES TO THE BOTTOM Europe not only allowed capital to flow freely within its borders but also financial firms and products—no matter how poorly they are regulated at home. The single-market principle for financial institutions and capital, in the absence of adequate EU regulation, led to a regulatory race to the bottom, with at least some of the costs of the failures borne by other jurisdictions. The failure of a financial institution imposes costs on others (evidenced so clearly in the crisis of 2008), and governments will not typically take into account these “cross-border costs.”

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The EU (and this analysis thus goes beyond the eurozone) must adopt two further sets of policies: First, it needs to limit the race to the bottom, the kind of tax competition that worked so well for a few countries like Luxembourg but at the expense of others. This is a real example of an externality—of an action by one country that imposes harms on others. And yet Europe has failed to take adequate action, partially because many in Europe are enamored of the idea of low taxes and a small state, and this kind of race to the bottom suits them fine. Secondly, given the easy mobility around the European Union, the major responsibility for redistribution must lie at the EU level.39 The EU should follow the United States in levying taxes based on citizenship, wherever individuals are domiciled or resident.

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The failure of a financial institution imposes costs on others (evidenced so clearly in the crisis of 2008), and governments will not typically take into account these “cross-border costs.” Indeed, especially before the 2008 global financial crisis, each country faced pressures to reduce regulations. Financial firms threatened that they would leave unless regulations were reduced.14 This regulatory race to the bottom would have existed within Europe even without the euro. Indeed, the winners in the pre-2008 contest were Iceland and the UK, neither of which belong to the eurozone (and Iceland doesn’t even belong to the EU). The UK prided itself on its system of light regulation, which meant essentially self-regulation, an oxymoron.

The Best Way to Rob a Bank Is to Own One: How Corporate Executives and Politicians Looted the S&L Industry by William K. Black

accounting loophole / creative accounting, affirmative action, Alan Greenspan, Andrei Shleifer, Black Monday: stock market crash in 1987, book value, business climate, cognitive dissonance, corporate governance, corporate raider, Donald Trump, fear of failure, financial deregulation, friendly fire, George Akerlof, hiring and firing, junk bonds, margin call, market bubble, Michael Milken, money market fund, moral hazard, offshore financial centre, Ponzi scheme, race to the bottom, Ronald Reagan, Savings and loan crisis, short selling, The Market for Lemons, transaction costs

“COMPETITION IN LAXITY” Economists describing how regulators competed for “customers” by promising to be laxer in supervision coined two of the most telling phrases to come out of the S&L debacle: “competition in laxity” and “race to the bottom.” The novel aspect is that economists endorsed these pejorative terms because the race was toward greater deregulation. In the early 1980s, economists knew that regulation was the problem, so anything that reduced regulation was desirable. Richard Pratt shared this mindset when President Reagan appointed him Bank Board chairman in 1981. FOR THE BANK BOARD, THE RACE TO THE BOTTOM WAS A SHORT ONE The Bank Board was at the bottom of the federal financial regulatory heap before Pratt’s deregulation and desupervision.

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The goodwill mergers and the wave of new entrants that Pratt encouraged diverted critical supervisory resources into (non)resolutions at precisely the time they were desperately needed to counter the wave of control frauds. TEXAS AND CALIFORNIA—THE STATES THAT WON THE RACE TO THE BOTTOM Another term for “competition in laxity” was “the race to the bottom.” S&Ls could change freely from a federal to a state charter (the permission from the government to run an S&L) and still be insured by the FSLIC. The charter determined what the S&L could invest in. Texas led the race by deregulating in the 1970s, and California followed the lead.

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Texas had the equivalent of a “most favored nation” clause in its charters that allowed Texas-chartered S&Ls to do whatever federally chartered ones could, so the rush to convert to federal charters was greatest in California. California responded to the Garn–St Germain Act with the Nolan Act (named after its sponsoring senator, the notably corrupt and soon-to-be-convicted Pat Nolan). The Nolan Act became effective on January 1, 1983. It won the race to the bottom by going directly to the bottom. A California-chartered S&L could invest 100 percent of its assets in anything (with the commissioner’s approval). Despite Nolan’s corruption, this was not a conspiracy, but a bungled mess of epic proportions. No one was clever enough to design this disaster.

No Is Not Enough: Resisting Trump’s Shock Politics and Winning the World We Need by Naomi Klein

"Hurricane Katrina" Superdome, "World Economic Forum" Davos, Airbnb, antiwork, basic income, battle of ideas, Berlin Wall, Bernie Sanders, Black Lives Matter, Brewster Kahle, carbon tax, Carl Icahn, Celebration, Florida, clean water, collective bargaining, Corrections Corporation of America, data science, desegregation, Donald Trump, drone strike, Edward Snowden, Elon Musk, end-to-end encryption, energy transition, extractivism, fake news, financial deregulation, gentrification, Global Witness, greed is good, green transition, high net worth, high-speed rail, Howard Zinn, illegal immigration, impact investing, income inequality, Internet Archive, Kickstarter, late capitalism, Mark Zuckerberg, market bubble, market fundamentalism, mass incarceration, megaproject, Mikhail Gorbachev, military-industrial complex, moral panic, Naomi Klein, Nate Silver, new economy, Occupy movement, ocean acidification, offshore financial centre, oil shale / tar sands, open borders, Paris climate accords, Patri Friedman, Peter Thiel, plutocrats, private military company, profit motive, race to the bottom, Ralph Nader, Ronald Reagan, Saturday Night Live, sexual politics, sharing economy, Silicon Valley, Steve Bannon, subprime mortgage crisis, tech billionaire, too big to fail, trade liberalization, transatlantic slave trade, Triangle Shirtwaist Factory, trickle-down economics, Upton Sinclair, urban decay, W. E. B. Du Bois, women in the workforce, working poor

Rather than hope that Trump is going to magically transform into Bernie Sanders, and choose this one arena in which to be a genuine advocate for anyone who isn’t related to him, we would do far better to ask some tough questions about how it’s been possible for a gang of unapologetic plutocrats, with open disdain for democratic norms, to hijack an issue like corporate free trade in the first place. The Race to the Bottom Trump has made trade deals a signature issue for two reasons. The first, on full display that day at the White House, is that it’s a great way to steal votes from the Democrats. The right-wing pundit Charles Krauthammer—no fan of unions—declared on Fox News that Trump’s cozy union summit was a “great act of political larceny.”

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What Trump’s admiration for Puzder suggests is that his real plan for luring back manufacturing is to suppress rights, wages, and protections to such a degree that working in a factory will be a lot like working at Hardee’s under Andrew Puzder. In other words, it’s yet another plan to take from the vulnerable to benefit the already outrageously rich. What we are witnessing is not a silver lining of any sort. It’s the push to the finish line in the “race to the bottom” that opponents of these corporate trade deals always feared. Yes, It’s Possible to Make Bad Trade Deals Worse Trump is not planning to remove the parts of trade deals that are most damaging to workers—the parts, for instance, that prohibit policies which are designed to favor local, over foreign, production.

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One area of concern was how these deals were leading to devastating job losses, leaving behind rust belts from Detroit to Buenos Aires, while companies such as Ford and Toyota looked for ever-cheaper places to produce. But for the most part, our opposition was not grounded in Trump-style protectionism; it was trying to stem the beginning of what already looked like a race to the bottom, a new world order that was negatively impacting workers and the environment in every country. We were arguing for a model of trade that would start with the imperative to protect people and the planet. That was crucial then—it’s urgent now. The movement was even starting to win. We defeated the proposed Free Trade Area of the Americas.

Consumed: How Markets Corrupt Children, Infantilize Adults, and Swallow Citizens Whole by Benjamin R. Barber

"World Economic Forum" Davos, Abraham Maslow, addicted to oil, AltaVista, American ideology, An Inconvenient Truth, AOL-Time Warner, Berlin Wall, Bertrand Russell: In Praise of Idleness, Bill Gates: Altair 8800, bread and circuses, business cycle, Celebration, Florida, collective bargaining, creative destruction, David Brooks, delayed gratification, digital divide, do well by doing good, Donald Trump, double entry bookkeeping, Dr. Strangelove, G4S, game design, George Gilder, Gordon Gekko, greed is good, Herbert Marcuse, Hernando de Soto, illegal immigration, informal economy, invisible hand, John Perry Barlow, Joseph Schumpeter, laissez-faire capitalism, late capitalism, liberal capitalism, Marc Andreessen, McJob, microcredit, Naomi Klein, new economy, New Journalism, Norbert Wiener, nuclear winter, Panopticon Jeremy Bentham, Paradox of Choice, pattern recognition, presumed consent, profit motive, race to the bottom, Ralph Nader, retail therapy, road to serfdom, Robert Bork, Ronald Reagan, Saturday Night Live, Silicon Valley, SimCity, spice trade, Steve Jobs, telemarketer, The Fortune at the Bottom of the Pyramid, the market place, The Wisdom of Crowds, Thomas L Friedman, Thorstein Veblen, trade route, Tyler Cowen, vertical integration, Virgin Galactic, X Prize

While Johnson does not quite endorse the nutritional merits of cream pies, he must revel in the recent studies suggesting chocolate is good for us (after all), and he obviously grasps what Howard Stern teaches so well: that shock/shlock sells only if it feels subversive and hence progressive. “Where most commentators assume a race to the bottom and a dumbing down—‘an increasingly infantilized society,’ in George Will’s words,” Johnson enthuses, “I see a progressive story: mass culture growing more sophisticated, demanding more cognitive engagement with each passing year.”55 Johnson sets himself squarely against the kind of cultural criticism implied by the idea of an “infantilist” ethos that purportedly spurns nuance and complexity. Consumerism’s “cultural race to the bottom is a myth; we do not live in a fallen state of cheap pleasures that pale beside the intellectual riches of yesterday.

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The selling of the body, which with the passing of actual slavery became a metaphor for coercive exchanges that were largely invisible (Marx and Foucault), has today become a toxic but remarkably well tolerated exemplar of the subordination of identity to commerce, and includes the selling of the constituent elements of the human genome. Roughly 20 percent of the genome has now been patented for private commercial use, and the trend is accelerating. As with so many other elements in the global race to the bottom, it is globalization that drives privatization: the quest for genetic patents is a function of the globalization of research. If “we” don’t do it, the Koreans or the French or the Chinese will. And since consumables along with the “need” for them must in any case be marketed globally for capitalism in its late consumer phase to flourish, bioengineering, cloning, and other advanced forms of genetic research are bound to be put into corporate hands.

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For whatever the causes, and in South Africa they may go back to “the failure of the state, both during and after apartheid…to create jobs, health care, housing, and education accessible to the vast majority of the population,” the fact is that “when justice and social-control methods are ceded to the private sector—to private security firms, to vigilante groups, to simple mob justice…democracy becomes an empty promise.”72 Inequality is built into the market system, which too often becomes a race to the top for those who are wealthy, and a race to the bottom for everyone else. Inequality is not incidental to privatization, it is its very premise. The implicit tactic employed by the well off is to leave behind those who get more in public services than they contribute as taxpayers in a residual “public” sector (a kind of self-financing leper colony that cannot self-finance) and throw in with those who have plenty to contribute in their own private “commons.”

Grouped: How Small Groups of Friends Are the Key to Influence on the Social Web by Paul Adams

Airbnb, Cass Sunstein, cognitive dissonance, content marketing, David Brooks, Dunbar number, information retrieval, invention of the telegraph, Jeff Hawkins, mirror neurons, planetary scale, race to the bottom, Richard Thaler, sentiment analysis, social web, statistical model, the strength of weak ties, The Wisdom of Crowds, web application, white flight

These examples are taken from Jonah Lehrer’s book How We Decide (Houghton Mifflin, 2009). 14. Find out more on Itamar Simonson’s research in the 1993 article “Get closer to your customers by understanding how they make choices.” 9. Marketing and advertising on the social web The problems facing interruption marketing Interruption marketing is a race to the bottom For the past 100 years, marketers have mostly relied on interruption marketing to get their message across, and viewed each new technology as a new way to interrupt people from what they were currently doing to get them to consume their message instead. Our TV programs are interrupted by ads.

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We are being bombarded by more and more competing information, yet our capacity for processing and remembering this information remains the same. The increased competition for that attention means marketers must increase the frequency of their communication, exacerbating the problem. We’re seeing advertising appear in more and more unusual places. No one owns this problem and so it gets worse and worse.1 Interruption marketing is a race to the bottom. The most common way for marketers to increase their chances of being noticed is to increase the frequency of their campaigns. More people are likely to notice it, but it creates immense volumes of noise. On average, you need to run an ad 27 times before someone remembers it: Only one out of every nine ads is noticed, and people need to see the ad three times to remember it, so it takes 27 impressions for it to sink in.2 People no longer trust marketers One clear trend over the past 50 years is that people are more wary of advertising, and trust businesses less than they used to.3 In fact, this is so prevalent that researcher Dan Ariely has found that mistrust in marketing information negatively colors our entire perception of a product, even when we have direct experience to the contrary.

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People will increasingly turn to their friends for information The amount of information accessible to us is increasing exponentially, but our capacity for processing ideas and memory will remain the same. In a world of too much information, marketing and advertising based on interrupting people, or trying to shift their attention from something else, is a race to the bottom. In this information rich world that we have created, people will increasingly turn to their friends for advice. Marketing will need to focus activities on gaining permission to market to people by being credible, trustworthy, interesting, and useful, and by marketing to small, connected groups of friends.

Company: A Short History of a Revolutionary Idea by John Micklethwait, Adrian Wooldridge

affirmative action, AOL-Time Warner, barriers to entry, Bear Stearns, Bonfire of the Vanities, book value, borderless world, business process, Carl Icahn, Charles Lindbergh, classic study, company town, Corn Laws, Cornelius Vanderbilt, corporate governance, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, double entry bookkeeping, Etonian, Fairchild Semiconductor, financial engineering, Great Leap Forward, hiring and firing, Ida Tarbell, industrial cluster, invisible hand, James Watt: steam engine, John Perry Barlow, joint-stock company, joint-stock limited liability company, Joseph Schumpeter, junk bonds, knowledge economy, knowledge worker, laissez-faire capitalism, manufacturing employment, market bubble, Michael Milken, military-industrial complex, mittelstand, new economy, North Sea oil, pneumatic tube, race to the bottom, railway mania, Ronald Coase, scientific management, Silicon Valley, six sigma, South Sea Bubble, Steve Jobs, Steve Wozniak, strikebreaker, The Nature of the Firm, The Wealth of Nations by Adam Smith, Thorstein Veblen, trade route, transaction costs, Triangle Shirtwaist Factory, tulip mania, wage slave, William Shockley: the traitorous eight

In 1830, the Massachusetts state legislature decided that companies did not need to be engaged in public works to be awarded the privilege of limited liability. In 1837, Connecticut went further and allowed firms in most lines of business to become incorporated without special legislative enactment. This competition between the states was arguably the first instance of a phenomenon that would later be dubbed “a race to the bottom,” with local politicians offering greater freedom to companies to keep their business (just as they would much later dangle tax incentives in front of car companies to build factories in their states). All the same, it is worth noting that the states gave away these privileges grudgingly, often ignoring the Dartmouth College ruling and often hedging in “their” companies with restrictions, both financial and social.

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Virginia turned itself into what one legal treatise called a “snug harbour for roaming and piratical corporations.” The New York legislature was forced to enact a special charter for the General Electric Company to prevent it from absconding to New Jersey. But the big winner of this particular “race to the bottom” would be Delaware. By the time the Great Depression struck, the state had become home to more than a third of the industrial corporations on the New York Stock Exchange: twelve thousand companies claimed legal residence in a single office in downtown Wilmington.21 Most of the other industrial trusts converted to holding companies, too.

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A persistent theme of this book has been the jostling for power between the company and government. The balance has unquestionably swung in the company’s favor. The modern firm is not in the same position as the East India Company, which had to go cap in hand to parliament every twenty years to renew its charter. Companies have often profited from “races to the bottom” by forcing governments and American states to compete for their favors. They have also encroached on the prerogatives of nation-states and embedded themselves in the body politic: think of the effect of corporate advertising or modern corporate control of the media. Companies have sometimes been able to outfight even the most powerful governments: IBM survived the American government’s biggest antitrust case of the 1970s; Microsoft seems to have thwarted the biggest assault of the 1990s.

People, Power, and Profits: Progressive Capitalism for an Age of Discontent by Joseph E. Stiglitz

affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, AlphaGo, antiwork, barriers to entry, basic income, battle of ideas, behavioural economics, Berlin Wall, Bernie Madoff, Bernie Sanders, Big Tech, business cycle, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, carried interest, central bank independence, clean water, collective bargaining, company town, corporate governance, corporate social responsibility, creative destruction, Credit Default Swap, crony capitalism, DeepMind, deglobalization, deindustrialization, disinformation, disintermediation, diversified portfolio, Donald Trump, driverless car, Edward Snowden, Elon Musk, Erik Brynjolfsson, fake news, Fall of the Berlin Wall, financial deregulation, financial innovation, financial intermediation, Firefox, Fractional reserve banking, Francis Fukuyama: the end of history, full employment, George Akerlof, gig economy, Glass-Steagall Act, global macro, global supply chain, greed is good, green new deal, income inequality, information asymmetry, invisible hand, Isaac Newton, Jean Tirole, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John von Neumann, Joseph Schumpeter, labor-force participation, late fees, low interest rates, low skilled workers, Mark Zuckerberg, market fundamentalism, mass incarceration, meta-analysis, minimum wage unemployment, moral hazard, new economy, New Urbanism, obamacare, opioid epidemic / opioid crisis, patent troll, Paul Samuelson, pension reform, Peter Thiel, postindustrial economy, price discrimination, principal–agent problem, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, Richard Thaler, Robert Bork, Robert Gordon, Robert Mercer, Robert Shiller, Robert Solow, Ronald Reagan, Savings and loan crisis, search costs, secular stagnation, self-driving car, shareholder value, Shoshana Zuboff, Silicon Valley, Simon Kuznets, South China Sea, sovereign wealth fund, speech recognition, Steve Bannon, Steve Jobs, surveillance capitalism, TED Talk, The Chicago School, The Future of Employment, The Great Moderation, the market place, The Rise and Fall of American Growth, the scientific method, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, two-sided market, universal basic income, Unsafe at Any Speed, Upton Sinclair, uranium enrichment, War on Poverty, working-age population, Yochai Benkler

Thus, American citizens are actually hurt as a result of the higher prices. Even Obama, who prided himself in his efforts to lower the cost of medicine, in the TPP (the Trans-Pacific Partnership Agreement) betrayed his principles. 11.The race to the bottom takes many other forms: banks, for instance, said that unless regulations were loosened, they would relocate their activities elsewhere. The result was a regulatory race to the bottom. The 2008 global financial crisis was among its consequences. 12.Taxes are only one of many variables that affect where firms locate, as we have already noted. But even focusing just on taxes, lowering taxes will induce firms to relocate if the country from which we are trying to steal jobs doesn’t respond.

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The tech giants know how to wield their power in many arenas.77 Amazon used the enticement of thousands of jobs to get cities across the country bidding to have it set up its second headquarters in those cities through, for instance, lower taxes—shifting the tax burden onto others, of course. Small firms can’t do this, and so it gives an enormous advantage to Amazon over local retailers. We need a legal framework that prevents these races to the bottom.78 Intellectual property rights and competition There is one area where government sanctions monopolies: when a patent is given, the innovator gets temporary monopoly power. As we move to a knowledge-based economy, intellectual property rights (IPR) are likely to play an increasing role.

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There are some footloose firms that have actually done this, giving some credibility to the argument.10 Of course, having achieved lower corporate taxes in one country, they turn around to other nations, saying that if they don’t lower their taxes businesses will leave. Not surprisingly, corporations love this race to the bottom.11 The argument that we had to lower corporate tax rates to compete with others was invoked by Republicans as they slashed the corporate tax rate from 35 percent to 21 percent in 2017,12 just as it had been used earlier, in 2001 and 2003, as taxes on capital gains and dividends were cut. The earlier tax cuts didn’t work—they didn’t lead to higher savings, an increase in labor supply, or higher growth,13 and there is no reason to expect that the 2017 cut will either.

The Great Divide: Unequal Societies and What We Can Do About Them by Joseph E. Stiglitz

"World Economic Forum" Davos, accelerated depreciation, accounting loophole / creative accounting, affirmative action, Affordable Care Act / Obamacare, agricultural Revolution, Alan Greenspan, Asian financial crisis, banking crisis, Bear Stearns, Berlin Wall, Bernie Madoff, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carbon tax, Carmen Reinhart, carried interest, classic study, clean water, collapse of Lehman Brothers, collective bargaining, company town, computer age, corporate governance, credit crunch, Credit Default Swap, deindustrialization, Detroit bankruptcy, discovery of DNA, Doha Development Round, everywhere but in the productivity statistics, Fall of the Berlin Wall, financial deregulation, financial innovation, full employment, gentrification, George Akerlof, ghettoisation, Gini coefficient, glass ceiling, Glass-Steagall Act, global macro, global supply chain, Home mortgage interest deduction, housing crisis, income inequality, income per capita, information asymmetry, job automation, Kenneth Rogoff, Kickstarter, labor-force participation, light touch regulation, Long Term Capital Management, low interest rates, manufacturing employment, market fundamentalism, mass incarceration, moral hazard, mortgage debt, mortgage tax deduction, new economy, obamacare, offshore financial centre, oil shale / tar sands, Paul Samuelson, plutocrats, purchasing power parity, quantitative easing, race to the bottom, rent-seeking, rising living standards, Robert Solow, Ronald Reagan, Savings and loan crisis, school vouchers, secular stagnation, Silicon Valley, Simon Kuznets, subprime mortgage crisis, The Chicago School, the payments system, Tim Cook: Apple, too big to fail, trade liberalization, transaction costs, transfer pricing, trickle-down economics, Turing machine, unpaid internship, upwardly mobile, urban renewal, urban sprawl, very high income, War on Poverty, Washington Consensus, We are the 99%, white flight, winner-take-all economy, working poor, working-age population

This was important, because it allowed a steady flow of cash into the housing market, which in turn provided the fuel for the housing bubble. The rating agencies’ behavior may have been affected by the perverse incentive of being paid by those that they rated, but I suspect that even without these incentive problems, their models would have been badly flawed. Competition, in this case, had a perverse effect: It caused a race to the bottom—a race to provide ratings that were most favorable to those being rated. Mortgage brokers played a key role: They were less interested in originating good mortgages—after all, they didn’t hold the mortgages for long—than in originating many mortgages. Some of the mortgage brokers were so enthusiastic that they invented new forms of mortgages: The low- or no-documentation loans to which I referred earlier were an invitation to deception, and came to be called liar loans.

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In this way we could increase investment and employment here at home—a far cry from the current system, in which we in effect encourage even U.S. corporations to produce elsewhere. (Even if U.S. taxes are no higher than the average, there are some tax havens—like Ireland—that are engaged in a race to the bottom, trying to recruit companies to make their country their tax home.) Such a reform would end the corporate stampede toward “inversions,” changing a corporation’s tax home to avoid taxes. Where they claim their home office is would make little difference; only where they actually do business would.

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American innovations in rent seeking—enriching oneself not by making the size of the economic pie bigger but by manipulating the system to seize a larger slice—have gone global. Asymmetric globalization has also exerted its toll around the globe. Mobile capital has demanded that workers make wage concessions and governments make tax concessions. The result is a race to the bottom. Wages and working conditions are being threatened. Pioneering firms like Apple, whose work relies on enormous advances in science and technology, many of them financed by government, have also shown great dexterity in avoiding taxes. They are willing to take, but not to give back. Inequality and poverty among children are a special moral disgrace.

American Kleptocracy: How the U.S. Created the World's Greatest Money Laundering Scheme in History by Casey Michel

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", Bellingcat, Berlin Wall, Bernie Sanders, bitcoin, clean water, coronavirus, corporate governance, cross-border payments, cryptocurrency, deindustrialization, Donald Trump, en.wikipedia.org, estate planning, Fall of the Berlin Wall, fixed income, forensic accounting, Global Witness, high net worth, hiring and firing, income inequality, Internet Archive, invention of the telegraph, Jeffrey Epstein, joint-stock company, Kickstarter, Maui Hawaii, McMansion, megaproject, Mikhail Gorbachev, New Journalism, offshore financial centre, opioid epidemic / opioid crisis, Ponzi scheme, race to the bottom, Ronald Reagan, Silicon Valley, Silicon Valley startup, Steve Jobs, too big to fail

Ibid. 5.  Ibid. 6.  “Standard Oil,” Encyclopedia Brittanica, https://www.britannica.com/topic/Standard-Oil. 7.  Davis, “Delaware Inc.” 8.  American Law Review 33 (St. Louis: Review Publishing, 1899), 419. 9.  “Tax Competition and the Race to the Bottom,” Tax Justice Network, https://www.taxjustice.net/topics/tax-competition-and-the-race-to-the-bottom/. 10. Hamill, “The Story of LLCs: Combining the Best Features of a Flawed Business Tax Structure.” 11. American Law Review 33, 419. 12. Nicholas Shaxson, Treasure Islands (New York: Palgrave Macmillan, 2012). 13. Davis, “Delaware Inc.” 14. 

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And it means that it’s the states that are making millions from corporate registration fees, which they can use to buoy their budgets. With this competition—with states offering increasing efficiency and protections for corporate clients, including those who wanted anonymity—American states engaged in a so-called race to the bottom. And where that bottom lies remains anyone’s guess. 3 CONTROL EVERYTHING, OWN NOTHING “Imagine the possibilities!” —Wyoming Corporate Services1 Most of the audiences S. D. Woo encountered when traveling had never heard of Delaware, or knew anything about the state. Even most Americans would be hard-pressed to rattle off more than a few facts, if any, about the state.

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The corporate sprint to New Jersey sparked a response from other state governments looking to get their share of this new Klondike gold mine. A renaissance in “business friendly” regulations quickly followed, with regulatory rollbacks racing from state to state. Thanks to these turn-of-the-century innovations, as one researcher related, U.S. states found themselves in that “race to the bottom,”9 with new laws imposing fewer and fewer “restraints on potential corporate abuses.”10 Basic corporate regulations—things like requiring shareholder input, or assuming liability for any malfeasance or accidents—suddenly began disappearing across states. And along the way, requirements for publicly identifying those behind the corporations also disappeared.

The Globalization Paradox: Democracy and the Future of the World Economy by Dani Rodrik

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Asian financial crisis, bank run, banking crisis, Bear Stearns, bilateral investment treaty, borderless world, Bretton Woods, British Empire, business cycle, capital controls, Carmen Reinhart, central bank independence, classic study, collective bargaining, colonial rule, Corn Laws, corporate governance, corporate social responsibility, credit crunch, Credit Default Swap, currency manipulation / currency intervention, David Ricardo: comparative advantage, deindustrialization, Deng Xiaoping, Doha Development Round, en.wikipedia.org, endogenous growth, eurozone crisis, export processing zone, financial deregulation, financial innovation, floating exchange rates, frictionless, frictionless market, full employment, George Akerlof, guest worker program, Hernando de Soto, immigration reform, income inequality, income per capita, industrial cluster, information asymmetry, joint-stock company, Kenneth Rogoff, land reform, liberal capitalism, light touch regulation, Long Term Capital Management, low interest rates, low skilled workers, margin call, market bubble, market fundamentalism, Martin Wolf, mass immigration, Mexican peso crisis / tequila crisis, microcredit, Monroe Doctrine, moral hazard, Multi Fibre Arrangement, night-watchman state, non-tariff barriers, offshore financial centre, oil shock, open borders, open economy, Paul Samuelson, precautionary principle, price stability, profit maximization, race to the bottom, regulatory arbitrage, Savings and loan crisis, savings glut, Silicon Valley, special drawing rights, special economic zone, subprime mortgage crisis, The Wealth of Nations by Adam Smith, Thomas L Friedman, Tobin tax, too big to fail, trade liberalization, trade route, transaction costs, tulip mania, Washington Consensus, World Values Survey

Federal Reserve vice chairman, worrying that international outsourcing will cause unprecedented dislocations for the U.S. labor force; Martin Wolf, the Financial Times columnist and one of the most articulate advocates of globalization, expressing his disappointment with the way financial globalization has turned out; and Larry Summers, the Clinton administration’s “Mr. Globalization” and economic adviser to President Barack Obama, musing about the dangers of a race to the bottom in national regulations and the need for international labor standards. While these worries hardly amount to the full frontal attack mounted by the likes of Joseph Stiglitz, the Nobel Prize–winning economist, they still constitute a remarkable shift in the intellectual climate. Moreover, even those who have not lost heart often disagree vehemently about where they would like to see globalization go.

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Such a transformation would benefit the communities in which these corporations and their affiliates operate. But, as Ruggie explains, there would be additional advantages. Improving large corporations’ social and environmental performance would spur emulation by other, smaller firms. It would alleviate the widespread concern that international competition creates a race to the bottom in labor and environmental standards at the expense of social inclusion at home. And it would allow the private sector to shoulder some of the functions that states are finding increasingly difficult to finance and carry out, as in public health and environmental protection, narrowing the governance gap between international markets and national governments.7 Arguments on behalf of new forms of global governance—whether of the delegation, network, or corporate social responsibility type—raise troubling questions.

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Our reliance on global governance also muddles our understanding of the rights of nation states to establish and uphold domestic standards and regulations, and the maneuvering room they have for exercising those rights. The worry that this maneuvering room has narrowed too much is the main reason for the widespread concern about the “race to the bottom” in labor standards, corporate taxes, and elsewhere. Ultimately, the quest for global governance leaves us with too little real governance. Our only chance of strengthening the infrastructure of the global economy lies in reinforcing the ability of democratic governments to provide those foundations.

Chavs: The Demonization of the Working Class by Owen Jones

Asperger Syndrome, banking crisis, Berlin Wall, Boris Johnson, British Empire, Bullingdon Club, call centre, collapse of Lehman Brothers, credit crunch, deindustrialization, Etonian, facts on the ground, falling living standards, first-past-the-post, ghettoisation, Gini coefficient, green new deal, hiring and firing, housing crisis, illegal immigration, income inequality, informal economy, low skilled workers, low-wage service sector, mass immigration, meritocracy, Neil Kinnock, Occupy movement, pension reform, place-making, plutocrats, post-war consensus, race to the bottom, Right to Buy, rising living standards, social distancing, The Bell Curve by Richard Herrnstein and Charles Murray, The Spirit Level, too big to fail, unpaid internship, upwardly mobile, We are the 99%, wealth creators, Winter of Discontent, women in the workforce, working-age population

Why, the argument went, should private sector workers with comparatively meagre pensions subsidize the generous settlements of the public sector? There was no doubt that there had been a collapse in private sector pension provision. At the beginning of 2012, the Association of Consulting Actuaries warned that nine out of ten private sectordefined benefit schemes were closed to new entrants. But what was being proposed was a race to the bottom; public sector pensions should be dragged down, not private sector pensions dragged up. The majority of public sector workers saw this rhetoric for what it really was: on 30 June 2011, hundreds of thousands of teachers and civil servants went on strike. But with the Government still refusing to make significant concessions, trade union ballots across the public sector delivered overwhelming support for industrial action.

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'It's a disgrace, I feel as though I've been used,' said one." It is not just agency and temporary workers who suffer because of job insecurity and outrageous terms and conditions. Fellow workers are forced to compete with people who can be hired far more cheaply. Everyone's wages are pushed down as a result. This is the 'race to the bottom' of pay and conditions. It might sound like a throwback to the Victorian era, but this could be the future for millions of workers as businesses exploit economic crisis for their own ends. In a document entitled The Shape of BusinessThe Next Ten Years, the Confederation of British Industry (CBI)-which represents major employers--claimed that the crash was the catalyst for a new era in business.

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The real reasons for the strike, carefully obscured by the mainstream media, shed light on some of the complexities underlying the workingclass anti-immigration backlash in modem Britain. The Lindsey refinery's employer, IREM, had hired cheap, non-unionized workers from abroad. Not only did this threaten to break the workers' union, italso meant everyone else's wages and conditions would be pushed down in a 'race to the bottom'. 'We've got more in common with people around this world than with the employers who are doing this to us,' said Keith Gibson, one of the leaders of the strike and a member of the Trotskyist Socialist Party. BNP figures who tried to jump on the bandwagon were barred from the picket line. The demands of the strike committee included the unionization of immigrant labour, trade union assistance for immigrant workers and the building of links with construction workers on the continent.

In Defense of Global Capitalism by Johan Norberg

anti-globalists, Asian financial crisis, capital controls, clean water, correlation does not imply causation, creative destruction, Deng Xiaoping, Edward Glaeser, export processing zone, Gini coefficient, Great Leap Forward, half of the world's population has never made a phone call, Hernando de Soto, illegal immigration, income inequality, income per capita, informal economy, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", Joseph Schumpeter, Kenneth Rogoff, land reform, Lao Tzu, liberal capitalism, market fundamentalism, Mexican peso crisis / tequila crisis, Naomi Klein, new economy, open economy, prediction markets, profit motive, race to the bottom, rising living standards, Silicon Valley, Simon Kuznets, structural adjustment programs, The Wealth of Nations by Adam Smith, Tobin tax, trade liberalization, trade route, transaction costs, trickle-down economics, Tyler Cowen, union organizing, zero-sum game

For if the developing countries pay lower wages, do not protect their environment, and have insufferably long working hours, then won’t their cheap output eliminate our higher paying jobs, forcing us to lower our standards and our wages? We will have to keep working harder and longer to keep up. Firms and capital quickly migrate to where the lowest wages and the worst working conditions exist. It will be a ‘‘race to the bottom.’’ The one with the lowest social standard will win and will corner the investments and export revenues. Theoretically this seems a tough case to answer. The only trouble is that it has no foundation in reality. The world has not witnessed a deterioration of working conditions or wages in the past few decades, but precisely the opposite.

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Each individual can opt out of certain things so as not to feel permanently at the beck and call of others. You don’t have to check your e-mail over the weekend, and there is no law against turning on the answering machine. Big is beautiful In the anti-globalists’ worldview, multinational corporations are leading the race to the bottom. By moving to developing countries and taking advantage of poor people and lax regulations, they are making money hand over fist and forcing other governments to adopt ever less restrictive policies. On this view, tariffs and barriers to foreign investment become a kind of national defense, a protection against a ruthless entrepreneurial power seeking to profiteer at people’s expense.

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That is a dismal thesis, with the implication that when people obtain better opportunities, resources, and technology, they use them to abuse nature. Does there really have to be a conflict between development and the environment? The notion that there has to be a conflict runs into the same problem as the whole idea of a race to the bottom: it doesn’t tally with reality. There is no exodus of industry to countries with poor environmental standards, and there is no downward pressure on the level of global environmental protection. Instead, the bulk of American and European investments goes to countries with environmental regulations similar to their own.

The Global Auction: The Broken Promises of Education, Jobs, and Incomes by Phillip Brown, Hugh Lauder, David Ashton

active measures, affirmative action, An Inconvenient Truth, barriers to entry, Branko Milanovic, BRICs, business process, business process outsourcing, call centre, classic study, collective bargaining, corporate governance, creative destruction, credit crunch, David Ricardo: comparative advantage, deindustrialization, deskilling, disruptive innovation, Dutch auction, Ford Model T, Frederick Winslow Taylor, full employment, future of work, glass ceiling, global supply chain, Great Leap Forward, immigration reform, income inequality, industrial cluster, industrial robot, intangible asset, job automation, Jon Ronson, Joseph Schumpeter, knowledge economy, knowledge worker, low skilled workers, manufacturing employment, market bubble, market design, meritocracy, neoliberal agenda, new economy, Paul Samuelson, pensions crisis, post-industrial society, profit maximization, purchasing power parity, QWERTY keyboard, race to the bottom, Richard Florida, Ronald Reagan, shared worldview, shareholder value, Silicon Valley, sovereign wealth fund, stem cell, tacit knowledge, tech worker, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, transaction costs, trickle-down economics, vertical integration, winner-take-all economy, working poor, zero-sum game

There is a recognition that low-cost countries are developing their own knowledge workers capable of achieving global standards that were previously assumed to be out of reach by anyone other than Western workers. Thomas Friedman’s account of the “flattening” of the world economy has been widely debated. He sees little reason to worry about America’s middle classes being embroiled in a global race to the bottom because he focused on the race to the top. The knowledge wars are, he believes, forcing Americans to raise their game in the competition for the best and most innovative ideas, leading him to conclude, America, as a whole, will do fine in a flat world with free trade— provided it continues to churn out knowledge workers who are able 22 The Global Auction to produce idea-based goods that can be sold globally and who are able to fill the knowledge jobs that will be created as we not only expand the global economy but connect all the knowledge pools in the world.

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We were asked to turn off our recording equipment and in hushed voices, the two officials described their growing misgivings about the impact of free trade agreements working against the interests of American workers but to the benefit of American corporations. The consequences of this shift in economic power also led Robert Scott to conclude, “This shift has increased the global ‘race to the bottom’ in wages and environmental quality and closed thousands of U.S. factories, decimating employment in a wide range of communities, states, and entire regions of the United States. U.S. national interests have suffered while U.S. multinationals have enjoyed record profits on their foreign direct investments.” 23 The financial crash highlighted the economic catastrophe resulting from the failure of federal authorities to regulate financial markets, and the global auction highlights the social catastrophe of failing to regulate the relationship among education, jobs, and rewards.

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This would reduce the risks managers take and enable them to focus more on the development of productive assets rather than inflating share prices or company profits for personal gain. Governments around the world, including the U.S. administration, also need to change the rules of the global auction. This would include new rules for the conduct of corporations and their executives designed to limit the race to the bottom that the reverse auction implies for many college-educated as well as less qualified workers. International labor A New Opportunity 159 standards would have to be reformed, allowing workers to counterbalance the power of global corporations by strengthening their rights to act collectively across national borders.

Unfinished Business by Tamim Bayoumi

Alan Greenspan, algorithmic trading, Asian financial crisis, bank run, banking crisis, Basel III, battle of ideas, Bear Stearns, behavioural economics, Ben Bernanke: helicopter money, Berlin Wall, Big bang: deregulation of the City of London, book value, Bretton Woods, British Empire, business cycle, buy and hold, capital controls, Celtic Tiger, central bank independence, collapse of Lehman Brothers, collateralized debt obligation, credit crunch, currency manipulation / currency intervention, currency peg, Doha Development Round, facts on the ground, Fall of the Berlin Wall, financial deregulation, floating exchange rates, full employment, Glass-Steagall Act, Greenspan put, hiring and firing, housing crisis, inflation targeting, junk bonds, Just-in-time delivery, Kenneth Rogoff, liberal capitalism, light touch regulation, London Interbank Offered Rate, Long Term Capital Management, market bubble, Martin Wolf, moral hazard, oil shale / tar sands, oil shock, price stability, prisoner's dilemma, profit maximization, quantitative easing, race to the bottom, random walk, reserve currency, Robert Shiller, Rubik’s Cube, Savings and loan crisis, savings glut, technology bubble, The Great Moderation, The Myth of the Rational Market, the payments system, The Wisdom of Crowds, too big to fail, trade liberalization, transaction costs, value at risk

The decision to retain national supervision was crucial as it undermined the European banking system in two ways. Competition across national supervisors meant that they increasingly became supporters for their own major banks. This led to the creation of large “national champions” and promoted a supervisory “race to the bottom” as regulators looked to boost the competitive position of their own champions by not being too intrusive. In addition, the fact that in the end almost all entry into other European countries was through subsidiaries meant that the costs of the eventual crisis were bottled up in individual countries.

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Bank capital is intrinsically risky as owners are the first to lose their money in the case of financial distress. Accordingly, investors demand a higher rate of return on capital compared to safer forms of borrowing such as bonds or deposits. The concern was that competition across supervisors was creating a regulatory “race to the bottom” in which each country tried to make their banks more competitive by diluting the requirements on their expensive capital buffers, leading to inappropriately thin buffers across the board.17 The risk had been underlined by the international repercussions of major bank failures, such as that of Continental Illinois Bank in 1984.

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The split between centralized bank supervision and national responsibility for bank rescues risks undermining the effectiveness of centralized ECB supervision of Euro area banks. This is because it replaces one set of misaligned incentives with another set. The problem with the pre-crisis system was that national regulators were responsible for both bank supervision and support, creating incentives for a regulatory race to the bottom. The new system generates a new misalignment of incentives since national regulators, who have responsibility for bank support, will generally want to minimize their assessment of banking problems and the associated costs which will put them at odds with the ECB, which is responsible for supervision.

Free Ride by Robert Levine

A Declaration of the Independence of Cyberspace, Anne Wojcicki, book scanning, borderless world, Buckminster Fuller, citizen journalism, commoditize, company town, correlation does not imply causation, creative destruction, crowdsourcing, death of newspapers, Edward Lloyd's coffeehouse, Electric Kool-Aid Acid Test, Firefox, future of journalism, Googley, Hacker Ethic, informal economy, Jaron Lanier, John Gilmore, John Perry Barlow, Joi Ito, Julian Assange, Justin.tv, Kevin Kelly, linear programming, Marc Andreessen, Mitch Kapor, moral panic, offshore financial centre, pets.com, publish or perish, race to the bottom, Saturday Night Live, Silicon Valley, Silicon Valley startup, Skype, spectrum auction, Steve Jobs, Steven Levy, Stewart Brand, subscription business, Telecommunications Act of 1996, the long tail, Whole Earth Catalog, WikiLeaks

Media companies that sell products online have to lower prices in order to compete with pirated versions of those same products sold by companies that bear none of the production costs. By making it essentially optional to pay for content, piracy has set the price of digital goods at zero. The result is a race to the bottom, and the inevitable response of media companies has been cuts—first in staff, then in ambition, and finally in quality. This devaluation could also hurt the Internet, since professional media provides much of the value in a broadband subscription. A 2010 study by the Pew Research Center’s Project for Excellence in Journalism found that more than 99 percent of blog links to news stories went to mainstream media outlets like newspapers and networks.15 File-sharing services are filled with copyrighted music.16 Seven of the ten most popular clips in YouTube history are major-label music videos.17 Amid the Internet’s astonishing array of choices, statistics show that most consumers continue to engage with the same kind of culture they did before—only in a way that’s not sustainable for those who make it.

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In almost every way, it’s the exact opposite of the more efficient Internet, where more content is pirated than purchased and the producers of shows are pressured into giving them away before another company can do it for them. Competition concerns cost and Google search ranking, and the winners are sites like the Huffington Post. If cable worked like the Internet, the result would be a race to the bottom: shows that are free to watch, cheap to make, and easy to forget. The company that represents the greatest threat to television may be Google. In May 2010, the search giant announced Google TV, a platform that brings the Internet to a TV screen. As with Boxee, that means users can easily download video illegally as well as buy it.

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Since the Internet has global reach, technology executives worry their companies could be subject to the most onerous regulations of any country in which they operate—“a world of Singaporean free speech, American tort law, Russian commercial regulation, and Chinese civil rights,” as Goldsmith and Wu describe it.10 When Judge Gomez issued his Yahoo! decision, online activists worried it set a precedent that would allow any country to impose its laws on the online world. “We now risk a race to the bottom,” said Alan Davidson, an attorney with the Center for Democracy and Technology who has since become the top lobbyist at Google. “The most restrictive rules about Internet content—influenced by any country—could have an impact on people around the world.”11 This is certainly worth worrying about, but it could be seen as a very American view.

Melting Pot or Civil War?: A Son of Immigrants Makes the Case Against Open Borders by Reihan Salam

Affordable Care Act / Obamacare, Bonfire of the Vanities, charter city, delayed gratification, Donald Trump, driverless car, Edward Glaeser, gentrification, ghettoisation, guest worker program, illegal immigration, immigration reform, income inequality, income per capita, industrial robot, interchangeable parts, job automation, low skilled workers, low-wage service sector, mass immigration, megacity, new economy, obamacare, open borders, open immigration, race to the bottom, self-driving car, Shenzhen special economic zone , Silicon Valley, special economic zone, two tier labour market, upwardly mobile, urban decay, working poor

Further, the publisher does not have any control over and does not assume any responsibility for author or third-party websites or their content. Version_1 To my sisters CONTENTS TITLE PAGE COPYRIGHT DEDICATION Introduction CHAPTER ONE The Unfinished Melting Pot CHAPTER TWO Somebody Else’s Babies CHAPTER THREE Race to the Bottom CHAPTER FOUR Jobs Robots Will Do CHAPTER FIVE It’s a Small World CHAPTER SIX Nation Building Conclusion ACKNOWLEDGMENTS NOTES INDEX ABOUT THE AUTHOR Introduction A few years ago, a cable news producer asked me to appear on his television program to discuss a grisly murder in which, if I recall correctly, a Muslim immigrant had hacked someone to death in the name of Islam.

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As the political scientist Morris Levy suggested to The New York Times, Americans “dislike the idea of a permanent second-class citizen,” as it cuts against “a core set of values that people think of as really elemental to being American.”52 The United States does have long-term guest-worker programs, to be sure, but they typically give guest workers the right to bring over their dependents. Overstaying guest-worker visas is common, and, of course, people on temporary visas often have citizen children. The babies of low-skill immigrants are as much our babies as the babies of high-skill immigrants. And, as of now, we are letting them down. CHAPTER THREE Race to the Bottom As a little kid, I was an accidental ethnic pioneer. On the first day of kindergarten, I remember being teased for being an “Indian,” which is to say an indigenous person. I vaguely recall that my family found the teasing more baffling than offensive, and so I brushed it off. In short order, the teasing stopped and I befriended most of my classmates.

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Politico, March 19, 2018. www.politico.com/magazine/story/2018/03/19/how-america-fell-behind-the-world-on-immigration-217658. 52. Bui, Quoctrung and Caitlin Dickerson. “What Can the U.S. Learn From How Other Countries Handle Immigration?” The New York Times, February 16, 2018. www.nytimes.com/interactive/2018/02/16/upshot/comparing-immigration-policies-across-countries.html. CHAPTER THREE: RACE TO THE BOTTOM 1. Krogstad, Jens Manuel and Ana Gonzalez-Barrera. “A majority of English-speaking Hispanics in the U.S. are bilingual.” Pew Research Center, March 24, 2018. www.pewresearch.org/fact-tank/2015/03/24/a-majority-of-english-speaking-hispanics-in-the-u-s-are-bilingual. 2. Inspired by Richard Alba. 3.

The Great Firewall of China by James Griffiths;

A Declaration of the Independence of Cyberspace, activist fund / activist shareholder / activist investor, Albert Einstein, anti-communist, bike sharing, bitcoin, Black Lives Matter, borderless world, call centre, Cambridge Analytica, Chelsea Manning, Citizen Lab, Deng Xiaoping, digital divide, digital rights, disinformation, don't be evil, Donald Trump, Edward Snowden, end-to-end encryption, Evgeny Morozov, fake news, gig economy, Great Leap Forward, high-speed rail, jimmy wales, John Gilmore, John Perry Barlow, Mark Zuckerberg, megacity, megaproject, microaggression, Mikhail Gorbachev, Mitch Kapor, mobile money, Occupy movement, pets.com, profit motive, QR code, race to the bottom, RAND corporation, ride hailing / ride sharing, Ronald Reagan, Silicon Valley, Silicon Valley startup, Skype, Snapchat, South China Sea, Steve Jobs, Stewart Brand, Stuxnet, technoutopianism, The future is already here, undersea cable, WikiLeaks, zero day

Liu, ‘An open letter to Jerry Yang, chairman of Yahoo! Inc. regarding the arrest of Shi Tao’ in ‘Race to the Bottom’: corporate complicity in Chinese internet censorship, New York NY: Human Rights Watch, 2006, https://www.hrw.org/reports/2006/china0806/14.htm 21L. Rao, ‘The most expensive sake that Alibaba’s Jack Ma ever had’, Fortune, 25 September 2015, http://fortune.com/2015/09/25/yahoo-alibaba-investment-jack-ma/ Part 2 Chapter 6 1‘How censorship works in China: a brief overview’ in ‘Race to the Bottom’: corporate complicity in Chinese internet censorship, New York NY: Human Rights Watch, 2006, https://www.hrw.org/reports/2006/china0806/3.htm 2R.

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Griffiths, ‘VPN down: China goes after Astrill, other anti-censorship apps in run up to WW2 anniversary parade’, South China Morning Post, 26 August 2015, http://www.scmp.com/tech/apps-gaming/article/1852658/vpn-down-china-goes-after-astrill-other-anti-censorship-apps-run 18‘How censorship works in China: a brief overview’ in ‘Race to the Bottom’: corporate complicity in Chinese internet censorship, New York NY: Human Rights Watch, 2006, https://www.hrw.org/reports/2006/china0806/3.htm 19G. Walton, China’s Golden Shield: corporations and the development of surveillance technology in the People’s Republic of China, Montreal: International Centre for Human Rights and Democratic Development, 2001, https://web.archive.org/web/20020206170828/http://www.ichrdd.ca/english/commdoc/publications/globalization/goldenShieldEng.html 20J.

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Sulzberger, ‘China’s leaders; in Jiang’s words: “I hope the Western world can understand China better”’, The New York Times, 10 August 2001, https://www.nytimes.com/2001/08/10/world/china-s-leaders-jiang-s-words-hope-western-world-can-understand-china-better.html 3‘Jiang renews warning against “pernicious” internet’, Agence France-Presse, 11 July 2001. 4‘How censorship works in China: a brief overview’ in ‘Race to the Bottom’: corporate complicity in Chinese internet censorship, New York NY: Human Rights Watch, 2006, https://www.hrw.org/reports/2006/china0806/3.htm 5‘Golden Shield project’, Guangdong Hongan Group, 2012, https://web.archive.org/web/20150416093636/http://www.gdhongan.com:80/industroy.asp?ChannelID=7# 6J.

Why We Can't Afford the Rich by Andrew Sayer

"World Economic Forum" Davos, accounting loophole / creative accounting, Alan Greenspan, Albert Einstein, Anthropocene, anti-globalists, asset-backed security, banking crisis, banks create money, basic income, biodiversity loss, bond market vigilante , Boris Johnson, Bretton Woods, British Empire, Bullingdon Club, business cycle, call centre, capital controls, carbon footprint, carbon tax, collective bargaining, corporate raider, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, crony capitalism, David Graeber, David Ricardo: comparative advantage, debt deflation, decarbonisation, declining real wages, deglobalization, degrowth, deindustrialization, delayed gratification, demand response, don't be evil, Double Irish / Dutch Sandwich, en.wikipedia.org, Etonian, financial engineering, financial innovation, financial intermediation, Fractional reserve banking, full employment, G4S, Goldman Sachs: Vampire Squid, green new deal, high net worth, high-speed rail, income inequality, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, Isaac Newton, James Carville said: "I would like to be reincarnated as the bond market. You can intimidate everybody.", James Dyson, job automation, Julian Assange, junk bonds, Kickstarter, labour market flexibility, laissez-faire capitalism, land bank, land value tax, long term incentive plan, low skilled workers, Mark Zuckerberg, market fundamentalism, Martin Wolf, mass immigration, means of production, moral hazard, mortgage debt, negative equity, neoliberal agenda, new economy, New Urbanism, Northern Rock, Occupy movement, offshore financial centre, oil shale / tar sands, patent troll, payday loans, Philip Mirowski, plutocrats, popular capitalism, predatory finance, price stability, proprietary trading, pushing on a string, quantitative easing, race to the bottom, rent-seeking, retail therapy, Ronald Reagan, shareholder value, short selling, sovereign wealth fund, Steve Jobs, tacit knowledge, TED Talk, The Nature of the Firm, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transfer pricing, trickle-down economics, universal basic income, unpaid internship, upwardly mobile, Washington Consensus, wealth creators, WikiLeaks, Winter of Discontent, working poor, Yom Kippur War, zero-sum game

The second myth is that corporations have a duty to avoid tax in order to meet their obligation to maximise shareholder value. But there is no such obligation in law. Tax havens compete with one another to attract the rich and their wealth, creating a race to the bottom (‘tax competition’) that continually pressures other countries to lower their own taxes, or at least those that most affect the rich. Escaping financial regulations also creates a race to the bottom to deregulate onshore economies. Rates of corporation tax have fallen across the rich countries since the 1970s. Companies that hide activities offshore can undercut those companies that actually do pay their tax; those that do pay may complain but, not surprisingly, many decide that if they can’t beat them, they may as well join them.

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That the banks chose to hand over so much of their enormous profits to shareholders at a time when they needed to build up their capital base speaks volumes about the irrationality of shareholder capitalism. In the 1980s, governments began to extol the virtues of ‘flexible labour markets’, a brilliant euphemism for reduced protection, bargaining power and security for workers and a race-to-the-bottom for cheaper labour. In this new environment, slow growth of wages and salaries meant that aggregate demand for goods and services also grew more slowly, making it harder for companies to make a profit from investment in new capacity and products. Two things reduced or postponed the damage; first, the rise in women’s employment, which increased household income for many, and second, the dramatic expansion of consumer debt, particularly mortgages and credit cards, although eventually this depressed demand and consumption because the borrowers had to pay off the interest.

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While they will no doubt be justified as ‘cutting red tape’, their aim is to maximise the economic and political power of international business by minimising government restrictions on their operations, whether they are for protecting public health, employment conditions or the environment, or simply for allowing governments to control their economies. The most likely – and intended – outcome is a race to the bottom in standards. The treaties also look set to extend corporations’ intellectual property rights, preventing individuals and other companies, including smaller businesses across the world, from benefiting from their innovations without paying them rent. As we saw in Parts One and Two, companies themselves typically benefit from countless freely available innovations of the commons, yet their powers to privatise their own innovations are being extended.

Refuge: Transforming a Broken Refugee System by Alexander Betts, Paul Collier

Alvin Roth, anti-communist, centre right, charter city, corporate social responsibility, Donald Trump, failed state, Filter Bubble, global supply chain, informal economy, it's over 9,000, Kibera, mass immigration, megacity, middle-income trap, mobile money, Mohammed Bouazizi, mutually assured destruction, open borders, Peace of Westphalia, peer-to-peer, race to the bottom, randomized controlled trial, rising living standards, risk/return, school choice, special economic zone, structural adjustment programs, tail risk, trade route, urban planning, zero-sum game

The cooperation problem in the refugee regime can be thought of as what game theorists would describe as a ‘suasion game’: one in which weaker players are left with little choice but to cooperate and stronger players are left with little incentive to cooperate.12 This explains in part why fewer than 1 per cent of the world’s refugees get access to resettlement in third countries beyond their region of origin. It explains why UNHCR’s assistance programmes around the world are chronically under-funded. It explains why distant countries in the global North, who take a relatively tiny proportion of the world’s refugees, constantly compete with one another in a ‘race to the bottom’ in terms of asylum standards in order to encourage refugees to choose another country’s territory rather than their own. In the absence of clear rules, attempts by UNHCR to overcome this collective action failure have had to be ad hoc and episodic. The organization relies upon annual voluntary contributions for almost all of its budget, rather than having access to assessed, multi-year funding contributions.

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Yet it is crucial that if refugee protection is to be sustainable, better answers be found, premised upon collective rather than unilateral action and reinforcing rather than undermining the quantity and quality of protection available to refugees. It is in the historical absence of a clear set of principles and mechanisms for responsibility-sharing that, gradually, almost all states have found themselves in a race to the bottom in term of standards of protection. MISSING MODELS: WHY CAMPS ARE NOT ENOUGH The principal way in which the refugee regime provides protection is ineffective and outdated. Since the 1980s the dominant model has been the long-term provision of assistance in refugee camps and closed settlements.

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The Commission gradually negotiated a Common European Asylum System (CEAS) – a series of common criteria for qualification (who is a refugee?), adjudication (how do we determine who is a refugee?), and reception (what rights should asylum-seekers and refugees receive?). The aim was to avoid a ‘race to the bottom’ in terms of standards, reduce the likelihood of refugees engaging in ‘asylum shopping’, and ensure no one state ended up with a disproportionate share of refugees because of its having more generous policies. That was the theory. In practice, the system was dysfunctional from the start. States adopted different asylum standards.

The Revolution That Wasn't: GameStop, Reddit, and the Fleecing of Small Investors by Spencer Jakab

4chan, activist fund / activist shareholder / activist investor, barriers to entry, behavioural economics, Bernie Madoff, Bernie Sanders, Big Tech, bitcoin, Black Swan, book value, buy and hold, classic study, cloud computing, coronavirus, COVID-19, crowdsourcing, cryptocurrency, data science, deal flow, democratizing finance, diversified portfolio, Dogecoin, Donald Trump, Elon Musk, Everybody Ought to Be Rich, fake news, family office, financial innovation, gamification, global macro, global pandemic, Google Glasses, Google Hangouts, Gordon Gekko, Hacker News, income inequality, index fund, invisible hand, Jeff Bezos, Jim Simons, John Bogle, lockdown, Long Term Capital Management, loss aversion, Marc Andreessen, margin call, Mark Zuckerberg, market bubble, Masayoshi Son, meme stock, Menlo Park, move fast and break things, Myron Scholes, PalmPilot, passive investing, payment for order flow, Pershing Square Capital Management, pets.com, plutocrats, profit maximization, profit motive, race to the bottom, random walk, Reminiscences of a Stock Operator, Renaissance Technologies, Richard Thaler, ride hailing / ride sharing, risk tolerance, road to serfdom, Robinhood: mobile stock trading app, Saturday Night Live, short selling, short squeeze, Silicon Valley, Silicon Valley billionaire, SoftBank, Steve Jobs, TikTok, Tony Hsieh, trickle-down economics, Vanguard fund, Vision Fund, WeWork, zero-sum game

ISBN: 9780593421154 (hardcover) ISBN: 9780593421161 (ebook) book design by chris welch, adapted for ebook by estelle malmed pid_prh_6.0_139089994_c0_r0 To my three apes,Jonah, Elliott, and Danny Contents Introduction Chapter 1 Mr. Kitty Goes to Washington Chapter 2 September 8, 2019 Chapter 3 Killer App Chapter 4 Winter of 2019–2020 Chapter 5 Race to the Bottom Chapter 6 April 2020 Chapter 7 Get Shorty Chapter 8 Summer–Fall 2020 Chapter 9 Cheat Code Chapter 10 Holiday Season 2020–2021 Chapter 11 Poking the Bear Chapter 12 January 22, 2021 Chapter 13 Rise of the Apes Chapter 14 January 26, 2021 Chapter 15 The Influencers Chapter 16 January 27, 2021 Chapter 17 LOL, Nothing Matters Chapter 18 January 28, 2021 Chapter 19 Men in Tights Chapter 20 January 29, 2021 Chapter 21 How Not to Stick It to the Man Chapter 22 February 2021 Chapter 23 The Same Old Game Bonus Round Acknowledgments Notes Index Introduction I’ll never forget the day I found out that my sons were degenerates.

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The COVID-19 pandemic was about to make scrolling through Reddit and trading stocks a lot more popular for young people, laying more of the groundwork for the meme-stock explosion. Another vital ingredient had fallen in October 2019 when every major broker cut its trading commissions to zero. Chapter 5 Race to the Bottom They called it “Mayday.” Following years of complaints, Washington had had enough of Wall Street’s foot-dragging over its longest-standing shibboleth. In 1973 securities regulators told brokers that they had to get rid of fixed stock-trading commissions that dated back to the eighteenth century.

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Various estimates put individual investors’ buying and selling of stocks at about 10 percent of the market’s total in 2019. Credit Suisse said that it had risen to between 15 percent and 18 percent in early 2020 and an astonishing 30 percent by early 2021 when the GameStop squeeze happened. The race to the bottom in costs coincided with the quality of some of the companies that novices embraced. Over-the-counter or penny stocks, a hotbed of shady companies called that because they are often quoted at a few cents or even less, saw an astounding trillion shares traded in December 2020—about fifty times the turnover of the regulated Nasdaq.

A Game as Old as Empire: The Secret World of Economic Hit Men and the Web of Global Corruption by Steven Hiatt; John Perkins

"RICO laws" OR "Racketeer Influenced and Corrupt Organizations", "World Economic Forum" Davos, accelerated depreciation, addicted to oil, airline deregulation, Andrei Shleifer, Asian financial crisis, Berlin Wall, big-box store, Bob Geldof, book value, Bretton Woods, British Empire, capital controls, centre right, clean water, colonial rule, corporate governance, corporate personhood, deglobalization, deindustrialization, disinformation, Doha Development Round, energy security, European colonialism, export processing zone, financial deregulation, financial independence, full employment, global village, high net worth, land bank, land reform, large denomination, liberal capitalism, Long Term Capital Management, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, military-industrial complex, moral hazard, Naomi Klein, new economy, North Sea oil, offshore financial centre, oil shock, Ponzi scheme, race to the bottom, reserve currency, Ronald Reagan, Scramble for Africa, Seymour Hersh, statistical model, structural adjustment programs, Suez crisis 1956, Tax Reform Act of 1986, too big to fail, trade liberalization, transatlantic slave trade, transfer pricing, union organizing, Washington Consensus, working-age population, Yom Kippur War

Instead, governing elites amass obscene fortunes while the poor shoulder the burden of paying off the debts. A former World Bank staffer, Steve Berkman presents an inside investigator’s account of how these schemes work to divert development money into the pockets of corrupt elites and their First World partners. 9 The Philippines, the World Bank, and the Race to the Bottom Ellen Augustine “Development” and “modernization” became code words for U.S. efforts to prop up the regime of President Ferdinand Marcos, with the World Bank serving as a conduit for the financing of Marcos’ dictatorship. Some 800 leaked documents from the World Bank itself tell how the Bank financed martial law and made the Philippines the test case for its export-led development strategy based on multinational corporations—with disastrous results for both democracy and economic development. 10 Exporting Destruction Bruce Rich Export credit agencies have quietly become the world’s largest financial institutions, backing $788 billion in trade in 2004.

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In “The World Bank and the $100 Billion Question,” Berkman provides an insider’s account of how and why the Bank looks the other way as corrupt elites steal funds intended for development aid. • In the 1970s, the Philippines were a showcase for the World Bank’s debt-based model of development and modernization. In “The Philippines, the World Bank, and the Race to the Bottom,” Ellen Augustine tells how billions in loans were central to U.S. efforts to prop up the Marcos dictatorship, with the World Bank serving as a conduit. • Export credit agencies have a single job: to enrich their countries’ corporations by making it easier for poor countries to buy their products and services.

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POSTSCRIPT: By the time Marcos was overthrown in 1986, the foreign debt of the Philippines exceeded $28 billion, including around $675 million in debts incurred by companies run by Marcos’ cronies and guaranteed by Philippine government institutions. As Ellen Augustine notes in chapter 9, “The Philippines, the World Bank, and the Race to the Bottom,” the Philippine people are still struggling to repay debt accumulated during the Marcos era. —S.H. 3 Offshore banking havens enable the extraction of $500 billion a year from the Third World–a flow of dirty money that has become essential to global elites. Dirty Money: Inside the Secret World of Offshore Banking John Christensen Kuala Lumpur, July 1985: Maybe it was the heat, or perhaps the Guinness and Courvoisier had dulled my senses, but something about what the man next to me was saying didn’t quite add up.

What Went Wrong: How the 1% Hijacked the American Middle Class . . . And What Other Countries Got Right by George R. Tyler

"Friedman doctrine" OR "shareholder theory", "World Economic Forum" Davos, 8-hour work day, active measures, activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, Alan Greenspan, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, benefit corporation, Black Swan, blood diamond, blue-collar work, Bolshevik threat, bonus culture, British Empire, business cycle, business process, buy and hold, capital controls, Carmen Reinhart, carried interest, cognitive dissonance, collateralized debt obligation, collective bargaining, commoditize, company town, compensation consultant, corporate governance, corporate personhood, corporate raider, corporate social responsibility, creative destruction, credit crunch, crony capitalism, crowdsourcing, currency manipulation / currency intervention, David Brooks, David Graeber, David Ricardo: comparative advantage, declining real wages, deindustrialization, Diane Coyle, disruptive innovation, Double Irish / Dutch Sandwich, eurozone crisis, financial deregulation, financial engineering, financial innovation, fixed income, Ford Model T, Francis Fukuyama: the end of history, full employment, George Akerlof, George Gilder, Gini coefficient, Glass-Steagall Act, Gordon Gekko, Greenspan put, hiring and firing, Ida Tarbell, income inequality, independent contractor, invisible hand, job satisfaction, John Markoff, joint-stock company, Joseph Schumpeter, junk bonds, Kenneth Rogoff, labor-force participation, laissez-faire capitalism, lake wobegon effect, light touch regulation, Long Term Capital Management, low interest rates, manufacturing employment, market clearing, market fundamentalism, Martin Wolf, minimum wage unemployment, mittelstand, Money creation, moral hazard, Myron Scholes, Naomi Klein, Northern Rock, obamacare, offshore financial centre, Paul Samuelson, Paul Volcker talking about ATMs, pension reform, performance metric, Pershing Square Capital Management, pirate software, plutocrats, Ponzi scheme, precariat, price stability, profit maximization, profit motive, prosperity theology / prosperity gospel / gospel of success, purchasing power parity, race to the bottom, Ralph Nader, rent-seeking, reshoring, Richard Thaler, rising living standards, road to serfdom, Robert Gordon, Robert Shiller, rolling blackouts, Ronald Reagan, Sand Hill Road, Savings and loan crisis, shareholder value, Silicon Valley, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, sovereign wealth fund, Steve Ballmer, Steve Jobs, stock buybacks, subprime mortgage crisis, The Chicago School, The Spirit Level, The Theory of the Leisure Class by Thorstein Veblen, The Wealth of Nations by Adam Smith, Thorstein Veblen, too big to fail, transcontinental railway, transfer pricing, trickle-down economics, tulip mania, Tyler Cowen, Tyler Cowen: Great Stagnation, union organizing, Upton Sinclair, upwardly mobile, women in the workforce, working poor, zero-sum game

The average down payment for first-time buyers fell from 10 percent in 1989 to a bare 2 percent by 2007.33 Deregulation added to the blaze. A majority of these unconventional loans came to be made by unregulated mortgage firms or S&Ls “not subject to routine supervision,” according to Barry Ritholtz, CEO of the quantitative research firm Fusion IQ.34 Stolid firms refusing to join this race to the bottom in credit standards were penalized with shrinking market share and falling share prices. Alan Greenspan’s fingerprints were everywhere as the housing bubble expanded before the 2004 election, including successfully urging Wall Street to expand home equity loans. Such loans to households totaled $1.79 trillion during 2003–2005, adding spending comparable to an astounding 6 percent of GDP annually, a nice fillip for the reelection campaign of President George W.

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It also proved to be a muscular antipoverty mechanism, setting a living wage floor sufficient to prevent abject family poverty. The logic of the minimum wage is straightforward: without a robust market for labor or a wage floor beneath them, history since the industrial revolution teaches that market forces produce a race to the bottom for wages. The American experience during my first years of work demonstrated how successful minimum wages can be. During its peak years in the late 1960s and early 1970s, America enjoyed the lowest poverty rates ever in its history (11.1 percent in 1973) and higher real wages than today. And the lowest recorded rate of childhood impoverishment ever in America was in 1969, at 13.8 percent.44 Most persuasive is that year after year in this period, America recorded among the lowest unemployment levels in postwar history despite the high minimum wage.

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But we know that not all Americans suffered. Its dynamic forces improved resource allocation, greatly expanded world trade, and became a wealth machine for a thin slice of America. That meant greater rewards to owners of capital, innovators, and the most skilled, whose shares of national income rose. But for others, a race to the bottom in wages ensued, with workers in Milwaukee, Brooklyn, and Dallas competing one-on-one with workers in Sri Lanka, New Delhi, and Shanghai. And the biggest losers have been less skilled workers and high-wage union shops targeted by the offshoring and wage compression features of Reaganomics. European economies are much more integrated and influenced by world trade than is America’s.

Making Globalization Work by Joseph E. Stiglitz

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Andrei Shleifer, Asian financial crisis, banking crisis, barriers to entry, benefit corporation, Berlin Wall, blood diamond, business process, capital controls, carbon tax, central bank independence, corporate governance, corporate social responsibility, currency manipulation / currency intervention, Doha Development Round, Exxon Valdez, Fall of the Berlin Wall, Firefox, full employment, Garrett Hardin, Gini coefficient, global reserve currency, Global Witness, Great Leap Forward, Gunnar Myrdal, happiness index / gross national happiness, illegal immigration, income inequality, income per capita, incomplete markets, Indoor air pollution, informal economy, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inventory management, invisible hand, John Markoff, Jones Act, Kenneth Arrow, Kenneth Rogoff, low interest rates, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, microcredit, moral hazard, negative emissions, new economy, North Sea oil, offshore financial centre, oil rush, open borders, open economy, price stability, profit maximization, purchasing power parity, quantitative trading / quantitative finance, race to the bottom, reserve currency, rising living standards, risk tolerance, Seymour Hersh, Silicon Valley, special drawing rights, statistical model, the market place, The Wealth of Nations by Adam Smith, Thomas L Friedman, trade liberalization, Tragedy of the Commons, trickle-down economics, union organizing, Washington Consensus, zero-sum game

The advanced industrial countries can help ensure transparency by simply saying: no one gets a tax deduction for money spent on royalties or other payments to foreign governments unless they fully disclose what was paid and how much of the resource in question was extracted. Without such a broad agreement, there will continue to be a race to the bottom, and the companies and countries most willing to engage in corrupt practices, and least willing to be transparent, will have an advantage over the others. 2. Reducing arms sales Even worse than corruption is the armed conflict that mineral and oil resources finance. Again, the international community could do more to make it more difficult and more expensive to acquire arms.

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Enforcement We have described a variety of good practices, ways in which developed countries can help the developing world ensure that citizens reap the benefits of the resources that lie within their countries—by enhancing transparency, discouraging bribery and corruption, and protecting the environment. But these measures cannot and should not be left to goodwill. The amounts of money at stake are too large, the incentives for a race to the bottom too great. There must be effective enforcement. Trade agreements can be used to force “good behavior.” Trade sanctions can be used against companies and countries that engage in unfair trade practices—and failing to subscribe to the extractive industries transparency initiative and other anti-bribery measures should be treated as an unfair trade practice.

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If one company leaves, another may not fill the gap—or if it does, it may demand even more unfavorable terms. Globalization has compounded the problems arising from the misalignment of incentives in modern corporations. Competition among developing countries to attract investment can result in a race to the bottom, as companies seek a home with the weakest labor and environmental laws. As the case of Bhopal illustrates, the ability to hide behind borders makes it even more difficult to hold corporations and their officers accountable. Furthermore, the speed with which assets can be moved from one country to another means that even if there is a monetary judgment against a firm in one country, it may be impossible to collect.

The Divide: A Brief Guide to Global Inequality and Its Solutions by Jason Hickel

"World Economic Forum" Davos, Alan Greenspan, Andrei Shleifer, Asian financial crisis, Atahualpa, Bartolomé de las Casas, Bernie Sanders, Bob Geldof, Bretton Woods, British Empire, Cape to Cairo, capital controls, carbon credits, carbon footprint, carbon tax, clean water, collective bargaining, colonial rule, Cornelius Vanderbilt, David Attenborough, David Graeber, David Ricardo: comparative advantage, declining real wages, degrowth, dematerialisation, Doha Development Round, Elon Musk, European colonialism, falling living standards, financial deregulation, flying shuttle, Fractional reserve banking, Francisco Pizarro, full employment, Glass-Steagall Act, Global Witness, Hans Rosling, happiness index / gross national happiness, Howard Zinn, income inequality, Intergovernmental Panel on Climate Change (IPCC), investor state dispute settlement, James Watt: steam engine, laissez-faire capitalism, land reform, land value tax, liberal capitalism, Live Aid, Mahatma Gandhi, Money creation, Monroe Doctrine, Mont Pelerin Society, moral hazard, Naomi Klein, negative emissions, Nelson Mandela, offshore financial centre, oil shale / tar sands, out of africa, Phillips curve, planned obsolescence, plutocrats, purchasing power parity, race to the bottom, rent control, road to serfdom, Ronald Reagan, Scramble for Africa, shareholder value, sharing economy, Silicon Valley, Simon Kuznets, structural adjustment programs, TED Talk, The Chicago School, The Spirit Level, trade route, transatlantic slave trade, transfer pricing, trickle-down economics, Washington Consensus, WikiLeaks, women in the workforce, Works Progress Administration

In fact, companies found they had the power to scan the globe in search not only of cheaper labour, but of the cheapest possible labour. And developing countries, in turn, found that in order to successfully attract foreign investment they had to compete with one another to drive wages down. It became a global ‘race to the bottom’ towards ever cheaper labour and ever lower standards. The solidarity that marked the rise of the South in the 1960s was suddenly replaced with cutthroat competition. In the countries of the G7, corporations gained the upper hand over their workers at last – at least in industries that were amenable to offshoring, like manufacturing.

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South Asia, where structural adjustment was not forcibly applied to the same extent, managed to shrink the inequality ratio during this period by 15 per cent, although the absolute gap between the per capita incomes of South Asia and the United States continued to grow.47 Source: World Development Indicators The race-to-the-bottom effect triggered by structural adjustment and globalisation is one of the main drivers behind this ever-widening gap. In the 1960s developing countries were losing $161 billion (in 2015 dollars) each year through what economists call ‘unequal exchange’, the difference between the real value of the goods that a developing country exports and the market prices that it gets for those goods.

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At the time of writing, the new Lord Mayor was lobbying hard to turn Kenya into a tax haven. The problem with tax havens is not only that they facilitate the theft of capital, or that they prevent governments from capturing revenues, but also that they induce what analysts call ‘tax competition’ or ‘tax warfare’. Tax havens have set off a kind of global race to the bottom, with countries competing to offer low tax rates to foreign investors in order to attract them in. This constant pressure to reduce taxes makes it very difficult for parliaments and governments to make rational decisions about tax legislation, or to plan their budgets into the future. Some economists nonetheless believe that the global tax haven system is justifiable according to neoliberal theory: they claim that money should be allowed to move freely around the world in search of the best tax rates.

Overdressed: The Shockingly High Cost of Cheap Fashion by Elizabeth L. Cline

big-box store, biodiversity loss, business cycle, clean water, East Village, export processing zone, feminist movement, high-speed rail, income inequality, informal economy, invention of the sewing machine, Maui Hawaii, McMansion, megacity, messenger bag, Multi Fibre Arrangement, race to the bottom, rolling blackouts, Skype, special economic zone, trade liberalization, Triangle Shirtwaist Factory, upwardly mobile, Veblen good

Anthony Lilore, a thirty-year veteran of the fashion industry and an advocate for Save the Garment Center, agrees that the increasing informalization of fashion has made consumers cheaper. “Fashion used to be tailored clothing, not bespoke, but a much more structured garment bought at department stores,” he says. “That men walk around in T-shirts and elastic waistband pants has very definitely impacted the notion of what fashion is and contributed to the race to the bottom.” The less skill involved in making our clothes, the cheaper it becomes, and the less we are willing to pay for it. The more basic clothes are, the less it matters where they’re made. A tank top can be made anywhere in the world. The same cannot be said of a well-made dress, which requires a highly skilled seamstress.

…

I could make a knockoff of what might just be a knockoff. Lily also gave me a price quote for the florette dress, $11. She said, “The cost is rising, but I will try my best to give you my best price because we are friends.” Over the past two decades, American consumers have accepted, and benefited from, the race to the bottom in fashion. The competition in garment manufacturing has been beyond fierce, with only those with the lowest prices surviving. According to some Chinese suppliers, net margins are still somewhere between 3 percent and 5 percent.1 Returned orders, cancellations, or lapses in the production lineup are common occurrences and they can all easily put a factory under.

…

Abuses and sweatshops still occur in the United States, but smaller production shops and a more locally minded industry focused on low-volume, better-made garments would improve accountability and correct some of fashion’s labor problems. Increasing the price of fashion would also help correct the race to the bottom in garment worker wages. “It’s a lot easier to keep an eye on what’s going on by keeping things local,” EPIC’s Tristan Scott says, although many of their designers produce in such small batches that the pieces are sewn in their own homes or personal studios. Some factory owners complain that state and federal labor laws are too strict, putting them at a competitive disadvantage.

Green Economics: An Introduction to Theory, Policy and Practice by Molly Scott Cato

Albert Einstein, back-to-the-land, banking crisis, banks create money, basic income, Bretton Woods, Buy land – they’re not making it any more, carbon footprint, carbon tax, central bank independence, clean water, Community Supported Agriculture, congestion charging, corporate social responsibility, David Ricardo: comparative advantage, degrowth, deskilling, energy security, food miles, Food sovereignty, Fractional reserve banking, full employment, gender pay gap, green new deal, income inequality, informal economy, intentional community, Intergovernmental Panel on Climate Change (IPCC), job satisfaction, land bank, land reform, land value tax, Mahatma Gandhi, market fundamentalism, Money creation, mortgage debt, Multi Fibre Arrangement, passive income, peak oil, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, reserve currency, Rupert Read, seminal paper, the built environment, The Spirit Level, Tobin tax, tontine, University of East Anglia, wikimedia commons

In the market for textiles, for example, there is fierce competition between poorer countries, which produce more than half the world’s textile exports and nearly three-quarters of its clothing exports.17 Producer countries enjoyed some protection through the 136 GREEN ECONOMICS Multi-Fibre Arrangement (originally negotiated by developed countries to protect their post-war markets against imports) until this was removed under WTO pressure at the end of 2004. This has led to the collapse of an important sector of production in countries whose workers were paid slightly more – the so-called ‘race to the bottom’ in production.18 From a development economics perspective and in a book with a strong focus on poverty alleviation, Tom Lines argues the case for a fundamental restructuring of commodities markets. He also suggests informal cooperation between poorer countries dependent on commodities to earn foreign exchange to increase their market power: For example, in May 2005 a new government in Ecuador (which exports more bananas than any other country) signed a decree to regulate the volume of bananas leaving the country.

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The erosion of wages, social welfare standards and environmental regulations for the sake of international trade. 3. The imposition world-wide of a consumer monoculture. Widely but falsely believed to be irreversible – See also financial meltdown, casino economy, Third World debt and 140 GREEN ECONOMICS race to the bottom (16th century: from colonialism, via development).1 This is, as Hines himself concedes, a blunt and indeed a savage critique. He sees globalization not as a positive move but rather as an economic delocalization or dismantling of local economies on a global basis. Woodin and Lucas refer to globalization as ‘the economics of insecurity’, making a strong case that it was a politically motivated project justified on the basis of economic efficiency but in reality operating for the benefit of transnational corporations or TNCs: There is plenty of evidence to show that the beneficiaries of this massive expansion in international trade are the transnational corporations (TNCs) that control it.

…

per cent of all fruit consumed in the UK now come from overseas.4 The problem for the proponents of localization is that the rules of the economic game are stacked against them. Although globalization has resulted in a single economy for sales, there is no global rate for wages, nor internationally agreed standards of employment or environmental protection. In such a world it is inevitable that there will be what critics of globalization refer to as a ‘race to the bottom’, where all production will shift to countries which have the lowest environmental and employment standards. The impossibility of competition between workers in Western economies, protected by minimum wage legislation, and those in the poorer nations is clear from the comparison of wage rates illustrated in Figure 9.2.

The Great Tax Robbery: How Britain Became a Tax Haven for Fat Cats and Big Business by Richard Brooks

accounting loophole / creative accounting, bank run, Big bang: deregulation of the City of London, bonus culture, Bretton Woods, carried interest, Celtic Tiger, collateralized debt obligation, commoditize, Corn Laws, corporate social responsibility, crony capitalism, cross-border payments, Double Irish / Dutch Sandwich, financial deregulation, financial engineering, haute couture, information security, intangible asset, interest rate swap, Jarndyce and Jarndyce, mega-rich, Northern Rock, offshore financial centre, race to the bottom, shareholder value, short selling, supply-chain management, The Chicago School, The Wealth of Nations by Adam Smith, transfer pricing, two and twenty

Corporation tax avoidance transactions dating from before 2004 but by now reaching the higher courts were regularly going the taxman’s way as judges reasserted the ‘Ramsay’ principle of looking at schemes in the round. Of the last eight such cases, the Revenue had won five. Income tax avoidance schemes were almost without exception being decided in the Revenue’s favour. But in the international taxation ‘race to the bottom’ that the government was keen to accelerate, an easy ride from the tax authorities was paraded as a competitive national advantage just like plummeting corporate tax rates and lax offshore avoidance laws. Treasury minister David Gauke spelt it out: ‘How companies experience the UK tax system is as important to tax competitiveness as the headline rates that we set.’‌36 Multinationals, he was pleased to report, were telling him that ‘HMRC compares very favourably’ with foreign tax authorities (small business would not have been so complimentary).‌37 The government and the country’s most senior tax inspector had become salesmen, and what they were selling was Britain’s tax system.

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They were to appear at a seminar hosted by notorious tax-dodger General Electric – represented by its UK tax director and chairman of the HMRC-Industry Business Tax Forum, Will Morris – at the right-wing American Enterprise Institute. The title was ‘UK Tax Reform: a Roadmap for the US?’ and it was part of a concerted campaign to get US tax rates and offshore tax rules reduced to something like the UK’s in the global race to the bottom. The international tax-slashing circus would not, of course, have been complete without the Oxford Business Centre’s Professor Devereux jetting in to provide his contribution. ‘We [the UK] have been quite fortunate in our leaders over a few years,’ he remarked by way of explanation for getting the offshore corporate tax breaks on the statute book.‌48 Or as Morris had put it a few months before: ‘We have business talking to government, we have government talking to advisers, we have everybody essentially trying to move in the same direction.’‌49 This was supposedly the modern way to make policy.

…

This, however, was precisely the opposite of what the British government was doing by effectively trashing its own CFC laws (as OECD tax chief Pascal Saint-Amans would point out to a US congressional committee in June 2013). This exposes the limitations of the OECD’s work. Most essential changes to the corporate tax system require domestic law changes and, however laudable the organisation’s pronouncements, there is no sign that these will be forthcoming. With the UK leading the race to the bottom on corporate tax, our government comprehensively undermines the international effort against multinationals’ tax avoidance. As Cameron waxed lyrical and the OECD beavered away, down at the British tax avoidance club the Treasury and Britain’s biggest tax avoiders were reshaping the law to frustrate their sentiments and intentions.

After the Gig: How the Sharing Economy Got Hijacked and How to Win It Back by Juliet Schor, William Attwood-Charles, Mehmet Cansoy

1960s counterculture, Airbnb, algorithmic management, Amazon Mechanical Turk, American Legislative Exchange Council, back-to-the-land, barriers to entry, bike sharing, Californian Ideology, carbon footprint, clean tech, collaborative consumption, collaborative economy, Community Supported Agriculture, COVID-19, creative destruction, crowdsourcing, deskilling, driverless car, en.wikipedia.org, financial independence, future of work, gentrification, George Gilder, gig economy, global supply chain, global village, haute cuisine, income inequality, independent contractor, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Jean Tirole, Jeff Bezos, jitney, job satisfaction, John Perry Barlow, John Zimmer (Lyft cofounder), Kevin Kelly, Lyft, Marshall McLuhan, Mason jar, mass incarceration, Mitch Kapor, Network effects, new economy, New Urbanism, Occupy movement, peer-to-peer rental, Post-Keynesian economics, precariat, profit maximization, profit motive, race to the bottom, regulatory arbitrage, rent gap, rent-seeking, ride hailing / ride sharing, Ruby on Rails, selection bias, sharing economy, Silicon Valley, Silicon Valley ideology, Skype, smart cities, social distancing, Stewart Brand, TaskRabbit, technological determinism, technoutopianism, Telecommunications Act of 1996, The Nature of the Firm, the payments system, Tragedy of the Commons, transaction costs, transportation-network company, Travis Kalanick, two-sided market, Uber and Lyft, Uber for X, uber lyft, urban planning, wage slave, walking around money, Whole Earth Catalog, women in the workforce, working poor, Yochai Benkler, Zipcar

He would get up early before anyone arrived, and go for a run, to maintain the fiction that he was just coming in from exercising and needed a shower. But, he explained, it’s “absolutely mentally exhausting to keep up all these projects and this farce about my living situation.” Josh felt that TaskRabbit is “actually really a race to the bottom.” He recounted one of his clients telling him, “It’s almost exploitative the things she can get people to do for ten dollars.” Josh had big plans for his future. He was going to learn the software program Ruby on Rails, which he was counting on to allow him to “walk right into a minimum $80,000 a year job.

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In sectors with low barriers to entry where the required skills are widely available, competition can become “ruinous” and result in poverty wages. That dynamic is the origin of taxi regulation and the basis on which driving became a viable occupation. By breaking the law, Uber and Lyft destroyed that viability, and we’re now seeing their drivers subjected to a similar race-to-the-bottom.27 And what the ideological high ground can’t accomplish, money can. The biggest platforms, again with Uber in the lead, have employed an army of lobbyists and public relations firms to fight even minor changes. In response to a modest proposed California law to fill the gap in insurance coverage when a driver has the app on but isn’t on a fare, Uber hired fourteen of the fifteen biggest Sacramento lobbying firms.28 In 2017 Uber and Lyft had more lobbyists than Amazon, Microsoft, and Walmart combined.29 Airbnb has also been active trying to stop laws that limit rental activity or mandate the collection of hotel and occupancy taxes.

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Robinson develops the concept of “regulatory breach,” by which platforms enroll people en masse and avoid contact with regulatory interfaces. Robinson (2017, chap. 4). 25. In addition to the discussion in chapter 1, see Collier et al. (2018) and Thelen (2018). 26. Horan (2017). 27. For an excellent account of how labor organizing in San Francisco prevented the race-to-the-bottom before the 1930s, and how Uber has degraded drivers, see V. B. Dubal (2017b). 28. Collier et al. (2018, 927). 29. Borkholder et al. (2018). 30. Ulrik Binzer, CEO of Host Compliance, quoted in Martineau (2019). 31. Martineau (2019). 32. Martineau (2019). 33. Gilmore (2018). 34. Borkholder et al. (2018) provide a comprehensive study of preemption.

Democracy and Prosperity: Reinventing Capitalism Through a Turbulent Century by Torben Iversen, David Soskice

Andrei Shleifer, assortative mating, augmented reality, barriers to entry, Big Tech, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, central bank independence, centre right, clean tech, cloud computing, collateralized debt obligation, collective bargaining, colonial rule, confounding variable, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, deindustrialization, deskilling, Donald Trump, first-past-the-post, full employment, general purpose technology, gentrification, Gini coefficient, hiring and firing, implied volatility, income inequality, industrial cluster, inflation targeting, invisible hand, knowledge economy, labor-force participation, liberal capitalism, low skilled workers, low-wage service sector, means of production, middle-income trap, mirror neurons, mittelstand, Network effects, New Economic Geography, new economy, New Urbanism, non-tariff barriers, Occupy movement, offshore financial centre, open borders, open economy, passive investing, precariat, race to the bottom, radical decentralization, rent-seeking, RFID, road to serfdom, Robert Bork, Robert Gordon, Silicon Valley, smart cities, speech recognition, tacit knowledge, The Future of Employment, The Great Moderation, The Rise and Fall of American Growth, the strength of weak ties, too big to fail, trade liberalization, union organizing, urban decay, vertical integration, Washington Consensus, winner-take-all economy, working-age population, World Values Survey, young professional, zero-sum game

This does not imply support for a particular party, left or right, but instead that electable parties have a reputation for effective management of advanced economies. (iii) Advanced capital is geographically embedded in the advanced nation-state rather than footloose: The third element of our approach rules out “race to the bottom” welfare states and/or imposition of subsistence wages in the advanced sectors, and more generally it also justifies advanced governments making huge investments in education, training, and research, which footloose companies might otherwise carry abroad perhaps with their skilled workforces.

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Trade therefore also entrenches and facilitates cross-national differences in institutions, and this is reinforced by foreign direct investment. We see more tendencies toward convergence in nontraded, low-wage service sectors where flexibilization of labor contracts is a common trend in the past two decades. Still, most evidence confirms that there have not been races to the bottom in redistribution or corporate tax rates. Moreover, in all these cases differential outcomes are determined in our analysis by domestic political coalitions. Thus we conclude that it is to be expected that governments of advanced countries with strong advanced capitalist sectors are the dominant powers in the contemporary world—not the EU, nor multinationals, nor transnational standard-setters, public or private. 6.

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To be sure, the implications of European integration have been complex, even contradictory. For some it has been seen as a way of introducing the chill winds of competition and intensifying the pressure to deregulate and eliminate the excesses of the welfare state, while for others it has been seen as a way of halting the race to the bottom. What is important here is that integration supported labor market decentralization. By eliminating capital controls and making realignments more difficult, the EMS solidified the exchange-rate commitment and the credibility of the non-accommodating monetary policies needed to restrain wage demands in more decentralized labor markets.

Who Owns the Future? by Jaron Lanier

3D printing, 4chan, Abraham Maslow, Affordable Care Act / Obamacare, Airbnb, augmented reality, automated trading system, barriers to entry, bitcoin, Black Monday: stock market crash in 1987, book scanning, book value, Burning Man, call centre, carbon credits, carbon footprint, cloud computing, commoditize, company town, computer age, Computer Lib, crowdsourcing, data science, David Brooks, David Graeber, delayed gratification, digital capitalism, digital Maoism, digital rights, Douglas Engelbart, en.wikipedia.org, Everything should be made as simple as possible, facts on the ground, Filter Bubble, financial deregulation, Fractional reserve banking, Francis Fukuyama: the end of history, Garrett Hardin, George Akerlof, global supply chain, global village, Haight Ashbury, hive mind, if you build it, they will come, income inequality, informal economy, information asymmetry, invisible hand, Ivan Sutherland, Jaron Lanier, Jeff Bezos, job automation, John Markoff, John Perry Barlow, Kevin Kelly, Khan Academy, Kickstarter, Kodak vs Instagram, life extension, Long Term Capital Management, machine translation, Marc Andreessen, Mark Zuckerberg, meta-analysis, Metcalfe’s law, moral hazard, mutually assured destruction, Neal Stephenson, Network effects, new economy, Norbert Wiener, obamacare, off-the-grid, packet switching, Panopticon Jeremy Bentham, Peter Thiel, place-making, plutocrats, Ponzi scheme, post-oil, pre–internet, Project Xanadu, race to the bottom, Ray Kurzweil, rent-seeking, reversible computing, Richard Feynman, Ronald Reagan, scientific worldview, self-driving car, side project, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, Skype, smart meter, stem cell, Steve Jobs, Steve Wozniak, Stewart Brand, synthetic biology, tech billionaire, technological determinism, Ted Nelson, The Market for Lemons, Thomas Malthus, too big to fail, Tragedy of the Commons, trickle-down economics, Turing test, Vannevar Bush, WikiLeaks, zero-sum game

Those who take assignments through it often seem to even enjoy the fun of emulating an intelligent machine for someone else’s profit.1 The charade has a triply dismal quality. Of course there is the “race to the bottom” process that lowers wages absolutely as much as possible,2 making temp jobs in the fast-food industry seem like social climbing on-ramps in comparison. Yet there are people ready to step up and take such roles. More than a few recruits appear to be the live-at-home kids of middle-class Americans, whiling away their time.3 Whenever there is a networked race to the bottom, there is a Siren Server that connects people and owns the master database about who they are. If they knew each other, comprehensively, they might organize a union or some other form of levee.

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The more interests a person perceives in common with others, even when commonalities are best illuminated by theatrical effects, the more likely the market will function well, and grow. The psychology of a social contract will eventually take hold. In isolation, economic symmetry might pose a risk of a race to the bottom. Wouldn’t everyone initially want stuff for free, and then never be able to compete with the expectation of free stuff from others in order to start charging? This is approximately what happens when a traditional economy stalls and falls into a depression. Recall, though, the “legacy” portion of the calculation of price described earlier.

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., 75, 91, 266–67 New York Times, 109 Nobel Prize, 40, 118, 143n nodes, network, 156, 227, 230, 241–43, 350 “no free lunch” principle, 55–56, 59–60 nondeterministic music, 23n nonlinear solutions, 149–50 nonprofit share sites, 59n, 94–95 nostalgia, 129–32 NRO, 199–200 nuclear power, 133 nuclear weapons, 127, 296 nursing, 97–100, 123, 296n nursing homes, 97–100, 269 Obama, Barack, 79, 100 “Obamacare,” 100n obsolescence, 89, 95 oil resources, 43, 133 online stores, 171 Ono, Yoko, 212 ontologies, 124n, 196 open-source applications, 206, 207, 272, 310–11 optical illusions, 121 optimism, 32–35, 45, 130, 138–40, 218, 230n, 295 optimization, 144–47, 148, 153, 154–55, 167, 202, 203 Oracle, 265 Orbitz, 63, 64, 65 organ donors, 190, 191 ouroboros, 154 outcomes, economic, 40–41, 144–45 outsourcing, 177–78, 185 Owens, Buck, 256 packet switching, 228–29 Palmer, Amanda, 186–87 Pandora, 192 panopticons, 308 papacy, 190 paper money, 34n parallel computers, 147–48, 149, 151 paranoia, 309 Parrish, Maxfield, 214 particle interactions, 196 party machines, 202 Pascal, Blaise, 132, 139 Pascal’s Wager, 139 passwords, 307, 309 “past-oriented money,” 29–31, 35, 284–85 patterns, information, 178, 183, 184, 188–89 Paul, Ron, 33n Pauli exclusion principle, 181, 202 PayPal, 60, 93, 326 peasants, 565 pensions, 95, 99 Perestroika (Kushner), 165 “perfect investments,” 59–67, 77–78 performances, musical, 47–48, 51, 186–87, 253 perpetual motion, 55 Persian Gulf, 86 personal computers (PCs), 158, 182n, 214, 223, 229 personal information systems, 110, 312–16, 317 Pfizer, 265 pharmaceuticals industry, 66–67, 100–106, 123, 136, 203 philanthropy, 117 photography, 53, 89n, 92, 94, 309–11, 318, 319, 321 photo-sharing services, 53 physical trades, 292 physicians, 66–67 physics, 88, 153n, 167n Picasso, Pablo, 108 Pinterest, 180–81, 183 Pirate Party, 49, 199, 206, 226, 253, 284, 318 placebos, 112 placement fees, 184 player pianos, 160–61 plutocracy, 48, 291–94, 355 police, 246, 310, 311, 319–21, 335 politics, 13–18, 21, 22–25, 47–48, 85, 122, 124–26, 128, 134–37, 149–51, 155, 167, 199–234, 295–96, 342 see also conservatism; liberalism; libertarianism Ponzi schemes, 48 Popper, Karl, 189n popular culture, 111–12, 130, 137–38, 139, 159 “populating the stack,” 273 population, 17, 34n, 86, 97–100, 123, 125, 132, 133, 269, 296n, 325–26, 346 poverty, 37–38, 42, 44, 53–54, 93–94, 137, 148, 167, 190, 194, 253, 256, 263, 290, 291–92 power, personal, 13–15, 53, 60, 62–63, 86, 114, 116, 120, 122, 158, 166, 172–73, 175, 190, 199, 204, 207, 208, 278–79, 290, 291, 302–3, 308–9, 314, 319, 326, 344, 360 Presley, Elvis, 211 Priceline, 65 pricing strategies, 1–2, 43, 60–66, 72–74, 145, 147–48, 158, 169–74, 226, 261, 272–75, 289, 317–24, 331, 337–38 printers, 90, 99, 154, 162, 212, 269, 310–11, 316, 331, 347, 348, 349 privacy, 1–2, 11, 13–15, 25, 50–51, 64, 99, 108–9, 114–15, 120–21, 152, 177n, 199–200, 201, 204, 206–7, 234–35, 246, 272, 291, 305, 309–13, 314, 315–16, 317, 319–24 privacy rights, 13–15, 25, 204, 305, 312–13, 314, 315–16, 321–22 product design and development, 85–89, 117–20, 128, 136–37, 145, 154, 236 productivity, 7, 56–57, 134–35 profit margins, 59n, 71–72, 76–78, 94–95, 116, 177n, 178, 179, 207, 258, 274–75, 321–22 progress, 9–18, 20, 21, 37, 43, 48, 57, 88, 98, 123, 124–40, 130–37, 256–57, 267, 325–31, 341–42 promotions, 62 property values, 52 proprietary hardware, 172 provenance, 245–46, 247, 338 pseudo-asceticism, 211–12 public libraries, 293 public roads, 79–80 publishers, 62n, 92, 182, 277–78, 281, 347, 352–60 punishing vs. rewarding network effects, 169–74, 182, 183 quants, 75–76 quantum field theory, 167n, 195 QuNeo, 117, 118, 119 Rabois, Keith, 185 “race to the bottom,” 178 radiant risk, 61–63, 118–19, 120, 156, 183–84 Ragnarok, 30 railroads, 43, 172 Rand, Ayn, 167, 204 randomness, 143 rationality, 144 Reagan, Ronald, 149 real estate, 33, 46, 49–52, 61, 78, 95–96, 99, 193, 224, 227, 239, 245, 255, 274n, 289n, 296, 298, 300, 301 reality, 55–56, 59–60, 124n, 127–28, 154–56, 161, 165–68, 194–95, 203–4, 216–17, 295–303, 364–65 see also Virtual Reality (VR) reason, 195–96 recessions, economic, 31, 54, 60, 76–77, 79, 151–52, 167, 204, 311, 336–37 record labels, 347 recycling, 88, 89 Reddit, 118n, 186, 254 reductionism, 184 regulation, economic, 37–38, 44, 45–46, 49–50, 54, 56, 69–70, 77–78, 266n, 274, 299–300, 311, 321–22, 350–51 relativity theory, 167n religion, 124–25, 126, 131, 139, 190, 193–95, 211–17, 293, 300n, 326 remote computers, 11–12 rents, 144 Republican Party, 79, 202 research and development, 40–45, 85–89, 117–20, 128, 136–37, 145, 154, 215, 229–30, 236 retail sector, 69, 70–74, 95–96, 169–74, 272, 349–51, 355–56 retirement, 49, 150 revenue growth plans, 173n revenues, 149, 149, 150, 151, 173n, 225, 234–35, 242, 347–48 reversible computers, 143n revolutions, 199, 291, 331 rhythm, 159–62 Rich Dad, Poor Dad (Kiyosaki), 46 risk, 54, 55, 57, 59–63, 71–72, 85, 117, 118–19, 120, 156, 170–71, 179, 183–84, 188, 242, 277–81, 284, 337, 350 externalization of, 59n, 117, 277–81 risk aversion, 188 risk pools, 277–81, 284 risk radiation, 61–63, 118–19, 120, 156, 183–84 robo call centers, 177n robotic cars, 90–92 robotics, robots, 11, 12, 17, 23, 42, 55, 85–86, 90–92, 97–100, 111, 129, 135–36, 155, 157, 162, 260, 261, 269, 296n, 342, 359–60 Roman Empire, 24–25 root nodes, 241 Rousseau, Jean-Jacques, 129 Rousseau humor, 126, 129, 130–31 routers, 171–72 royalties, 47, 240, 254, 263–64, 323, 338 Rubin, Edgar, 121 rupture, 66–67 salaries, 10, 46–47, 50–54, 152, 178, 270–71, 287–88, 291–94, 338–39, 365 sampling, 71–72, 191, 221, 224–26, 259 San Francisco, University of, 190 satellites, 110 savings, 49, 72–74 scalable solutions, 47 scams, 119–21, 186, 275n, 287–88, 299–300 scanned books, 192, 193 SceneTap, 108n Schmidt, Eric, 305n, 352 Schwartz, Peter, 214 science fiction, 18, 126–27, 136, 137–38, 139, 193, 230n, 309, 356n search engines, 51, 60, 70, 81, 120, 191, 267, 289, 293 Second Life, 270, 343 Secret, The (Byrne), 216 securitization, 76–78, 99, 289n security, 14–15, 175, 239–40, 305–8, 345 self-actualization, 211–17 self-driving vehicles, 90–92, 98, 311, 343, 367 servants, 22 servers, 12n, 15, 31, 53–57, 71–72, 95–96, 143–44, 171, 180, 183, 206, 245, 358 see also Siren Servers “Sexy Sadie,” 213 Shakur, Tupac, 329 Shelley, Mary, 327 Short History of Progress, A (Wright), 132 “shrinking markets,” 66–67 shuttles, 22, 23n, 24 signal-processing algorithms, 76–78, 148 silicon chips, 10, 86–87 Silicon Valley, 12, 13, 14, 21, 34n, 56, 59, 60, 66–67, 70, 71, 75–76, 80, 93, 96–97, 100, 102, 108n, 125n, 132, 136, 154, 157, 162, 170, 179–89, 192, 193, 200, 207, 210, 211–18, 228, 230, 233, 258, 275n, 294, 299–300, 325–31, 345, 349, 352, 354–58 singularity, 22–25, 125, 215, 217, 327–28, 366, 367 Singularity University, 193, 325, 327–28 Sirenic Age, 66n, 354 Siren Servers, 53–57, 59, 61–64, 65, 66n, 69–78, 82, 91–99, 114–19, 143–48, 154–56, 166–89, 191, 200, 201, 203, 210n, 216, 235, 246–50, 258, 259, 269, 271, 272, 280, 285, 289, 293–94, 298, 301, 302–3, 307–10, 314–23, 326, 336–51, 354, 365, 366 Siri, 95 skilled labor, 99–100 Skout, 280n Skype, 95, 129 slavery, 22, 23, 33n Sleeper, 130 small businesses, 173 smartphones, 34n, 39, 162, 172, 192, 269n, 273 Smith, Adam, 121, 126 Smolin, Lee, 148n social contract, 20, 49, 247, 284, 288, 335, 336 social engineering, 112–13, 190–91 socialism, 14, 128, 254, 257, 341n social mobility, 66, 97, 292–94 social networks, 18, 51, 56, 60, 70, 81, 89, 107–9, 113, 114, 129, 167–68, 172–73, 179, 180, 190, 199, 200–201, 202, 204, 227, 241, 242–43, 259, 267, 269n, 274–75, 280n, 286, 307–8, 317, 336, 337, 343, 349, 358, 365–66 see also Facebook social safety nets, 10, 44, 54, 202, 251, 293 Social Security, 251, 345 software, 7, 9, 11, 14, 17, 68, 86, 99, 100–101, 128, 129, 147, 154, 155, 165, 172–73, 177–78, 182, 192, 234, 236, 241–42, 258, 262, 273–74, 283, 331, 347, 357 software-mediated technology, 7, 11, 14, 86, 100–101, 165, 234, 236, 258, 347 South Korea, 133 Soviet Union, 70 “space elevator pitch,” 233, 342, 361 space travel, 233, 266 Spain, 159–60 spam, 178, 275n spending levels, 287–88 spirituality, 126, 211–17, 325–31, 364 spreadsheet programs, 230 “spy data tax,” 234–35 Square, 185 Stalin, Joseph, 125n Stanford Research Institute (SRI), 215 Stanford University, 60, 75, 90, 95, 97, 101, 102, 103, 162, 325 Starr, Ringo, 256 Star Trek, 138, 139, 230n startup companies, 39, 60, 69, 93–94, 108n, 124n, 136, 179–89, 265, 274n, 279–80, 309–10, 326, 341, 343–45, 348, 352, 355 starvation, 123 Star Wars, 137 star (winner-take-all) system, 38–43, 50, 54–55, 204, 243, 256–57, 263, 329–30 statistics, 11, 20, 71–72, 75–78, 90–91, 93, 110n, 114–15, 186, 192 “stickiness,” 170, 171 stimulus, economic, 151–52 stoplights, 90 Strangelove humor, 127 student debt, 92, 95 “Study 27,” 160 “Study 36,” 160 Sumer, 29 supergoop, 85–89 supernatural phenomena, 55, 124–25, 127, 132, 192, 194–95, 300 supply chain, 70–72, 174, 187 Supreme Court, U.S., 104–5 surgery, 11–13, 17, 18, 98, 157–58, 363 surveillance, 1–2, 11, 14, 50–51, 64, 71–72, 99, 108–9, 114–15, 120–21, 152, 177n, 199–200, 201, 206–7, 234–35, 246, 272, 291, 305, 309–11, 315, 316, 317, 319–24 Surviving Progress, 132 sustainable economies, 235–37, 285–87 Sutherland, Ivan, 221 swarms, 99, 109 synthesizers, 160 synthetic biology, 162 tablets, 85, 86, 87, 88, 113, 162, 229 Tahrir Square, 95 Tamagotchis, 98 target ads, 170 taxation, 44, 45, 49, 52, 60, 74–75, 77, 82, 149, 149, 150, 151, 202, 210, 234–35, 263, 273, 289–90 taxis, 44, 91–92, 239, 240, 266–67, 269, 273, 311 Teamsters, 91 TechCrunch, 189 tech fixes, 295–96 technical schools, 96–97 technologists (“techies”), 9–10, 15–16, 45, 47–48, 66–67, 88, 122, 124, 131–32, 134, 139–40, 157–62, 165–66, 178, 193–94, 295–98, 307, 309, 325–31, 341, 342, 356n technology: author’s experience in, 47–48, 62n, 69–72, 93–94, 114, 130, 131–32, 153, 158–62, 178, 206–7, 228, 265, 266–67, 309–10, 325, 328, 343, 352–53, 362n, 364, 365n, 366 bio-, 11–13, 17, 18, 109–10, 162, 330–31 chaos and, 165–66, 273n, 331 collusion in, 65–66, 72, 169–74, 255, 350–51 complexity of, 53–54 costs of, 8, 18, 72–74, 87n, 136–37, 170–71, 176–77, 184–85 creepiness of, 305–24 cultural impact of, 8–9, 21, 23–25, 53, 130, 135–40 development and emergence of, 7–18, 21, 53–54, 60–61, 66–67, 85–86, 87, 97–98, 129–38, 157–58, 182, 188–90, 193–96, 217 digital, 2–3, 7–8, 15–16, 18, 31, 40, 43, 50–51, 132, 208 economic impact of, 1–3, 15–18, 29–30, 37, 40, 53–54, 60–66, 71–74, 79–110, 124, 134–37, 161, 162, 169–77, 181–82, 183, 184–85, 218, 254, 277–78, 298, 335–39, 341–51, 357–58 educational, 92–97 efficiency of, 90, 118, 191 employment in, 56–57, 60, 71–74, 79, 123, 135, 178 engineering for, 113–14, 123–24, 192, 194, 217, 218, 326 essential vs. worthless, 11–12 failure of, 188–89 fear of (technophobia), 129–32, 134–38 freedom as issue in, 32–33, 90–92, 277–78, 336 government influence in, 158, 199, 205–6, 234–35, 240, 246, 248–51, 307, 317, 341, 345–46, 350–51 human agency and, 8–21, 50–52, 85, 88, 91, 124–40, 144, 165–66, 175–78, 191–92, 193, 217, 253–64, 274–75, 283–85, 305–6, 328, 341–51, 358–60, 361, 362, 365–67 ideas for, 123, 124, 158, 188–89, 225, 245–46, 286–87, 299, 358–60 industrial, 49, 83, 85–89, 123, 132, 154, 343 information, 7, 32–35, 49, 66n, 71–72, 109, 110, 116, 120, 125n, 126, 135, 136, 254, 312–16, 317 investment in, 66, 181, 183, 184, 218, 277–78, 298, 348 limitations of, 157–62, 196, 222 monopolies for, 60, 65–66, 169–74, 181–82, 187–88, 190, 202, 326, 350 morality and, 50–51, 72, 73–74, 188, 194–95, 262, 335–36 motivation and, 7–18, 85–86, 97–98, 216 nano-, 11, 12, 17, 162 new vs. old, 20–21 obsolescence of, 89, 97 political impact of, 13–18, 22–25, 85, 122, 124–26, 128, 134–37, 199–234, 295–96, 342 progress in, 9–18, 20, 21, 37, 43, 48, 57, 88, 98, 123, 124–40, 130–37, 256–57, 267, 325–31, 341–42 resources for, 55–56, 157–58 rupture as concept in, 66–67 scams in, 119–21, 186, 275n, 287–88, 299–300 singularity of, 22–25, 125, 215, 217, 327–28, 366, 367 social impact of, 9–21, 124–40, 167n, 187, 280–81, 310–11 software-mediated, 7, 11, 14, 86, 100–101, 165, 234, 236, 258, 347 startup companies in, 39, 60, 69, 93–94, 108n, 124n, 136, 179–89, 265, 274n, 279–80, 309–10, 326, 341, 343–45, 348, 352, 355 utopian, 13–18, 21, 31, 37–38, 45–46, 96, 128, 130, 167, 205, 207, 265, 267, 270, 283, 290, 291, 308–9, 316 see also specific technologies technophobia, 129–32, 134–38 television, 86, 185–86, 191, 216, 267 temperature, 56, 145 Ten Commandments, 300n Terminator, The, 137 terrorism, 133, 200 Tesla, Nikola, 327 Texas, 203 text, 162, 352–60 textile industry, 22, 23n, 24, 135 theocracy, 194–95 Theocracy humor, 124–25 thermodynamics, 88, 143n Thiel, Peter, 60, 93, 326 thought experiments, 55, 139 thought schemas, 13 3D printers, 7, 85–89, 90, 99, 154, 162, 212, 269, 310–11, 316, 331, 347, 348, 349 Thrun, Sebastian, 94 Tibet, 214 Time Machine, The (Wells), 127, 137, 261, 331 topology, network, 241–43, 246 touchscreens, 86 tourism, 79 Toyota Prius, 302 tracking services, 109, 120–21, 122 trade, 29 traffic, 90–92, 314 “tragedy of the commons,” 66n Transformers, 98 translation services, 19–20, 182, 191, 195, 261, 262, 284, 338 transparency, 63–66, 74–78, 118, 176, 190–91, 205–6, 278, 291, 306–9, 316, 336 transportation, 79–80, 87, 90–92, 123, 258 travel agents, 64 Travelocity, 65 travel sites, 63, 64, 65, 181, 279–80 tree-shaped networks, 241–42, 243, 246 tribal dramas, 126 trickle-down effect, 148–49, 204 triumphalism, 128, 157–62 tropes (humors), 124–40, 157, 170, 230 trust, 32–34, 35, 42, 51–52 Turing, Alan, 127–28, 134 Turing’s humor, 127–28, 191–94 Turing Test, 330 Twitter, 128, 173n, 180, 182, 188, 199, 200n, 201, 204, 245, 258, 259, 349, 365n 2001: A Space Odyssey, 137 two-way links, 1–2, 227, 245, 289 underemployment, 257–58 unemployment, 7–8, 22, 79, 85–106, 117, 151–52, 234, 257–58, 321–22, 331, 343 “unintentional manipulation,” 144 United States, 25, 45, 54, 79–80, 86, 138, 199–204 universities, 92–97 upper class, 45, 48 used car market, 118–19 user interface, 362–63, 364 utopianism, 13–18, 21, 30, 31, 37–38, 45–46, 96, 128, 130, 167, 205, 207, 265, 267, 270, 283, 290, 291, 308–9, 316 value, economic, 21, 33–35, 52, 61, 64–67, 73n, 108, 283–90, 299–300, 321–22, 364 value, information, 1–3, 15–16, 20, 210, 235–43, 257–58, 259, 261–63, 271–75, 321–24, 358–60 Values, Attitudes, and Lifestyles (VALS), 215 variables, 149–50 vendors, 71–74 venture capital, 66, 181, 218, 277–78, 298, 348 videos, 60, 100, 162, 185–86, 204, 223, 225, 226, 239, 240, 242, 245, 277, 287, 329, 335–36, 349, 354, 356 Vietnam War, 353n vinyl records, 89 viral videos, 185–86 Virtual Reality (VR), 12, 47–48, 127, 129, 132, 158, 162, 214, 283–85, 312–13, 314, 315, 325, 343, 356, 362n viruses, 132–33 visibility, 184, 185–86, 234, 355 visual cognition, 111–12 VitaBop, 100–106, 284n vitamins, 100–106 Voice, The, 185–86 “voodoo economics,” 149 voting, 122, 202–4, 249 Wachowski, Lana, 165 Wall Street, 49, 70, 76–77, 181, 184, 234, 317, 331, 350 Wal-Mart, 69, 70–74, 89, 174, 187, 201 Warhol, Andy, 108 War of the Worlds, The (Wells), 137 water supplies, 17, 18 Watts, Alan, 211–12 Wave, 189 wealth: aggregate or concentration of, 9, 42–43, 53, 60, 61, 74–75, 96, 97, 108, 115, 148, 157–58, 166, 175, 201, 202, 208, 234, 278–79, 298, 305, 335, 355, 360 creation of, 32, 33–34, 46–47, 50–51, 57, 62–63, 79, 92, 96, 120, 148–49, 210, 241–43, 270–75, 291–94, 338–39, 349 inequalities and redistribution of, 20, 37–45, 65–66, 92, 97, 144, 254, 256–57, 274–75, 286–87, 290–94, 298, 299–300 see also income levels weather forecasting, 110, 120, 150 weaving, 22, 23n, 24 webcams, 99, 245 websites, 80, 170, 200, 201, 343 Wells, H.

We the Corporations: How American Businesses Won Their Civil Rights by Adam Winkler

"Friedman doctrine" OR "shareholder theory", 1960s counterculture, affirmative action, Affordable Care Act / Obamacare, anti-communist, Bernie Sanders, British Empire, Cass Sunstein, clean water, collective bargaining, company town, Cornelius Vanderbilt, corporate governance, corporate personhood, corporate social responsibility, desegregation, Donald Trump, financial innovation, Ford Model T, glass ceiling, income inequality, invisible hand, joint-stock company, laissez-faire capitalism, land reform, obamacare, offshore financial centre, plutocrats, Powell Memorandum, profit maximization, profit motive, race to the bottom, Ralph Nader, Ralph Waldo Emerson, refrigerator car, Robert Bork, Ronald Reagan, Rosa Parks, shareholder value, Social Responsibility of Business Is to Increase Its Profits, South Sea Bubble, the scientific method, too big to fail, trade route, transcontinental railway, Unsafe at Any Speed, Upton Sinclair, vertical integration, yellow journalism

Bostwick noted that “so many trusts and big corporations were paying tribute to the State of New Jersey that the authorities had become greatly perplexed as to what should be done with the surplus revenue.”15 STANDARD OIL FORMED AN IMMENSELY SUCCESSFUL TRUST, AND EFFORTS TO BREAK UP THE TRUSTS WOULD LEAD TO THE EXPANSION OF CORPORATE RIGHTS. Decades later, long after the trusts had been defeated, some corporate law scholars would argue that New Jersey’s reforms were the beginning of a “race to the bottom.” States seeking the revenue from incorporation fees continually made corporate law more permissive, which attracted corporate executives freed up by the new rules. Over time, the traditional corporate law doctrines limiting the power of corporate officers were rendered largely meaningless; corporate law became mainly a template that private parties could use to organize their affairs.

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Even though the boards of the major insurance companies were a “Who’s Who” of New York financial, business, and political elites, the directors acted powerless. “In fine,” the Nation observed, “directors do not direct.”27 Had the policyholders somehow overcome their collective action problem, they faced a series of other hurdles created by the recent corporate law reforms. The “race to the bottom” that began when New Jersey loosened its laws to lure reincorporation by large corporations, like Standard Oil and American Tobacco, translated into increasingly lax rules of corporate governance. Older rules that held managers liable for negligent decision-making were replaced by the “business judgment rule,” which effectively immunized management from liability for bad decisions so long as those decisions were made in good faith to serve the business.

…

Prior to becoming the chief justice of Delaware, Strine served for sixteen years on Delaware’s Court of Chancery, the nation’s leading court for corporate law. Delaware, with over 60 percent of Fortune 500 companies and more than 900,000 businesses incorporated in the state, had won the so-called “race to the bottom” begun at the end of the nineteenth century when New Jersey loosened its laws to attract Rockefeller’s Standard Oil and other trusts. Although New Jersey eventually strengthened its corporate code, Delaware followed the Garden State’s earlier example and continually made its corporate law rules more permissive and friendly to management, becoming the leading state of choice for America’s corporations.

Days of Destruction, Days of Revolt by Chris Hedges, Joe Sacco

Berlin Wall, Bernie Sanders, clean water, collective bargaining, company town, corporate personhood, dumpster diving, Easter island, Exxon Valdez, food desert, Goldman Sachs: Vampire Squid, Howard Zinn, Intergovernmental Panel on Climate Change (IPCC), invisible hand, laissez-faire capitalism, Mahatma Gandhi, mass immigration, mass incarceration, Naomi Klein, Nelson Mandela, Occupy movement, oil shale / tar sands, race to the bottom, Ralph Nader, Silicon Valley, Steve Jobs, strikebreaker, union organizing, urban decay, wage slave, white flight, women in the workforce

Is 25 minutes after two. There is a few of us alive yet. Jake and Elbert. Oh God for one more breath. Ellen remember me as long as you live. Goodbye darling.” 4 DAYS OF SLAVERY Immokalee, Florida In America today we are seeing a race to the bottom, the middle class is collapsing, poverty is increasing. What I saw in Immokalee is the bottom in the race to the bottom. —SENATOR BERNIE SANDERS Hoping for work in the La Fiesta parking lot, Immokalee, Florida. RODRIGO ORTIZ, A TWENTY-SIX-YEAR-OLD FARMWORKER—A SHORT man in a tattered baseball cap and soiled black pants that are too long—stands forlornly in the half-light in front of the La Fiesta Supermarket on South 3rd Street in Immokalee, Florida.

…

We are starting to see labor trafficking in the garment industry and in hotels and construction. It devolves. I’m surprised it hasn’t happened in meatpacking, where salaries have also gotten lower and the benefits have gotten worse. I had hoped that agriculture would become more like other industries, but I fear that in our race to the bottom other industries are beginning to resemble agriculture. The advances made by the Coalition of Immokalee Workers on behalf of the tomato workers, however, are among the few bright spots in the nation’s agricultural fields, advances made outside the formal structures of power by the workers themselves.

We Need New Stories: Challenging the Toxic Myths Behind Our Age of Discontent by Nesrine Malik

"World Economic Forum" Davos, affirmative action, Affordable Care Act / Obamacare, barriers to entry, Bernie Sanders, Black Lives Matter, Boris Johnson, Brexit referendum, British Empire, centre right, cognitive dissonance, continuation of politics by other means, currency peg, disinformation, Donald Trump, fake news, feminist movement, financial independence, Francis Fukuyama: the end of history, gender pay gap, gentrification, ghettoisation, glass ceiling, illegal immigration, invisible hand, Jeremy Corbyn, mass immigration, moral panic, Nate Silver, obamacare, old-boy network, opioid epidemic / opioid crisis, Overton Window, payday loans, planetary scale, Ponzi scheme, public intellectual, race to the bottom, Ronald Reagan, Saturday Night Live, sexual politics, Steve Bannon, Steven Pinker, The Bell Curve by Richard Herrnstein and Charles Murray, Thomas L Friedman, transatlantic slave trade

It is merely the climate to which he is objecting, rather than specific instances where a far left ideologically orthodox liberal company closed ranks against a white man for saying the truth. This is a microcosm of how, when small changes are introduced in order to encourage those from different backgrounds up the ladder, this is seen as inefficient, a race to the bottom. Believing in meritocracy is also a way of owning one’s success as something attributable to one’s good qualities, rather than accident of birth. Harvard Business Review calls this ‘advantage blindness’ whereby relatively powerful people become unable to see the impact of their behaviour on those less privileged, and also unable to acknowledge the extent of their own privilege, as it is the norm.

…

Free speech, according to this definition, came to mean that no one had any right to object to what anyone ever said. Which not only meant that no one should object to Johnson’s comments but, in turn, that no one should object to their objection. Free speech logic, rather than the pursuit of a lofty Enlightenment value, became a race to the bottom where the alternative to being ‘professionally offended’ is never to be offended at all. This logic today demands silence from those who are defending themselves from abuse or hate speech. It is, according to the drector of the Institute of Race Relations, ‘the privileging of freedom of speech over freedom to life’.

…

But it didn’t stop at Muslims and Jews, it expanded to bullying girls, students of different sexual orientation and ultimately into targeting students who simply did not support Trump. Violence and damage to school property increased and the overwhelming majority of educators ‘saw a negative impact on students’ mood and behavior following the election’. As Trump himself would say, so much winning. Similarly, free speech absolutism creates a polarisation, a race to the bottom where licence is confused with freedom, where free speech is used as a technical excuse to commodify the spectacle of pain. When conspiracy theorist Alex Jones was kicked off digital platforms for suggesting that the Sandy Hook massacre was fabricated (among other theories) he asked, ‘Now, who will stand against tyranny and who will stand for free speech?’

Digital Dead End: Fighting for Social Justice in the Information Age by Virginia Eubanks

affirmative action, Alvin Toffler, Berlin Wall, call centre, cognitive dissonance, creative destruction, desegregation, digital divide, Fall of the Berlin Wall, future of work, game design, global village, index card, informal economy, invisible hand, Kevin Kelly, knowledge economy, labor-force participation, low-wage service sector, microcredit, new economy, post-industrial society, race to the bottom, rent control, rent stabilization, Shoshana Zuboff, Silicon Valley, social contagion, South of Market, San Francisco, tech worker, telemarketer, Thomas L Friedman, trickle-down economics, union organizing, urban planning, web application, white flight, women in the workforce, work culture , working poor

Uninsured women are nearly 50 percent more likely to die four to seven years following an initial diagnosis of breast cancer than insured women. The minimum wage is a poverty wage. The federal minimum wage was enacted in 1938 to put a firm floor under workers and their families, strengthen the economy by increasing consumer purchasing power, create new jobs, foster growth in lagging regions, and prevent a “race to the bottom,” with employers moving to the cheapest possible labor state. In 1938, the minimum wage brought a family of three with one full-time worker above the federal poverty line. [Talk about how the poverty line was calculated based on food cost as the highest cost of a household. Today, a household’s heaviest financial burden is housing.]

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Is food a family’s biggest expense? If not, what is? Why did they do it? The federal minimum wage was enacted to put a firm floor under workers and their families, strengthen the economy by increasing consumer purchasing power, create new jobs, foster economic growth in lagging regions, and prevent a “race to the bottom,” with employers moving to the cheapest possible labor state. Exercise (20 minutes) Does it add up? Does the minimum wage still make sense? Break the group into six small groups (using money). Give each group one of the family profiles and ask them to calculate whether or not they think the family will make it, given the wages the family is earning and the assistance it is are receiving.

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With higher wages, workers have more purchasing power, which buoys the economy. Ben Cohen has gone on to found Sweat X, which makes “sweatshop-free clothes for large organizations like universities.” Play Oprah’s tape. (5 minutes) (How does globalism throw a new wrinkle in the whole thing? Connect back to original aim of the 1938 federal wage being to prevent a race to the bottom. How might an international minimum wage be calculated?) Exercise (15 minutes) Calculating self-sufficiency How would you define a self-sufficiency or equity wage? Return to the chart developed earlier showing what the minimum wage doesn’t take into account. What else would we have to take into account for a truly just minimum wage, one based on minimum needs?

Reimagining Capitalism in a World on Fire by Rebecca Henderson

"Friedman doctrine" OR "shareholder theory", Airbnb, asset allocation, behavioural economics, benefit corporation, Berlin Wall, Bernie Sanders, business climate, Capital in the Twenty-First Century by Thomas Piketty, carbon footprint, carbon tax, circular economy, collaborative economy, collective bargaining, commoditize, corporate governance, corporate social responsibility, crony capitalism, dark matter, decarbonisation, disruptive innovation, double entry bookkeeping, Elon Musk, Erik Brynjolfsson, export processing zone, Exxon Valdez, Fall of the Berlin Wall, family office, fixed income, George Akerlof, Gini coefficient, global supply chain, greed is good, Greta Thunberg, growth hacking, Hans Rosling, Howard Zinn, Hyman Minsky, impact investing, income inequality, independent contractor, index fund, Intergovernmental Panel on Climate Change (IPCC), joint-stock company, Kickstarter, Lyft, Marc Benioff, Mark Zuckerberg, Max Levchin, means of production, meta-analysis, microcredit, middle-income trap, Minsky moment, mittelstand, Mont Pelerin Society, Neil Armstrong, Nelson Mandela, opioid epidemic / opioid crisis, Paris climate accords, passive investing, Paul Samuelson, Philip Mirowski, plant based meat, profit maximization, race to the bottom, ride hailing / ride sharing, Ronald Reagan, Rosa Parks, Salesforce, scientific management, Second Machine Age, shareholder value, sharing economy, Silicon Valley, Snapchat, sovereign wealth fund, Steven Pinker, stocks for the long run, Tim Cook: Apple, total factor productivity, Toyota Production System, uber lyft, urban planning, Washington Consensus, WeWork, working-age population, Zipcar

But there are too many problems that we cannot solve without the power of government. Even if a significant fraction of America’s firms adopts a high road labor strategy, it seems very unlikely that their commitment could significantly reduce inequality. Too many firms will have short-term incentives to take the low road and race to the bottom.9 Many firms believe they simply cannot afford the cost of raising wages. Moreover, unilaterally driving up wages is unlikely to be sustainable without moves to address the full range of factors that drive inequality in the first place, from changes in the tax code to the decline in organized labor representation, to the increasing dominance of very large firms and the failure of the US educational system to keep pace with the demands of the modern workplace.

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But heading off the worst consequences of global warming will require decommissioning many existing fossil fuel plants—and that’s a process that without a change in the rules is very unlikely to be profitable. Building an engaged, well-paid workforce can be a potent source of competitive advantage—but it can be hard to pay people well and to treat them decently when one’s competitors are busy racing to the bottom. Many firms would like to see the quality of local education improve, but very few can build a case for being the only firm willing to invest in making it happen. Many firms would like to see an end to corruption or an increase in the quality of local legal institutions, but most cannot make progress against either goal on their own.

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My students ask me if this kind of thing doesn’t make me nervous. Do we really want the world’s largest asset owners to exercise this kind of collective power? To me, this is an easy question. These owners are already exercising enormous power—in the service of pushing the firms in their portfolio to race to the bottom. It’s critically important that they make a deliberate decision to trigger a race to the top instead. A central element of a reimagined capitalism is a reimagined financial sector—one that takes its collective responsibilities to the world seriously and is willing to act on them. IN SUMMARY, SELF-REGULATION is a potentially powerful way to mobilize the world’s business community in support of creating collective shared value.

The Corporation: The Pathological Pursuit of Profit and Power by Joel Bakan

"World Economic Forum" Davos, Alan Greenspan, benefit corporation, Berlin Wall, business logic, Cass Sunstein, corporate governance, corporate personhood, corporate social responsibility, creative destruction, electricity market, energy security, Exxon Valdez, Ford Model T, IBM and the Holocaust, joint-stock company, laissez-faire capitalism, market fundamentalism, Naomi Klein, new economy, precautionary principle, race to the bottom, Ralph Nader, Ronald Reagan, shareholder value, South Sea Bubble, The Wealth of Nations by Adam Smith, Triangle Shirtwaist Factory, urban sprawl

Quoted in Richard Gwyn, "The True Allegiance of Canadian Corporations," Toronto Star, April 28, 1999. 37. See, for discussions of globalization, Anthony Giddens, Runaway World: How Globalisation Is Running Our Lives (London: Profile Books, 1999); Joseph E. Stiglitz, Globalization and Its Discontents (New York: W. W. Norton and Company, 2002); Alan Tonelson, The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade Are Sinking American Living Standards (Boulder, Colo.: Westview Press, 2000); Saskia Sassen, Losing Control: Sovereignty in an Age of Globalization (New York: Columbia University Press, 1996); William K. Tabb, The Amoral Elephant: Globalization and the Struggle for Social Justice in the Twenty-first Century (New York: Monthly Review Press, 2001); Gary Teeple, Globalization and the Decline of Social Reform into the Twenty-first Century (Toronto: Garamond Press, 2000); William Greider, One World, Ready or Not: The Manic Logic of Global Capitalism (New York: Simon & Schuster, 1997). 38.

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Interview with Robert Monks ("effective"). 11. Interview with Elaine Bernard. 12. Interviews with Ira Jackson, Charles Kernaghan, and Debora Spar. 13. Interview with Robert Monks. Back Matter Page 40 Progressive Corporate Law with Progressive Social Movements." Tulane Law Review 76 (2002), 1227-12 52. Tonelson, Alan. The Race to the Bottom: Why a Worldwide Worker Surplus and Uncontrolled Free Trade Are Sinking American Living Standards. Boulder, Colo.: Westview Press, 2000. Tysbine, Alex. Water Privatization: A Broken Promise. Washington, D.C.: Public Citizen, 2001. Useem, Michael. The Inner Circle: Large Corporations and the Rise of Business Political Activity in the US and UK.

American Secession: The Looming Threat of a National Breakup by F. H. Buckley

Affordable Care Act / Obamacare, Andrei Shleifer, belling the cat, Bernie Sanders, British Empire, Cass Sunstein, colonial rule, crony capitalism, desegregation, diversified portfolio, Donald Trump, Francis Fukuyama: the end of history, guns versus butter model, hindsight bias, illegal immigration, immigration reform, income inequality, low interest rates, Michael Milken, military-industrial complex, old-boy network, Paris climate accords, race to the bottom, Republic of Letters, reserve currency, Ronald Coase, Stephen Fry, Suez crisis 1956, transaction costs, Washington Consensus, wealth creators

The regression line slants upward from the corrupt states in the lower right, which people are leaving, to the more honest ones in the upper left, to which people are moving. Honest states are richer than corrupt ones, as we saw in Figure 6.1, and this makes them more desirable places to live. Home rule would result in more competition between states to provide honest governance and the most efficient set of rules. But the competition could also become a “race to the bottom” in some ways. If states compete for migrants through their welfare payouts, they might have an incentive to reduce them in order to attract the employed and healthy, and discourage everyone else. States might then compete to see who can cut welfare the most.18 Home rule would also amount to an opt-out of national equalization programs aimed at ensuring that Americans in the poorest states are properly cared for.

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Roberts, John Roland, Jeanne-Marie Roman Empire Rousseau, Jean-Jacques: on federal state; and Hume; on small states Rubin, Jennifer Ruiz Evans, Marcus Russia; expansionism of; and Finland; Napoleon in; separatism in Sale, Kirkpatrick same-sex marriage Sanders, Bernie Saudi Arabia Scarborough, Joe Schaaf, Libby Schmitt, Carl Schumer, Chuck Scotland Seddon, James segregation Serbia Sessions, Jeff Seven Years’ War Seward, William Sherman, Roger Singapore Sitwell, Edith slavery; and Civil War; legal protection of Slovakia social media Social Security social trust social welfare; in Finland; in Quebec; “race to the bottom” in Sons of Confederate Veterans Soros, George South Africa South Carolina; and Civil War; federal employees in; General Assembly; and nullification crisis southern culture Southern Poverty Law Center Soviet Union: breakup of; constitutional “rights” in; and Finland; Orwell on Spain Spanish-American War Sparta Spirit of the Laws (Montesquieu) Stanton, Edwin Stars and Bars Steinle, Kate Stendhal (Marie-Henri Beyle) Stephens, Alexander Stiglitz, Joseph Story, Joseph Sudan Suez crisis sugar industry Sunstein, Cass super PACs Syria Taney, Roger B. tariffs; interstate; and lobbyists; and nullification Tea Party movement Teilhard de Chardin, Pierre Texas; Austin; and Civil War bonds Texas v.

The New Snobbery by David Skelton

assortative mating, banking crisis, Black Lives Matter, Boris Johnson, Brexit referendum, British Empire, call centre, centre right, collective bargaining, coronavirus, corporate governance, corporate social responsibility, COVID-19, critical race theory, David Brooks, defund the police, deindustrialization, Etonian, Extinction Rebellion, financial deregulation, gender pay gap, glass ceiling, housing crisis, income inequality, Jeremy Corbyn, job automation, knowledge economy, lockdown, low skilled workers, market fundamentalism, meritocracy, microaggression, new economy, Northern Rock, open borders, postindustrial economy, race to the bottom, rent-seeking, Richard Florida, Right to Buy, rising living standards, shareholder value, social distancing, Social Justice Warrior, TED Talk, TikTok, wealth creators, women in the workforce

Giving cleaners or distribution workers, for example, the power to negotiate as a sector would ensure decent standards for everyone in that field across a locality, whilst maintaining some flexibility and preventing a race to the bottom, with one company not able to undercut others over pay and conditions. Sectoral bargaining would also enable workers and businesses to agree a minimum floor of rights, including on areas such as sick pay, paid holiday, pensions and basic certainty over hours. The fact that a ‘race to the bottom’ is ruled out means that firms are then more incentivised to differentiate through productive investment in their workforce, innovation and customer retention.

We Are All Fast-Food Workers Now: The Global Uprising Against Poverty Wages by Annelise Orleck

"World Economic Forum" Davos, airport security, American Legislative Exchange Council, anti-communist, Bernie Sanders, big-box store, Black Lives Matter, British Empire, call centre, Capital in the Twenty-First Century by Thomas Piketty, card file, clean water, collective bargaining, corporate social responsibility, deindustrialization, Deng Xiaoping, Donald Trump, export processing zone, Ferguson, Missouri, financial deregulation, food desert, Food sovereignty, gentrification, gig economy, global supply chain, global value chain, immigration reform, independent contractor, indoor plumbing, Jeremy Corbyn, Kickstarter, land reform, land tenure, Mahatma Gandhi, mass immigration, McJob, means of production, new economy, payday loans, precariat, race to the bottom, Rana Plaza, rent-seeking, ride hailing / ride sharing, road to serfdom, Ronald Reagan, Rosa Parks, shareholder value, Shenzhen special economic zone , Skype, special economic zone, Triangle Shirtwaist Factory, union organizing, War on Poverty, women in the workforce, working poor

If you stand up and fight for change, you can win.”5 CHAPTER 9 PEOPLE POWER MOVEMENTS IN THE TWENTY-FIRST CENTURY AKTER’S ASSERTION THAT “in Bangladesh it is not 2011; it’s 1911” explains a lot. For, it is true not just of Bangladesh but of low-wage workers everywhere. Four decades into the neoliberal revolution, the repeal and erosion of labor protections, shrinking labor unions, precarious employment, stagnant wages, declining buying power, and a global race to the bottom in safety standards have turned the clock back for workers. And it has not been a small step back, but a giant leap. From Arkansas chicken processing plants to Philippine flip-flop factories, low-wage workers are having to again fight for rights already fought for and won one hundred years earlier.

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China, India, Vietnam, Bangladesh, and Cambodia became engines of a “fast-fashion” revolution, eroding wages and working conditions in countries and regions that once had strong labor movements: the Philippines, Mexico, Central America, and the United States. Garment workers speak of “a global race to the bottom,” says Filipina organizer Asuncion Binos. “We in the Philippines have come a long way down.” By the 2010s, countries with decent wage and labor protections could only compete if they established export zones where strikes were banned and labor regulations suspended. Global lenders offered rewards for creating “special economic zones.”

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Frank, “A Brief History of Walmart,” Washington Monthly, April 2006; International Directory of Company Histories, vol. 63 (Detroit: St. James Press, 2004); Dina Specter, “Walmart,” Business Insider, November 15, 2012; Ellen Israel Rosen, “The Walmart Effect: The World Trade Organization and the Race to the Bottom,” Chapman Law Review (Spring 2005). 7. “Kalpona Akter at Walmart’s Annual Shareholder Meeting,” June 10, 2013, YouTube video, https://www.youtube.com/watch?v=AcC-yCyF4fo; “Bring Bangladesh Voices to Walmart’s Headquarters,” Indiegogo, 2013, https://www.indiegogo.com/projects/bring-two-bangladeshi-garment-workers-to-the-walmart-shareholder-meeting; Clare O’Connor, “Former Bangladesh Sweatshop Worker to Billionaire Walton Family: Use Your Wal-Mart Fortune to Stop Worker Deaths,” Forbes, June 7, 2013. 8.

Dirty Secrets How Tax Havens Destroy the Economy by Richard Murphy

"Friedman doctrine" OR "shareholder theory", banking crisis, barriers to entry, Bernie Sanders, centre right, corporate governance, Donald Trump, Double Irish / Dutch Sandwich, en.wikipedia.org, Glass-Steagall Act, Global Witness, high net worth, income inequality, intangible asset, Leo Hollis, light touch regulation, moral hazard, Occupy movement, offshore financial centre, race to the bottom, Social Responsibility of Business Is to Increase Its Profits, Suez canal 1869, Suez crisis 1956, The Wealth of Nations by Adam Smith, transfer pricing, Washington Consensus

At the same time, governments, sensing the threat that hot money has created, have reacted with a rash of investment incentives, not limited to cutting the corporation tax rates they offer. This leaves us in the unfortunate position of having no clear sign yet that anti–tax abuse initiatives, like the OECD’s, are going to deliver when the same governments that promoted them are also major participants in the corporation tax race to the bottom. The benefits that tax havens have supplied to the world’s major corporations seem set to continue for the time being, unless some radical changes in the design of tax systems take place (see Chapter 6). Other regulatory relaxations also exist. For example, a significant part of what is called the captive insurance market is located in tax havens.

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The tax haven operations are critical to this, and as many tax partners in these firms will confirm, they make good fees from advising clients on which locations best suit their needs at a particular time. Precisely because they monitor this situation so accurately, these firms are also far from independent participants in the process. They all lobby to promote their clients’ needs, and in the process are active participants in the regulatory and economic race to the bottom that tax havens facilitate. As a result, it is almost impossible to see tax havens and these large accountancy firms as independent of one another. Some lawyers have a roughly similar status – though it is unusual to find a major onshore firm of lawyers operating offshore. Instead, most of this business is operated by what is called the ‘magic circle’ of offshore law firms.

WTF?: What's the Future and Why It's Up to Us by Tim O'Reilly

"Friedman doctrine" OR "shareholder theory", 4chan, Affordable Care Act / Obamacare, Airbnb, AlphaGo, Alvin Roth, Amazon Mechanical Turk, Amazon Robotics, Amazon Web Services, AOL-Time Warner, artificial general intelligence, augmented reality, autonomous vehicles, barriers to entry, basic income, behavioural economics, benefit corporation, Bernie Madoff, Bernie Sanders, Bill Joy: nanobots, bitcoin, Blitzscaling, blockchain, book value, Bretton Woods, Brewster Kahle, British Empire, business process, call centre, Capital in the Twenty-First Century by Thomas Piketty, Captain Sullenberger Hudson, carbon tax, Carl Icahn, Chuck Templeton: OpenTable:, Clayton Christensen, clean water, cloud computing, cognitive dissonance, collateralized debt obligation, commoditize, computer vision, congestion pricing, corporate governance, corporate raider, creative destruction, CRISPR, crowdsourcing, Danny Hillis, data acquisition, data science, deep learning, DeepMind, Demis Hassabis, Dennis Ritchie, deskilling, DevOps, Didi Chuxing, digital capitalism, disinformation, do well by doing good, Donald Davies, Donald Trump, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, fake news, Filter Bubble, Firefox, Flash crash, Free Software Foundation, fulfillment center, full employment, future of work, George Akerlof, gig economy, glass ceiling, Glass-Steagall Act, Goodhart's law, Google Glasses, Gordon Gekko, gravity well, greed is good, Greyball, Guido van Rossum, High speed trading, hiring and firing, Home mortgage interest deduction, Hyperloop, income inequality, independent contractor, index fund, informal economy, information asymmetry, Internet Archive, Internet of things, invention of movable type, invisible hand, iterative process, Jaron Lanier, Jeff Bezos, jitney, job automation, job satisfaction, John Bogle, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, John Zimmer (Lyft cofounder), Kaizen: continuous improvement, Ken Thompson, Kevin Kelly, Khan Academy, Kickstarter, Kim Stanley Robinson, knowledge worker, Kodak vs Instagram, Lao Tzu, Larry Ellison, Larry Wall, Lean Startup, Leonard Kleinrock, Lyft, machine readable, machine translation, Marc Andreessen, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, McMansion, microbiome, microservices, minimum viable product, mortgage tax deduction, move fast and break things, Network effects, new economy, Nicholas Carr, Nick Bostrom, obamacare, Oculus Rift, OpenAI, OSI model, Overton Window, packet switching, PageRank, pattern recognition, Paul Buchheit, peer-to-peer, peer-to-peer model, Ponzi scheme, post-truth, race to the bottom, Ralph Nader, randomized controlled trial, RFC: Request For Comment, Richard Feynman, Richard Stallman, ride hailing / ride sharing, Robert Gordon, Robert Metcalfe, Ronald Coase, Rutger Bregman, Salesforce, Sam Altman, school choice, Second Machine Age, secular stagnation, self-driving car, SETI@home, shareholder value, Silicon Valley, Silicon Valley startup, skunkworks, Skype, smart contracts, Snapchat, Social Responsibility of Business Is to Increase Its Profits, social web, software as a service, software patent, spectrum auction, speech recognition, Stephen Hawking, Steve Ballmer, Steve Jobs, Steven Levy, Stewart Brand, stock buybacks, strong AI, synthetic biology, TaskRabbit, telepresence, the built environment, the Cathedral and the Bazaar, The future is already here, The Future of Employment, the map is not the territory, The Nature of the Firm, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, Thomas Davenport, Tony Fadell, Tragedy of the Commons, transaction costs, transcontinental railway, transportation-network company, Travis Kalanick, trickle-down economics, two-pizza team, Uber and Lyft, Uber for X, uber lyft, ubercab, universal basic income, US Airways Flight 1549, VA Linux, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, We are the 99%, web application, Whole Earth Catalog, winner-take-all economy, women in the workforce, Y Combinator, yellow journalism, zero-sum game, Zipcar

As Harvard Business School lecturer and former CEO of Stop & Shop José Alvarez writes, “Zeynep Ton has proven what great leaders know instinctively—an engaged, well-paid workforce that is treated with dignity and respect creates outsized returns for investors. She demonstrates that the race to the bottom in retail employment doesn’t have to be the only game being played.” Economists have long recognized this phenomenon. They call wages higher than the lowest that the market would otherwise offer “efficiency wages.” That is, they represent the wage premium that an employer pays for reduced turnover, higher employee quality, lower training costs, and many other significant benefits. In Chapters 11 and 12, we’ll look at the key drivers of the race to the bottom in wages, and why we need to rewrite the rules of business.

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Do they choose video over text, even when text would let them do a better job? The need to get attention from search engines and social media is a major factor in the dumbing down of news media and a style of reporting that leads even great publications to a culture of hype, fake controversies, and other techniques to drive traffic. The race to the bottom has in part been a result of the primary shift of news industry revenue from subscription to advertising and from a secure base of local readers to chasing readers via social media. Subscription-based publications have an incentive to serve their readers; advertising-based publications have an incentive to serve their advertisers.

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When we focus on what needs doing, and what might be possible when humans are augmented by new technology, it is clear that there is plenty of work to go around for both humans and machines. It is only our acceptance of the notion that financial efficiency is the primary fitness function for the economy that locks us into the race to the bottom, in which humans are seen as a cost to be eliminated. But in the debate with Martin and in subsequent conversations with attendees at the event, I found myself thinking and saying things that hadn’t occurred to me before. Stanford’s Rob Reich, the moderator of the discussion, said to me afterward, “I thought going into this that Martin was the radical.

The Third Pillar: How Markets and the State Leave the Community Behind by Raghuram Rajan

"Friedman doctrine" OR "shareholder theory", activist fund / activist shareholder / activist investor, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, airline deregulation, Albert Einstein, Andrei Shleifer, banking crisis, barriers to entry, basic income, battle of ideas, Bernie Sanders, blockchain, borderless world, Bretton Woods, British Empire, Build a better mousetrap, business cycle, business process, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carl Icahn, central bank independence, computer vision, conceptual framework, corporate governance, corporate raider, corporate social responsibility, creative destruction, crony capitalism, crowdsourcing, cryptocurrency, currency manipulation / currency intervention, data acquisition, David Brooks, Deng Xiaoping, desegregation, deskilling, disinformation, disruptive innovation, Donald Trump, driverless car, Edward Glaeser, facts on the ground, financial innovation, financial repression, full employment, future of work, Glass-Steagall Act, global supply chain, Great Leap Forward, high net worth, household responsibility system, housing crisis, Ida Tarbell, illegal immigration, income inequality, industrial cluster, intangible asset, invention of the steam engine, invisible hand, Jaron Lanier, job automation, John Maynard Keynes: technological unemployment, joint-stock company, Joseph Schumpeter, labor-force participation, Les Trente Glorieuses, low interest rates, low skilled workers, manufacturing employment, market fundamentalism, Martin Wolf, means of production, Money creation, moral hazard, Network effects, new economy, Nicholas Carr, obamacare, opioid epidemic / opioid crisis, Productivity paradox, profit maximization, race to the bottom, Richard Thaler, Robert Bork, Robert Gordon, Ronald Reagan, Sam Peltzman, shareholder value, Silicon Valley, social distancing, Social Responsibility of Business Is to Increase Its Profits, SoftBank, South China Sea, South Sea Bubble, Stanford marshmallow experiment, Steve Jobs, superstar cities, The Future of Employment, The Wealth of Nations by Adam Smith, trade liberalization, trade route, transaction costs, transfer pricing, Travis Kalanick, Tyler Cowen, Tyler Cowen: Great Stagnation, universal basic income, Upton Sinclair, Walter Mischel, War on Poverty, women in the workforce, working-age population, World Values Survey, Yom Kippur War, zero-sum game

In contrast, international agreements, such as those on the harmonization of regulations, are rarely arrived at in a democratic spirit, as I have argued. This is why I believe countries should have a more bottom-up deliberative process on what they regulate and what they adhere to, and the ability to pick and choose in most such agreements. RACE TO THE BOTTOM . . . One concern countries have is a race to the bottom. If there is no harmonization of regulations, will countries that adopt the lowest standards benefit their firms, giving them a competitive advantage? This danger is emphasized, often by countries that fear their preferred position demands too much of their own firms.

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It may be that this was a Machiavellian attempt by supporters of southern European countries to torpedo the entire move by escalating it to international levels. Regardless, the episode highlights the problems with harmonization—regulators cartelize and spread unnecessary and inappropriate regulation across countries, preventing competition between jurisdictions from highlighting the costs of such regulations. Finally, what about the race to the bottom? Regulators agreed to common bank capital requirements in the various Basel Accords because they feared that if given the flexibility, some regulators might impose inordinately low requirements on their banks. Yet this fear is questionable. If higher bank capital reduces risks, why wouldn’t the bank regulators in each country internalize the need to set capital requirements for their domestic banks at adequate levels?

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., 157, 158, 397 Kleiner, Morris, 207 knowledge, diffusion of, 204–6 Krueger, Alan, 207 Kyoto Protocol, 365 laissez-faire, 77–78, 81, 83 landowners, 37, 58, 72, 74 gentry, 54–58, 64–66, 71, 72 Lasch, Christopher, 227 Latin America, 72, 93, 96 Lee Kuan Yew, 247 LEGO, 391 lending, see loans Le Pen, Marine, 236 Lerner, Josh, 362 Levine, David, 382–83 liberal democracy, 74–75 liberalism, 83, 160 liberalization, 206 in China, 248–67, 276 in India, 269–71, 273, 276 private sector’s reaction to, 194–201, 207–8 liberal market democracies, xiii, xx, xxvii libertarianism, 115 limited-access societies, 97–98 Lindsey, Brink, 205 loans, 44–45, 48 contract in, 29–31 see also usury lobbying, 378, 389 localism, xxi, xxviii, 285, 286, 303 inclusive, xxii, 22, 285–87, 289–302, 327, 351, 394 long-term benefits of, 303 location, importance of, 219–21 Long, Huey, 136 looms, 18–19, 116, 188 Louis XIV, King, 60, 65, 66 Luce, Edward, 227 Luther, Martin, 46 Madison, James, 97, 218 magnates, decline of, 53–54 Mahajan, Vijay, 337 Malthus, Thomas Robert, 83 Mann, Horace, 121 manufacturing, 152, 184–85, 206 Mao Zedong, 247–50 markets, xiii, xv, xvii–xviii, xx, xxii, xxvii–xxviii, 25–27, 50, 56, 77–106, 145, 154, 172, 173, 243–44, 283, 184, 285–87, 304, 393, 394 community adjustment to, 388–92 community and state buffers against volatility in, 127–38 community loss of faith in, 115–19 community values and, 390–92 competition in, see competition data in, 384–86 definition of, xiv democracy and, 106, 110 emerging, 245, 271; see also China; India fairness in, 115–16 freeing, 80–81 laissez-faire and, 77–78, 81, 83 liberalization of, see liberalization liberal market democracies, xiii, xx, xxvii perceived legitimacy of players in, 110–12 philosophy for, 81–84 reforming, 373–92 separation from community, xiv–xv state and, 304 transactions in, 3, 4 unbridled, 84–87 see also trade marriage, 231, 235 Marshall Plan, 149–51, 365 marshmallow test, 222–23 Marx, Karl, 49, 78, 87–91 Marxism, 87–91, 112, 115, 249, 287 Maximum Feasible Misunderstanding (Moynihan), 158 McClure’s Magazine, 103 McKinley, William, 106 McLean, Malcolm, 181 meatpacking industry, 104, 107–8 Medicare, 241, 324 mercantilism, 62–65, 80 Merchant of Venice, The (Shakespeare), 30 meritocracy, 390, 393 children and, 224–25, 228 in China, 257, 265 Merkel, Angela, 241 military technologies, 42–44, 51, 53 Mill, Harriet, 81 Mill, John Stuart, 81–83 minorities, 218, 219, 289, 296–97 affirmative action and, 300–302 see also African Americans; immigration, immigrants Mischel, Walter, 223 misery index, 163 Mitterand, François, 168 Mokyr, Joel, 20, 21 monarchy, 51–53, 56–59, 61–63, 65, 73 monasteries, 54, 57, 72 moneylending, see loans Monnet, Jean, 154 monopolies, 58–62, 64, 80, 81, 87, 91, 97, 99, 105, 106, 108, 109, 112, 201–7, 283, 379–82 antitrust laws and, 101, 103–4, 381–82 Montegrano, 12–14, 113, 227 Moore, Barrington, 73 Moretti, Enrico, 220 Morgan, John Pierpont, 99, 104 Morse, Adair, 220 Moynihan, Daniel Patrick, 158, 340 multilateral institutions, 367–70 Murphy, Kevin, 196 Murray, Charles, 227 muskets, 42–43 Muslims, 21, 35, 36, 241, 242, 272, 277 Napoleon I, 126 nationalism, xvii, 64, 184, 330, 397 civic, 297–99, 302 ethnic, 215–17; see also populist nationalism mercantilism and, 63 populist, see populist nationalism Nation at Risk, A, 232–33 nation-states, 26, 42, 50, 51–52, 61–62 Nehru, Jawaharlal, 267, 270, 287, 298 neighborhoods, 297 isolation index and, 333 sorting and, see residential sorting see also community Netville, 331–32 Neumann, Franz, 112 New Deal, 134–35 New Localism, The (Katz and Nowak), 303 news consumption, and diversity of opinions, 332–33 New York Times, 19, 98, 218, 387 Nixon, Richard, 98, 108 North, Douglass, 70, 97 Nowak, Jeremy, 303 Obama, Barack, xvii, 158, 235, 240 India visited by, 273 Obama, Michelle, 240 Obamacare, 144, 214, 239–41 Oceana (Harrington), 58 oil industry, 84–86, 99, 103, 107, 111 Oliver, Douglas, 9 one percent, 102, 191–94 On Liberty (Mill), 81–83 open-access societies, 98 Opium Wars, 349–50 Organization for Economic Co-operation and Development (OECD), 189–90 Our Towns: A 100,000-Mile Journey into the Heart of America (Fallows and Fallows), 344 Owen, Robert, 88 Owens, Ann, 226 Papal Revolution, 38, 40 parents, 222–31, 343 Paris Agreement, 365 parliaments, 77, 78–79 English, 57, 60–62, 65–70, 74, 77, 84, 105 patents, 204–6, 362, 382–84 patriotism, 298 peasants, 37–38, 73, 74, 78 see also feudalism, feudal communities Peltzman, Sam, 202 Perez, Carlotta, 118 Petersen, Mitchell, 15, 219 pharmaceutical drugs and companies, 183, 184, 204, 354, 362–63, 384 Physiocrats, 77 Piketty, Thomas, 191 Pilsen community, xxii–xxvi, 12, 298, 344, 381 Pirenne, Henri, 45 plague (Black Death), 40, 41–42 Polanyi, Karl, 84 police officers, 312 politics: conflict over, 234–36 isolation index and, 332–33 left-wing, xiii, xix, xxvii, 214, 217, 394 right-wing, xiii, xix, 214–17, 394 Polybius, 118 population aging, 260, 284, 286, 292–93, 324, 342–43, 348, 396 population diversity, see diversity population growth, 83, 152, 162–63 populism, xiii, xix, xxviii, 63, 136, 137, 211, 213–44, 284 in China, 276–79 and conflict over values and politics, 234–36 in Europe, 241–43 Global Financial Crisis and, 236–43 growing divide and, 218–19 in India, 272, 276–78 left-wing, 214, 217 Obamacare and, 239–41 Populist movement at turn of nineteenth century, 23, 26, 79, 98–101, 102, 105–6, 112, 244, 265 reemergence in the industrial West, 213–44 right-wing, 214–17 types of, 214–18 populist nationalism, xiii, xix–xx, xxi, xxvii, 144, 216–17, 241–44, 246, 276–79, 286, 289, 295–300, 302, 352, 353 in China, 276–79 in Europe, 241–43 in India, 276–78 why it cannot work, 296–97 Populist Revolt, The (Hicks), 99 Portugal, 148, 238 Poterba, James, 140 poultry farms, 354–55, 357 poverty, 396 African Americans and, 157 Elberfeld system of assistance, 129–31, 320 War on, 158, 160, 229 Powell, Enoch, 159 presidential election of 2016, 235, 236, 333, 354 Price, Brendan, 185 Princeton University, 125 printing press, 41–42, 46 private sector, 107–8, 111, 139, 147, 283, 284, 352, 371 liberalization and, 194–201, 207–8 Progressives, 26, 79, 98–99, 102–6, 112, 124, 134, 137, 244, 265 property, 26, 52, 57, 58, 74, 79, 83, 103, 115, 352, 362, 374, 394 competition and, 286 intellectual, see intellectual property land, see landowners taxes on, 121, 123 as theft, 110–11 protectionism, 108, 258–59, 278, 306, 353–56, 364 Protestant Ethic and the Spirit of Capitalism, The (Weber), 47 Protestant Reformation, 40–41, 47, 49 Protestants, 48, 49 public hearings, 389–90 Putnam, Robert, 227, 334 Quakers, 16–17, 230 race, see ethnicity and race race to the bottom, 358–60 railroad industry, 85, 87, 99, 101 Ramanathan, Swati, 312 Ramcharan, Rodney, 72 ranchers, 9–10, 11 Rand, Ayn, 80, 391 R&D, 183–84 Rashtriya Swayamsevak Sangh (RSS), xix, 277 Rauh, Joshua, 192 Rawls, John, 115 Raymundo, Raul, xxiii, xxvi Reagan, Ronald, 165, 194, 232 Reeves, Richard, 224 Reformation, 40–41, 47, 49 regulation(s), 103–5, 107–8, 165, 172 antitrust, 202 of banks, 358–60 communities and, 285, 304, 306–7, 341, 357 competition and, 165, 387–88 deregulation, 165–67, 194, 197 harmonization of, 354–63, 365, 371 relief efforts, 131–33, 135 see also safety nets religion, 49, 51, 64 Protestant Reformation, 40–41, 47, 49 Protestants, 48, 49 see also Catholic Church Republicans, 235–36 residential sorting, 144, 177, 222, 227, 314 by income, 307–9 race and immigration and, 229–31 resources, policies on, 365 Resurrection Project, xxiii–xxvi Ritter, Jay, 201 Robinson, James, 94 Rockefeller, John D., 84–91, 98, 103, 104, 108, 200 Rodgers, Daniel, 334 Rodrik, Dani, 364–65, 371 Roman Republic, 58 Romney, Mitt, 235 Roosevelt, Franklin, 134–37, 156 Roosevelt, Theodore, 106 Rosen, Sherwin, 193 Russell, John, 95 Russia, 97, 287, 292, 354, 369 wealthy in, 111 Saez, Emmanuel, 191 safety nets, 139, 173, 290 caregivers and, 319–20 community and, 127–38, 318–25 in Europe, 156 government support in, 322–24 health care, see health care paying for, 324–25 for peasants, 37–38 in U.K., 155–56 in U.S., 133–34, 156, 157–58, 320–21, 324 welfare, 129, 137, 148, 158, 230 Salam, Reihan, 235 Sandel, Michael, 389–90 Sanders, Bernie, 214 Satyanath, Shaker, 112 schools, see education and schools Schumpeter, Joseph, 203, 379 Schwartz, Heather, 225–26 science, 21 “Second Coming, The” (Yeats), 141 Second Federal Bank, xxv SeeClickFix, 311–12 Sen, Amartya, 287 Shakespeare, William, 30 Shapiro, Jesse, 332–33 Share Our Wealth Society plan, 136 Shleifer, Andrei, 197 Sinclair, Upton, 104 Singapore, 247, 291, 318 Singh, Manish, 336 Singh, Manmohan, 270 Siuai people, 9 smartphones, 175, 178, 182–83 Smith, Adam, 17, 64, 77, 80–81, 83, 84, 87, 91, 105, 200 Smoot Hawley Act, 138 socialism, 132, 138, 145–47, 168, 250 in India, 267–69, 391 socializing the young, 5–7 social media, 330, 354, 386 social relationships, 7–8 social safety nets, see safety nets Social Security, 134–38, 187, 241, 324 Sokoloff, Kenneth, 72, 96 sorting, see residential sorting South Sea Company, 68, 69–70 sovereignty, 349–72 and controlling flows, 351–54 and harmonization of regulation, 354–63 Soviet Union, 91, 145–47, 153–54, 250, 251, 267, 287, 367 Spain, 148, 162, 169, 237, 238, 353–54 Spence, Michael, 234 stagflation, 163 Standard Oil, 86, 99, 103, 107 Stanford marshmallow test, 222–23 state, xiii, xv, xvii–xviii, xx–xxi, xxvii–xxviii, 25–27, 50, 139, 140, 172, 283–86, 304, 393 anti-state ideology and, 176 buffers against market volatility, 127–38 Church and, 45–46 community and, 303–25, 345–46 constitutionally limited, 52–74, 83 definition of, xiii–xiv growth of, 145 international responsibilities and, 363–67, 372, 397 laissez-faire and, 77–78, 81, 83 markets and, 304 relief efforts from, 131–33 separation from community, xiv–xv strong but limited, rise of, 51–75 sustainable financing for, 65–71 steel industries, 87, 99, 122, 185, 186, 253, 261, 338, 364, 366 European Coal and Steel Community, 150 student loans, 317–18 suffrage, see voting, suffrage Summers, Larry, 197 Supreme Court, U.S., 103, 384 Sweden, 138 Swift, Taylor, 193 Talleyrand, Charles Maurice de, 66 Tarbell, Ida, 103, 200 tariffs, 61, 63–64, 80–81, 100, 108, 138, 150–51, 164, 181–83, 217, 242, 258–59, 271, 277, 352–53, 356, 363, 364, 366, 371 General Agreement on Tariffs and Trade, 146, 150, 353 Tawney, Richard, 34–35, 46 taxes, 59, 61–62, 102–5, 156–57, 163–64, 206, 308–9, 364 for education, 121, 123 property, 121, 123 tax holidays, 341 tax incentives, 345 on towns, 59–60 universal basic income and, 322–23 tax preparation, 179, 180 Tea Party movement, 239–41, 242, 333 technology, xii, xxviii, 117, 160–62, 175–76, 283, 284, 286, 287 automation in, 18, 84, 179, 180, 284 China and, 261–62, 278 community and, 119, 335, 344–45 disruptive change from, xii–xiii, xix education and, 122–23 feudal community and, 41–42 financial crises and, 118 incomes and, 188–94 job losses from, xii, xviii public anxiety about, 116–18 winner-take-most effects of, 191–94 see also Industrial Revolution; Information and Communications Technology revolution Teles, Steven, 205 Thatcher, Margaret, 165–66, 194 three pillars, xiii, 25–27, 393, 394 balance between, xvii–xviii, 175, 394 see also community; markets; state Tiananmen Square protests, 250–51 Tiv people, 7–8 Tönnies, Ferdinand, 3–4 totalitarian regimes, 97 trade, 62–64, 80–81, 143, 146, 149–51, 154, 160, 164–65, 172, 181, 245, 271, 283, 307, 352–53, 363, 371 “beggar thy neighbor” policies and, 364 communications costs and, 181, 182 communities and, xviii–xx, 335, 352 European, with Muslim lands, 36 ICT revolution and, 143–44, 173, 181–88 incomes and, 188–94 protectionism and, 108, 258–59, 278, 306, 353–56, 364 tariffs and, see tariffs transportation costs and, 181–82 Trade Related Intellectual Property Rights Agreement (TRIPS), 362 training and socializing the young, 5–7 transactions: in communities, 3, 8–9, 10–11 market, 3, 4 Trotsky, Leon, 90 Trump, Donald, 235 Truly Disadvantaged, The (Wilson), 230 Turkey, xix, 97, 167, 190, 245 Uber, 196 Unified Payments Interface (UPI), 386 unions, 165, 198, 206, 360, 361 United Kingdom, 173 Companies Act in, 377 health care in, 156 income in, 191, 192 in Opium Wars, 349–50 safety net in, 155–56 United Nations, 367 United States, 143, 145, 149, 246, 298 African Americans in, see African Americans agriculture in, 184 China and, 278 Civil War in, 74, 93, 133–34 competitive market in, 98–105 Constitution of, 71 diversity in population of, 134 financial crises in, 87–88, 118 GI Bill in, 156, 157 Gilded Age in, 87 gold standard in, 100 government debt in, 324 growth of, 148, 162 health care in, 158, 203 hegemony of, 148, 367–69 immigration and, 137, 159–60, 292 Industrial Revolution in, 121 manufacturing in, 184–85 Marshall Plan of, 149–51, 365 in postwar period, 148 presidential election of 2016, 235, 236, 333, 354 safety net in, 133–34, 157–58, 320–21, 324 schools in, 119–25, 127, 190–91, 233–34, 317 South of, 72, 74 Supreme Court, 103, 384 voting rights in, 92–93, 96 Western settlers in, 72, 99–100 universal basic income (UBI), 322–23 universities, see colleges and universities University of Chicago, xxiii, xxvi, 87, 124–25, 164, 290–91 University of Rochester, 223 usury: Catholic Church and, 34–42, 44–46, 49 favorable public attitudes toward, 44 intellectual support for ban on, 39–40 prohibition on, 31–32 rationale for proscribing, 32–34 values: community, and tolerance for markets, 390–92 conflict over, 234–36 Virginia, 58 Voigtländer, Nico, 112 Volcker, Paul, 163 Voth, Hans-Joachim, 112 voting and suffrage, xxvii, 26, 79, 105 extension of franchise, 91–98 wages, see income and wages Wallis, John, 97 Washington Post, 108 wealth, 111, 395–96 Wealth of Nations, The (Smith), 80 weavers, 18–19, 116, 188 Weber, Max, 47, 38 Weingast, Barry, 70, 97–98 welfare, 129, 137, 148, 158, 230 Wellman, Andrew, 331 Whigs, 67, 95 William of Orange, 67 Wilson, William Junius, 230, 231 Wilson, Woodrow, 125 Wolf, Martin, 355 workers, 75, 78, 79, 87, 89, 97, 127–28 education and capabilities of, 313–18 insurance plans for, 132 rights of, 360–61 strikes by, 102 unions for, 165, 198, 206, 360, 361 see also income and wages; jobs working at a distance, 219, 220 World Bank, 151, 253–54 World Trade Organization (WTO), 353, 356, 362 World Values Survey, 297 World War I, 103, 112, 124 World War II, xxvii, 138, 139, 140, 143, 145, 146, 155–57, 210, 243, 367 Marshall Plan and, 149–51, 365 postwar period, 148–54 Wulf, Julie, 193 Xi Jinping, 261, 278 Xiushui Market, 255 Yeats, W.

The Price of Inequality: How Today's Divided Society Endangers Our Future by Joseph E. Stiglitz

affirmative action, Affordable Care Act / Obamacare, airline deregulation, Alan Greenspan, Andrei Shleifer, banking crisis, barriers to entry, Basel III, battle of ideas, Bear Stearns, behavioural economics, Berlin Wall, business cycle, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collapse of Lehman Brothers, collective bargaining, colonial rule, corporate governance, Credit Default Swap, Daniel Kahneman / Amos Tversky, Dava Sobel, declining real wages, deskilling, electricity market, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, framing effect, full employment, George Akerlof, Gini coefficient, Glass-Steagall Act, Great Leap Forward, income inequality, income per capita, indoor plumbing, inflation targeting, information asymmetry, invisible hand, jobless men, John Bogle, John Harrison: Longitude, John Markoff, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Arrow, Kenneth Rogoff, London Interbank Offered Rate, lone genius, low interest rates, low skilled workers, Marc Andreessen, Mark Zuckerberg, market bubble, market fundamentalism, mass incarceration, medical bankruptcy, microcredit, moral hazard, mortgage tax deduction, negative equity, obamacare, offshore financial centre, paper trading, Pareto efficiency, patent troll, Paul Samuelson, Paul Volcker talking about ATMs, payday loans, Phillips curve, price stability, profit maximization, profit motive, public intellectual, purchasing power parity, race to the bottom, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Solow, Ronald Coase, Ronald Reagan, Savings and loan crisis, search costs, shareholder value, short selling, Silicon Valley, Simon Kuznets, spectrum auction, Steve Jobs, stock buybacks, subprime mortgage crisis, technology bubble, The Chicago School, The Fortune at the Bottom of the Pyramid, The Myth of the Rational Market, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, Tragedy of the Commons, transaction costs, trickle-down economics, ultimatum game, uranium enrichment, very high income, We are the 99%, wealth creators, women in the workforce, zero-sum game

But because of the dominant role we play in the global economy, we do have opportunities to help shape globalization—opportunities not available to others. In reshaping globalization, we have to realize that there has occurred a race to the bottom from which we have all suffered. The United States is in the best position to stop this (if its politics would allow it); it can fight for better worker rights and conditions, better financial regulations, better environmental conditions. But other countries, working together, can also fight against the race to the bottom. Even the advocates of globalization should understand that tempering globalization is in their interests. For if globalization is not managed better than it has been, there is a real risk of a retreat, into protectionism or forms of beggar-thy-neighbor policies.

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The differences in the return to capital are minuscule compared with those on the return to labor.20 But the financial markets have been driving globalization, and while those who work in financial markets constantly talk about efficiency gains, what they really have in mind is something else—a set of rules that benefits them and increases their advantage over workers. The threat of capital outflow, should workers get too demanding about rights and wages, keeps workers’ wages low.21 Competition across countries for investment takes on many forms—not just lowering wages and weakening worker protections. There is a broader “race to the bottom,” trying to ensure that business regulations are weak and taxes are low. In one arena, finance, this has proven especially costly and especially critical to the growth in inequality. Countries raced to have the least-regulated financial system for fear that financial firms might decamp for other markets.

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Government programs (like the earned-income tax credit, Medicaid, food stamps, and Social Security) have proven very effective in reducing poverty. More spending on these programs could reduce poverty even more. Tempering globalization: creating a more level playing field and ending the race to the bottom Globalization and technology both contribute to the polarization of our labor market, but they are not abstract market forces that just arrive from on high; rather, they are shaped by our policies. We have explained how globalization—especially our asymmetric globalization—is tilted toward putting labor in a disadvantageous bargaining position vis-à-vis capital.

What's Next?: Unconventional Wisdom on the Future of the World Economy by David Hale, Lyric Hughes Hale

"World Economic Forum" Davos, affirmative action, Alan Greenspan, Asian financial crisis, asset-backed security, bank run, banking crisis, Basel III, Bear Stearns, behavioural economics, Berlin Wall, biodiversity loss, Black Swan, Bretton Woods, business cycle, capital controls, carbon credits, carbon tax, Cass Sunstein, central bank independence, classic study, cognitive bias, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, corporate social responsibility, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, debt deflation, declining real wages, deindustrialization, diversification, energy security, Erik Brynjolfsson, Fall of the Berlin Wall, financial engineering, financial innovation, floating exchange rates, foreign exchange controls, full employment, Gini coefficient, Glass-Steagall Act, global macro, global reserve currency, global village, high net worth, high-speed rail, Home mortgage interest deduction, housing crisis, index fund, inflation targeting, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), inverted yield curve, invisible hand, Just-in-time delivery, Kenneth Rogoff, Long Term Capital Management, low interest rates, Mahatma Gandhi, Martin Wolf, Mexican peso crisis / tequila crisis, Mikhail Gorbachev, military-industrial complex, Money creation, money market fund, money: store of value / unit of account / medium of exchange, mortgage tax deduction, Network effects, new economy, Nicholas Carr, oil shale / tar sands, oil shock, open economy, passive investing, payday loans, peak oil, Ponzi scheme, post-oil, precautionary principle, price stability, private sector deleveraging, proprietary trading, purchasing power parity, quantitative easing, race to the bottom, regulatory arbitrage, rent-seeking, reserve currency, Richard Thaler, risk/return, Robert Shiller, Ronald Reagan, Savings and loan crisis, sovereign wealth fund, special drawing rights, subprime mortgage crisis, technology bubble, The Great Moderation, Thomas Kuhn: the structure of scientific revolutions, Tobin tax, too big to fail, total factor productivity, trade liberalization, Tragedy of the Commons, Washington Consensus, Westphalian system, WikiLeaks, women in the workforce, yield curve

Andrew Sheng offers the case for a Tobin tax to finance global public goods. He reviews the origin of the idea in the 1970s and the recent proposal of it by Lord Adair Turner of the Financial Services Authority in London. Sheng says that the world is caught in a collective action trap that encourages a race to the bottom for financial regulation and taxation. He believes that a Tobin tax offers many advantages, including money to finance global public goods, increased data availability on financial transactions, and a tax on bank profits to reduce the bonuses that encourage speculative activity. Sheng estimates that the global value of foreign exchange turnover is $800 trillion and that the value of stock market trading is $101 trillion.

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It is useful to remember that the present fiscal trend of accelerating expenditure and decreasing tax revenues in order to restore excess consumption, which in turn is funded by excess leverage despite limited global resources, is just a race to another crisis. The world is caught in a collective action trap. The gaming nature of nation-state and private-sector behavior is such that there is a tendency to race to the bottom. No country is able to tighten monetary policy alone for fear of inviting hot money that negates the policy. Additionally, no country is able to tighten financial regulation for fear of business migrating to other financial centers. Furthermore, no country is able to raise taxation for fear of massive tax arbitrage.

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Global public goods are currently funded by equity (based on the Bretton Woods system that allocates weighted voting quotas to participating institutions) or by direct national grants. These mechanisms are not sustainable. We need a global tax to fund global public goods. But for a turnover tax to work, it is vital that all of the G-20 countries agree to impose a single, uniform rate of, say, 0.005 percent to avoid a race to the bottom from the onset. This would put into place the module of fiscal standardization and tax mechanism that improves conditions for future coordination in monetary policy and financial regulation. The tax can be collected at the national level based on buyer-pay. The tax collected could be credited to a global fund, with a formula that would allow national governments to use part of the proceeds to resolve domestic crisis problems.

The Secret Barrister: Stories of the Law and How It's Broken by Secret Barrister

cognitive bias, Donald Trump, G4S, glass ceiling, haute cuisine, Intergovernmental Panel on Climate Change (IPCC), mandatory minimum, post-truth, race to the bottom, Schrödinger's Cat, statistical model

Alternatively, they might instruct an ‘independent’ barrister whose independent commitment to professional ethics is not a bar to him slipping Keres a tasty percentage of his brief fee in return for his instructions. Advocates’ fees are paid separately to litigators’ fees and directly to the advocate, to avoid the market distortion and dirty race to the bottom that would ensue if solicitors instructed barristers based not on ability but on how much of the advocacy fee they were willing to shovel the solicitor’s way. And the vast majority of solicitors and barristers observe this strict separation. But every robing room will echo with whispers over that one barrister whose steady influx of high-quality work from a single, Keres-esque firm belies his modest talents, and in less-sober moments at Christmas parties, confessions will slip from mulled lips as to the existence of the informalized, forbidden referral fee lying at the heart of that arrangement.

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Between 2010 and 2015, the National Offender Management Service (NOMS), which, until 2017 (when it was reimagined as HM Prison and Probation Service), was responsible for prisons in England and Wales, had its budget cut by £900 million.33 In order to make nearly £1 billion of savings, prison staffing levels were reduced by 30 per cent. As of 2016, there were 13,720 fewer staff in the public prison estate looking after 450 more people.34 In a drag race to the bottom, ‘benchmarking’ was introduced, in which publicly run jails were required to peg their costs to the same level as the ‘most efficient’ – read ‘cheapest’ – in the private sector. One of the reasons that private sector prisons were so ‘efficient’ is that for seventeen years they have had higher rates of overcrowding than public sector prisons – shoving more prisoners into tinier spaces.35 A quarter of the prison population is overcrowded, with prisoners doubling up in cells designed for one person,36 in order to secure an arbitrary 20 per cent reduction in the cost of prison places (now at £35,000 per year).37 Around the same time, Chris Grayling MP, Secretary of State for Justice between 2012 and 2015, announced his populist plans to make prisons, already hideous tombs of violence, death and terror, ‘less lax’ and more ‘spartan’, introducing severe restrictions on prisoners’ ‘privileges’ – which famously included an unlawful ban on prisoners being sent books38 – and displaying a bizarrely prurient obsession with stopping inmates having sex.39 It was not enough to deprive people of their liberty; their lives had to be made extra intolerable to satisfy the public’s perceived lust for blood.

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Their judgments, in the High Court, Court of Appeal and Supreme Court, have immediate, real-life effects, not only to the applicant or appellant in front of them but to the defendants, victims and public in millions of criminal cases in which precedent is applied. Our constitution relies upon the judges to ensure that government acts in accordance with laws passed by Parliament, and to intervene when the state overreaches to infringe our freedoms. A diminution in quality among the judiciary ultimately diminishes us all. The race-to-the-bottom in criminal justice thus stretches all the way to the top. Every component of the system is infiltrated to some degree by negligent, reckless or malicious maladministration. Of itself, this is hardly unique; professionals in every other area of public life could no doubt regale at similar length legitimate complaints of underfunding and managerial or ministerial incompetence.

The Secret Life of Groceries: The Dark Miracle of the American Supermarket by Benjamin Lorr

activist fund / activist shareholder / activist investor, Affordable Care Act / Obamacare, barriers to entry, Boeing 747, Brownian motion, carbon footprint, collective bargaining, food miles, Ford Model T, global supply chain, hiring and firing, hive mind, independent contractor, Internet Archive, invention of the wheel, inventory management, Isaac Newton, Kanban, low skilled workers, Mason jar, obamacare, off grid, race to the bottom, Ralph Nader, risk tolerance, Ronald Reagan, Silicon Valley, supply-chain management, Toyota Production System, transatlantic slave trade, Upton Sinclair, vertical integration, Wayback Machine, Whole Earth Catalog, women in the workforce

Our current model does a good job at maximizing profits. But to the extent that it works to protect the planet, which it often tries to do very faithfully, it almost always comes out of people.” When I relay this to Errol, he pauses. “That’s not quite how I see it . . . For me the question is, do you want to win a race to the bottom? Or do you want to deliver the highest quality and be the best? Everybody has pressure from the competition. Always will. But it’s how you respond. It can’t just be about cutting things back. Humanity can’t just play defense. We need a good offense too.” We get quiet for a moment and I wonder what that offense would look like.

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See also specific diseases Disneyland, Jungle Cruise, 52 dispatchers, 85–86 displacement, 254 distribution, 60, 75–112 new products and, 138–39n29 retail ecosystem and, 128 specialty, 129 truck drivers and, 89–94 distribution centers, 75–89, 107–12, 296–97n distributors, 60 Dreyer, Dylan, 151–52 driverless trucks, 270 Dunlap, Annette, 133 E. coli outbreaks, 190, 191, 194 ecology, fuzzy math of, 227 e-commerce, 128–29n25 Economist, 251 Edge, Brian, 251 education, alcohol and, 51–52 efficiency, 267, 269 Amazon and, 266 employees and, 178–81 of grocery stores, 5–6 human resources and, 178–80 labor and, 178–80, 180n37 manufacturing and, 174–78 as race to the bottom, 182n38 at Whole Foods, 160–62, 160n33, 182n38, 266 egg brokers, 45–46 eggs, 45–46 employees, 4–5. See also labor dehumanization of, 180–81, 180n37 efficiency and, 178–81 health insurance and, 183 part-time, 179–80 in retail grocery, 157–84 retention of, 182–83, 182n38 at Trader Joe’s, 67–68, 67n17, 169–70 training of, 157–63, 169, 184, 301n treated as cyborgs, 180n37 at Whole Foods, 157–84, 182n38, 270 endcaps, 136, 138 entrepreneurs buyers and, 130–35, 134–35n28 “trade spend” and, 136–38 environmentalism, 57–58.

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For instance, one 2006 study of five hundred retail stores found that every $1 increase in payroll resulted in $3.81 of increased margin. However, its persistence in spite of the research is not accidental, and alludes to the LARGER QUESTION of the title heading: Is this quest for efficiency always a race to the bottom? Or are there equilibrium points whereby efficiency—and outcompeting your rival—can coincide with dignity? This is not a moral question even as our general way of life may hinge on the answer. It is a question about optimization and consumer habits and how exactly the shoppers who purchase from WFs make their purchasing decisions; it is also a question in which my generation of MBAs, both incentivized to find quick earning fixes and insulated from the actual work of retail in a way that transforms abstraction into condescension, may not even be interested in considering.

Ours to Hack and to Own: The Rise of Platform Cooperativism, a New Vision for the Future of Work and a Fairer Internet by Trebor Scholz, Nathan Schneider

1960s counterculture, activist fund / activist shareholder / activist investor, Airbnb, Amazon Mechanical Turk, Anthropocene, barriers to entry, basic income, benefit corporation, Big Tech, bitcoin, blockchain, Build a better mousetrap, Burning Man, business logic, capital controls, circular economy, citizen journalism, collaborative economy, collaborative editing, collective bargaining, commoditize, commons-based peer production, conceptual framework, content marketing, crowdsourcing, cryptocurrency, data science, Debian, decentralized internet, deskilling, disintermediation, distributed ledger, driverless car, emotional labour, end-to-end encryption, Ethereum, ethereum blockchain, food desert, future of work, gig economy, Google bus, hiring and firing, holacracy, income inequality, independent contractor, information asymmetry, Internet of things, Jacob Appelbaum, Jeff Bezos, job automation, Julian Assange, Kickstarter, lake wobegon effect, low skilled workers, Lyft, Mark Zuckerberg, means of production, minimum viable product, moral hazard, Network effects, new economy, offshore financial centre, openstreetmap, peer-to-peer, planned obsolescence, post-work, profit maximization, race to the bottom, radical decentralization, remunicipalization, ride hailing / ride sharing, Rochdale Principles, SETI@home, shareholder value, sharing economy, Shoshana Zuboff, Silicon Valley, smart cities, smart contracts, Snapchat, surveillance capitalism, TaskRabbit, technological solutionism, technoutopianism, transaction costs, Travis Kalanick, Tyler Cowen, Uber for X, uber lyft, union organizing, universal basic income, Vitalik Buterin, W. E. B. Du Bois, Whole Earth Catalog, WikiLeaks, women in the workforce, workplace surveillance , Yochai Benkler, Zipcar

Three-fourths of Americans are living paycheck to paycheck, with little to no emergency savings to rely on if they lose their job. Income inequality is now as bad as it was in 1928, just before the Great Depression. Incredibly, the share of wealth held by the bottom 90 percent is no higher today than during our grandparents’ time. It’s as if the New Deal had never existed. RACE TO THE BOTTOM IN THE FREELANCE SOCIETY Now a new and alarming mash-up of Silicon Valley technology and Wall Street greed is thrusting upon us the latest economic trend: the so-called sharing (or gig) economy. Companies like Uber, Instacart, Upwork, and TaskRabbit allegedly are “liberating workers” to become “independent entrepreneurs” and the “CEOs of their own businesses.”

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The types of jobs on the auction block include website and app designers, software developers, logo and graphic designers, translators, architects, engineers, and more. Workers from India, Thailand, and the developing world compete against developed world workers, undercutting each other’s wages. It’s a race to the bottom. As contractors, these workers don’t receive safety-net benefits because they aren’t “employees” of whoever hires them. They also aren’t paid while they are hustling for their next gig, a never-ending activity. Increasingly, these sorts of online job brokerages comprise a bigger chunk of the overall work force.

Thinking in Systems: A Primer by Meadows. Donella, Diana Wright

affirmative action, agricultural Revolution, Albert Einstein, Buckminster Fuller, business cycle, clean water, Dissolution of the Soviet Union, game design, Garrett Hardin, Gunnar Myrdal, illegal immigration, invisible hand, Just-in-time delivery, Kickstarter, Lewis Mumford, means of production, Mikhail Gorbachev, Nelson Mandela, peak oil, race to the bottom, Ralph Waldo Emerson, Ronald Reagan, Stanford prison experiment, systems thinking, the scientific method, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, Tragedy of the Commons, Whole Earth Review

It is not price information but population information that is needed. It’s important that the missing feedback be restored to the right place and in compelling form. To take another tragedy of the commons example, it’s not enough to inform all the users of an aquifer that the groundwater level is dropping. That could initiate a race to the bottom. It would be more effective to set the cost of water to rise steeply as the pumping rate begins to exceed the recharge rate. Other examples of compelling feedback are not hard to find. Suppose taxpayers got to specify on their return forms what government services their tax payments must be spent on.

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It is a system with rules designed by corporations, run by corporations, for the benefit of corporations. Its rules exclude almost any feedback from any other sector of society. Most of its meetings are closed even to the press (no information flow, no feedback). It forces nations into reinforcing loops “racing to the bottom,” competing with each other to weaken environmental and social safeguards in order to attract corporate investment. It’s a recipe for unleashing “success to the successful” loops, until they generate enormous accumulations of power and huge centralized planning systems that will destroy themselves. 4.

Digital Minimalism: Choosing a Focused Life in a Noisy World by Cal Newport

Black Lives Matter, Burning Man, Cal Newport, data science, Donald Trump, Dunbar number, financial independence, game design, Hacker News, index fund, Jaron Lanier, Kevin Kelly, Kickstarter, lifelogging, longitudinal study, Mark Zuckerberg, Mr. Money Mustache, Pepto Bismol, pre–internet, price discrimination, race to the bottom, ride hailing / ride sharing, Silicon Valley, Skype, Snapchat, Steve Jobs, TED Talk

In a 2016 profile in the Atlantic, Harris blamed the lack of changes to the “inertia” of the organization and a lack of clarity about what he was advocating. The primary source of friction, of course, is almost certainly more simple: Minimizing distraction and respecting users’ attention would reduce revenue. Compulsive use sells, which Harris now acknowledges when he claims that the attention economy drives companies like Google into a “race to the bottom of the brain stem.” So Harris quit, started a nonprofit called Time Well Spent with the mission of demanding technology that “serves us, not advertising,” and went public with his warnings about how far technology companies are going to try to “hijack” our minds. In Washington, DC, where I live, it’s well-known that the biggest political scandals are those that confirm a negative that most people already suspected to be true.

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The tycoons of social media: “Social Media is the New Nicotine | Real Time with Bill Maher (HBO),” YouTube video, 4:54, posted May 12, 2017, https://www.youtube.com/watch?v=KDqoTDM7tio. “This thing is a slot machine”: Tristan Harris, interview with Anderson Cooper, 60 Minutes, https://www.cbsnews.com/video/brain-hacking. “race to the bottom”: Bianca Bosker, “The Binge Breaker,” Atlantic, November 2016, https://www.theatlantic.com/magazine/archive/2016/11/the-binge-breaker/501122. “serves us, not advertising”: This quote comes from an earlier version of the website for Time Well Spent. The organization has since been rebranded as the Center for Humane Technology, and has a new website and new copy: http://humanetech.com.

The Decline and Fall of IBM: End of an American Icon? by Robert X. Cringely

AltaVista, Bernie Madoff, business cycle, business process, Carl Icahn, cloud computing, commoditize, compound rate of return, corporate raider, financial engineering, full employment, Great Leap Forward, if you build it, they will come, immigration reform, interchangeable parts, invention of the telephone, Khan Academy, knowledge worker, low skilled workers, managed futures, Paul Graham, platform as a service, race to the bottom, remote working, Robert Metcalfe, Robert X Cringely, shareholder value, Silicon Valley, six sigma, software as a service, Steve Jobs, stock buybacks, tech worker, TED Talk, Toyota Production System, Watson beat the top human players on Jeopardy!, web application, work culture

The Global Services business could be sold to one or more Indian companies while the current federal business could be sold to one of IBM’s U.S. competitors. Meanwhile, IBM will move its business toward hardware and applications delivered by vendor partners who will carry the Service Level Agreement (SLA) penalty risk. In short, it’s a race to the bottom and only IBM executives are winning. Ultimately it will be IBM’s customers, employees, and shareholders who will be the losers. Yes, but some readers tell me, that’s just services, not the real IBM. There is no real IBM—not any longer. The company has become a cash cow. In IBM’s view, you never feed a cash cow—just take money out until the cow is dead.

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As people have mentioned, if you were a client that just got screwed by this Lean effort, would you renew with IBM? The people I am starting to feel real sorry for are the poor saps who will be left holding the bag when all of the layoffs are done. Our workload, for most folks, is crazy now, but just wait. It seems like it’s a race to the bottom with Sam at the wheel. I don’t see the benefit EXCEPT to break up the company and raid the pension fund. SOMETHING FISHY IS GOING ON AT IBM. Is there any hope left for IBM? | May 04, 2007 | 7:35PM Unpaid overtime is mandatory IBM has been 'lean' for a long time. It's been eight years since I've been allowed to order business cards (cost: $10).

Undoing Border Imperialism by Harsha Walia

Corrections Corporation of America, critical race theory, degrowth, emotional labour, Howard Zinn, illegal immigration, imposter syndrome, informal economy, Internet Archive, mass incarceration, means of production, Mohammed Bouazizi, moral panic, Naomi Klein, Occupy movement, oil shale / tar sands, public intellectual, race to the bottom, Scramble for Africa, Silicon Valley, structural adjustment programs, telemarketer, women in the workforce

There is a valid concern about lowest-common-denominator coalition politics, wherein aligning with others who have a more mainstream analysis will necessarily change the message to a minimalist one that everyone can agree to. Effective campaigns, however, do require us to bring in and work alongside those who may not share our systemic analysis. So how do we build alliances without devolving into a race to the bottom that dilutes our principles? One approach is to build strategic alliances to meet others where they are comfortable, while maintaining the autonomy to shape our own work. In this campaign, instead of a formal coalition, groups are loosely aligned through the overarching framework of End Secret Trials.

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Antioppression analysis becomes rigid in its categorizations when the question becomes who is more oppressed, rather than engaging in a dialogue of how oppression, which is relational and contextual, is specifically manifesting and impacting the orientation of our movements. Oppression develops a strange quantifiable logic, a commodity that can be stocked up on. Antioppression “checklisting” can lead to a race to the bottom, where it is assumed that simply because someone fits into more categories of oppression, they must necessarily be worse off. Working in the poorest postal code in Canada, I know that a straight white cisgendered man who is homeless faces a harsher material reality on a daily basis—with minimal to no access to food, shelter, health care, or income—than me, someone who might be able to count off more forms of oppression, but who does not have to worry about surviving through a cold night on the streets.

Confessions of an Eco-Sinner: Tracking Down the Sources of My Stuff by Fred Pearce

additive manufacturing, air freight, Berlin Wall, biodiversity loss, blood diamond, British Empire, car-free, carbon footprint, clean water, congestion charging, corporate social responsibility, credit crunch, demographic transition, export processing zone, Fall of the Berlin Wall, food miles, ghettoisation, Intergovernmental Panel on Climate Change (IPCC), Isaac Newton, Kibera, Kickstarter, mass immigration, megacity, Nelson Mandela, new economy, oil shale / tar sands, out of africa, peak oil, Pearl River Delta, profit motive, race to the bottom, Shenzhen was a fishing village, Silicon Valley, South China Sea, Steve Jobs, the built environment, urban planning, urban sprawl, women in the workforce

‘H&M buys mostly from Bangladesh now, and M&S is increasingly doing the same,’ Maral’s managers told me. Even M&S? That company used to have a reputation for buying where quality was best. But twice in recent years it has come close to collapse because of uncompetitive pricing. So it has transformed itself into a prime player in what economists call the ‘race to the bottom’. When price is all and the customer wants a £3 T-shirt, then, if the cutters and sewers and ironers and packers come cheaper in Dhaka, that is where they will be employed. So, fascinated as I was by my fairtrade organic detour, it was to Dhaka that I went next. 13 Trouser Snakes: The Strange Truth of Dhaka’s Sweatshops FIVE WOMEN LIVED in the room altogether.

…

How they are moving from Sri Lanka or India or Mauritius to Bangladesh or Cambodia or China to take advantage of lower wages. The only limitation seems to have been the quota systems set up in European and North American governments to protect their own domestic industries. But the quotas are now being abolished. And the ‘race to the bottom’ in the mass marketing of cheap clothes is intensifying. Nazma dismissed Western hand wringing, and said she thought that it would be pressure from within that would ultimately clean up the industry. But she pleaded with customers in Europe not to respond to the obvious injustice with boycotts.

…

The fabric that made the jeans came from the Nassa Group, which was Wal-Mart’s ‘International Supplier of the Year’ in 2002. But M&S didn’t want to give me an introduction to the companies, and without that the companies weren’t interested in talking to me. So I asked Khorshed about them. They weren’t the worst, he said, but not the best either. Just one of the pack in the race to the bottom. I wanted to follow where my jeans came from back to the cotton fields. And here came a surprise. Bangladesh’s largest garment makers want to cement their position in the market by making their own fabric. So they have been scouring the world for supplies of cheap cotton. In the past three years, Bangladesh has become the largest consumer of cotton from the Central Asian state of Uzbekistan. 14 White Gold: My T-shirt, Slave Labour and the Death of the Aral Sea IT IS AN old story, but with an unpalatable new twist.

Tools and Weapons: The Promise and the Peril of the Digital Age by Brad Smith, Carol Ann Browne

"World Economic Forum" Davos, Affordable Care Act / Obamacare, AI winter, air gap, airport security, Alan Greenspan, Albert Einstein, algorithmic bias, augmented reality, autonomous vehicles, barriers to entry, Berlin Wall, Big Tech, Bletchley Park, Blitzscaling, Boeing 737 MAX, business process, call centre, Cambridge Analytica, Celtic Tiger, Charlie Hebdo massacre, chief data officer, cloud computing, computer vision, corporate social responsibility, data science, deep learning, digital divide, disinformation, Donald Trump, Eben Moglen, Edward Snowden, en.wikipedia.org, Hacker News, immigration reform, income inequality, Internet of things, invention of movable type, invention of the telephone, Jeff Bezos, Kevin Roose, Laura Poitras, machine readable, Mark Zuckerberg, minimum viable product, national security letter, natural language processing, Network effects, new economy, Nick Bostrom, off-the-grid, operational security, opioid epidemic / opioid crisis, pattern recognition, precision agriculture, race to the bottom, ransomware, Ronald Reagan, Rubik’s Cube, Salesforce, school vouchers, self-driving car, Sheryl Sandberg, Shoshana Zuboff, Silicon Valley, Skype, speech recognition, Steve Ballmer, Steve Jobs, surveillance capitalism, tech worker, The Rise and Fall of American Growth, Tim Cook: Apple, Wargames Reagan, WikiLeaks, women in the workforce

But we worried that there would be little practical impact if we took the high road only to be undercut by companies that imposed no safeguards or restrictions at all, whether those companies were on the other side of Seattle or on the other side of the Pacific. Facial recognition, like so many AI-based technologies, improves with larger quantities of data. This creates an incentive to do as many early deals as possible and hence the risk of a commercial race to the bottom, with tech companies forced to choose between social responsibility and market success. The only way to protect against this race to the bottom is to build a floor of responsibility that supports healthy market competition. And a solid floor requires that we ensure that this technology, and the organizations that develop and use it, are governed by the rule of law.

…

Brad Smith, “Facial Recognition Technology: The Need for Public Regulation and Corporate Responsibility,” Microsoft on the Issues (blog), Microsoft, July 13, 2018, https://blogs.microsoft.com/on-the-issues/2018/07/13/facial-recognition-technology-the-need-for-public-regulation-and-corporate-responsibility/. Back to note reference 14. Nitasha Tiku, “Microsoft Wants to Stop AI’s ‘Race to the Bottom,’” Wired, December 6, 2018, https://www.wired.com/story/microsoft-wants-stop-ai-facial-recognition-bottom/. Back to note reference 15. Eric Ries, The Startup Way: How Modern Companies Use Entrepreneurial Management to Transform Culture and Drive Long-Term Growth (New York: Currency, 2017), 96.

After the New Economy: The Binge . . . And the Hangover That Won't Go Away by Doug Henwood

"World Economic Forum" Davos, accounting loophole / creative accounting, affirmative action, Alan Greenspan, AOL-Time Warner, Asian financial crisis, barriers to entry, Benchmark Capital, book value, borderless world, Branko Milanovic, Bretton Woods, business cycle, California energy crisis, capital controls, corporate governance, corporate raider, correlation coefficient, credit crunch, deindustrialization, dematerialisation, deskilling, digital divide, electricity market, emotional labour, ending welfare as we know it, feminist movement, fulfillment center, full employment, gender pay gap, George Gilder, glass ceiling, Glass-Steagall Act, Gordon Gekko, government statistician, greed is good, half of the world's population has never made a phone call, income inequality, indoor plumbing, intangible asset, Internet Archive, job satisfaction, joint-stock company, Kevin Kelly, labor-force participation, Larry Ellison, liquidationism / Banker’s doctrine / the Treasury view, low interest rates, manufacturing employment, Mary Meeker, means of production, Michael Milken, minimum wage unemployment, Naomi Klein, new economy, occupational segregation, PalmPilot, pets.com, post-work, profit maximization, purchasing power parity, race to the bottom, Ralph Nader, rewilding, Robert Gordon, Robert Shiller, Robert Solow, rolling blackouts, Ronald Reagan, shareholder value, Silicon Valley, Simon Kuznets, statistical model, stock buybacks, structural adjustment programs, tech worker, Telecommunications Act of 1996, telemarketer, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, total factor productivity, union organizing, War on Poverty, warehouse automation, women in the workforce, working poor, zero-sum game

Boihng this down into a soundbite: capitalism has always produced poverty alongside wealth, and capitalism has from the first been an international and internationalizing system—so it makes little sense to try to isolate the "global" aspect as the major culprit in the production of inequality. The MNC Those who identify globalization as the major force behind the production of inequality frequently point to an alleged "race to the bottom," driven by multinational corporations (MNCs) who constantly ransack the globe searching for low costs and high returns.This too isn't as easy a case to prove as one might think. After the New Economy Despite popular images of multinationals scouring the world for maximum return, going abroad seems to lower, rather than raise, profits (CHck and Harrison 2000).

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See income pensions, Enron-style, 35 Petras, James, 150,178 Pets.com, 196 phlogiston, 51 place, meaning of, 147-148 Plender, John, 35 Polanyi, Karl, 167 polarization, 29, 225; see also income distribution; wealth distribution pohtics of finance, 202-207 267 and income distribution, 79—81 market democracy, 22 polls New Economy, 31—32,231 poverty and, 110 Pope, Carl, 162 pop culture, stock market and, 187 portfolio investment, 176 Porto Alegre, 185 potential GDP, 47 poverty, 105-114 absolute vs. relative, 109—111 composition of the poor, 111-114 defining, over time, 106-109 global perspective, 129-130,133-141 historical perspective, 106,111—114 popular perceptions, 110 see also income distribution "poverty line," coinage of phrase, 237 Prins, Nomi, 196 privatization, 221,231 productivity 1960s enthusiasm, 8 acceleration in, accounting for, 56-62 and the business cycle, 47 competing estimates, 60-61 definitions, 41—42 and deflation, 228 and earnings, 45, 56 high-tech vs. rest, 52—54 historical perspective, 48 by industry, 49, 64—67 international comparisons, 41—42 labor, 41 measurement problems, 42—45, 58—60 multifactor (total factor), 41,45 historical perspective, 49 outsourcing and, 51-52 where it went, 56 and workload, 39—41 work hours, measuring, 67 profitability historical view, 203—204 MNCs and, 157 prosocial behavior, 76 protectionism, 220 public subsidy to private sector, 6 purchasing power parity, 131, 238 quabty changes, measuring, 43—45 declines in, 55-56 inputs, adjusting for, 58 Quattrone, Frank, 199 Qwest, 197 race educational attainment, 98—99 Gilder on, 12-13 wealth distribution and, 125—126 race to the bottom, 155 racism and nationahsm, 239 neo- or diflferentiahst, 172—173 Ramone, Joey, 190 Rand, Ayn, 15 Rapaille, G. Clothaire, 146 Reagan, Ronald, 8 recessions, political purpose, 182 regionahzation, 159 Reich, Robert, 71,74 retail trade, 64-66 Riflcin, Jeremy, 68 Robinson, Joan, 235 Robinson, William, 175-176 Rockefeller, David, 232 Rubin, Robert, 218 ruling class, global, 174—178 Russell, Marta, 100 sad militants, 185 Sakakibara, Eisuke, 228 Index Sale, Kirkpatrick, 168 Salomon Smith Barney, 197 scale, economic, 167-168 Scandinavia, very wired, 6 Schama, Simon, 23 Schrager, Ian, 233 Schwab, Klaus, 175-178 Seattle, anti-WTO protests, 32,160 sex, Gilder on, 11—13 sexual preference and pay, 100 sex discrimination, 94—101 international comparisons, 101—102 Shakespeare, 188 shareholder activism, 214 Shiller, Robert, 6-8,25-27,194 Shiva, Vandana, 162,168-169 Shorrock.Tim, 171 Sichel, Daniel, 57 Silicon Valley, income distribution, 105 Silicon Valley Toxics CoaUtion, 232 Sinai, Allen, 4 Singhne, Peter, 18 Skilhng, Jeffirey, 33 skills, job, 73-77 returns to, 86—87 skin shade and pay, 99 Smith, Adam, 109-110, 163,173 Smith, Patti, 183 Smith, Paul, 6 social democracy, 139-143,182 social movements, new, 179 Social Security, 227 Solow, Robert, 3 sovereignty, 170 space, shrinkage of, 146 speedup, 215, 229 Spencer, Herbert, 37 state, retreat of, 150-152 Stigbtz, Joseph, 193 Stiroh,Kevin,51,57 stock market 1990s bubble, history, 188-189 analysts' role, 194—200 anomalies, 194 book value, defined, 233 brokers' fees and salaries, 201-202 and corporate profitability, 203—204 and corporate restructuring, 214-215 economics of, 187-188,192-195 and evolution of the corporation, 212-217 excess volatiHty, 194 happiness of investors, 212 and managers' pay, 216—217 and pop culture, 187 psychology of, 25—26 trading frequency and returns, 190—191, 234,239 wisdom of, 35 see also finance stock options, 216—217 and wealth distribution, 126—127 stock ownership, distribution of, 24, 122-124 stress, management by, 25 stylish shoes, 165 Summers, Lawrence, 5,231 surveillance, 68,77—78 Survey of Consumer Finances, 118—119 Survey of Income and Program Participation, 118 symbolic analysts, 71,72 synergy vs. conflict, 197-200 Taylorism, 78 technology not evil, 2 and social movements, 179 telecommunications industry, 196—198 telegraph, 7 telemarketers, 68 TheGlobe.com, 189 269 TheStreet.com, 31 dme, acceleration of, 146 Tocqueville, Alexis de, 82,139 Tompkins, Doug, 161-162 total factor productivity.

Prediction Machines: The Simple Economics of Artificial Intelligence by Ajay Agrawal, Joshua Gans, Avi Goldfarb

Abraham Wald, Ada Lovelace, AI winter, Air France Flight 447, Airbus A320, algorithmic bias, AlphaGo, Amazon Picking Challenge, artificial general intelligence, autonomous vehicles, backpropagation, basic income, Bayesian statistics, Black Swan, blockchain, call centre, Capital in the Twenty-First Century by Thomas Piketty, Captain Sullenberger Hudson, carbon tax, Charles Babbage, classic study, collateralized debt obligation, computer age, creative destruction, Daniel Kahneman / Amos Tversky, data acquisition, data is the new oil, data science, deep learning, DeepMind, deskilling, disruptive innovation, driverless car, Elon Musk, en.wikipedia.org, Erik Brynjolfsson, everywhere but in the productivity statistics, financial engineering, fulfillment center, general purpose technology, Geoffrey Hinton, Google Glasses, high net worth, ImageNet competition, income inequality, information retrieval, inventory management, invisible hand, Jeff Hawkins, job automation, John Markoff, Joseph Schumpeter, Kevin Kelly, Lyft, Minecraft, Mitch Kapor, Moneyball by Michael Lewis explains big data, Nate Silver, new economy, Nick Bostrom, On the Economy of Machinery and Manufactures, OpenAI, paperclip maximiser, pattern recognition, performance metric, profit maximization, QWERTY keyboard, race to the bottom, randomized controlled trial, Ray Kurzweil, ride hailing / ride sharing, Robert Solow, Salesforce, Second Machine Age, self-driving car, shareholder value, Silicon Valley, statistical model, Stephen Hawking, Steve Jobs, Steve Jurvetson, Steven Levy, strong AI, The Future of Employment, the long tail, The Signal and the Noise by Nate Silver, Tim Cook: Apple, trolley problem, Turing test, Uber and Lyft, uber lyft, US Airways Flight 1549, Vernor Vinge, vertical integration, warehouse automation, warehouse robotics, Watson beat the top human players on Jeopardy!, William Langewiesche, Y Combinator, zero-sum game

We end the book in part five by applying our economists’ tool kit to questions that affect society more broadly, examining five of the most common AI debates: Will there still be jobs? Yes. Will this generate more inequality? Perhaps. Will a few large companies control everything? It depends. Will countries engage in race-to-the-bottom policy making and forfeit our privacy and security to give their domestic companies a competitive advantage? Some will. Will the world end? You still have plenty of time to derive value from this book. KEY POINTS * * * Economics offers clear insights regarding the business implications of cheaper prediction.

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Furthermore, incumbent Baidu is using a facial recognition AI to authenticate customers collecting their rail tickets and tourists accessing attractions.22 By contrast, in Europe, privacy regulation makes data access far more stringent than elsewhere, which may shut out European firms from AI leadership altogether. These factors may create a race to the bottom as countries compete to relax privacy restrictions to improve their AI position. However, citizens and consumers value privacy; it’s not a regulation that only companies care about. There is a basic trade-off between intrusion and personalization and a potential for customer dissatisfaction associated with acquiring user data.

The Growth Delusion: Wealth, Poverty, and the Well-Being of Nations by David Pilling

Airbnb, Alan Greenspan, banking crisis, Bernie Sanders, Big bang: deregulation of the City of London, Branko Milanovic, call centre, carbon tax, centre right, clean tech, clean water, collapse of Lehman Brothers, collateralized debt obligation, commoditize, Credit Default Swap, credit default swaps / collateralized debt obligations, dark matter, Deng Xiaoping, Diane Coyle, Donald Trump, double entry bookkeeping, Easter island, Erik Brynjolfsson, falling living standards, financial deregulation, financial engineering, financial intermediation, financial repression, Gini coefficient, Glass-Steagall Act, Goldman Sachs: Vampire Squid, Google Hangouts, Great Leap Forward, Hans Rosling, happiness index / gross national happiness, Higgs boson, high-speed rail, income inequality, income per capita, informal economy, invisible hand, Jeremy Corbyn, job satisfaction, Mahatma Gandhi, Mahbub ul Haq, market fundamentalism, Martin Wolf, means of production, military-industrial complex, Monkeys Reject Unequal Pay, mortgage debt, off grid, old-boy network, Panopticon Jeremy Bentham, peak oil, performance metric, pez dispenser, profit motive, purchasing power parity, race to the bottom, rent-seeking, Robert Gordon, Ronald Reagan, Rory Sutherland, science of happiness, shareholder value, sharing economy, Simon Kuznets, sovereign wealth fund, TED Talk, The Great Moderation, The Wealth of Nations by Adam Smith, Thomas Malthus, total factor productivity, Tragedy of the Commons, transaction costs, transfer pricing, trickle-down economics, urban sprawl, women in the workforce, World Values Survey

Probably the next financial crisis will be a little bit different.” * * * — Just to be absolutely clear: the 2008 banking crisis, whose effects were still rippling through the world nearly a decade later, cannot be blamed on the way we account for financial services in our national accounts. The crisis had its roots in race-to-the-bottom deregulation, naive faith in the capacity of markets to self-correct, and a perverse “shareholder-value” ideology that allowed a few thousand masters-of-the-universe bankers to ransack their own institutions while simultaneously feeling good about themselves. There were many other factors, from the hugely increased (and unnecessary) mathematical complexity of financial instruments to the inherently corrupt relationship between the ratings agencies and the clients who paid them.

…

It goes against what Westerners in general, and Americans in particular, have taken for granted.”5 Growing inequality explained some of what was going on. Median wages had more or less stagnated since the 1970s, partly due to a loss of bargaining power by unions, a trend that has been replicated in most of the industrial world as the tenets of free-market capitalism encouraged a race to the bottom. In the US the share of economic output going to wages has been falling steadily for decades, with more going to corporate profits and capital. That exacerbates inequalities and penalizes people who have to work for a living, particularly those with skills that can be outsourced, mechanized, or computerized.

Humans as a Service: The Promise and Perils of Work in the Gig Economy by Jeremias Prassl

3D printing, Affordable Care Act / Obamacare, Airbnb, algorithmic management, Amazon Mechanical Turk, Andrei Shleifer, asset light, autonomous vehicles, barriers to entry, call centre, cashless society, Clayton Christensen, collaborative consumption, collaborative economy, collective bargaining, creative destruction, crowdsourcing, death from overwork, Didi Chuxing, disruptive innovation, Donald Trump, driverless car, Erik Brynjolfsson, full employment, future of work, George Akerlof, gig economy, global supply chain, Greyball, hiring and firing, income inequality, independent contractor, information asymmetry, invisible hand, Jeff Bezos, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Kevin Roose, Kickstarter, low skilled workers, Lyft, machine readable, Mahatma Gandhi, Mark Zuckerberg, market friction, means of production, moral hazard, Network effects, new economy, obamacare, pattern recognition, platform as a service, Productivity paradox, race to the bottom, regulatory arbitrage, remote working, ride hailing / ride sharing, Robert Gordon, Ronald Coase, Rosa Parks, scientific management, Second Machine Age, secular stagnation, self-driving car, shareholder value, sharing economy, Silicon Valley, Silicon Valley billionaire, Silicon Valley ideology, Simon Singh, software as a service, Steve Jobs, TaskRabbit, TechCrunch disrupt, The Future of Employment, The Market for Lemons, The Nature of the Firm, The Rise and Fall of American Growth, transaction costs, transportation-network company, Travis Kalanick, two tier labour market, two-sided market, Uber and Lyft, Uber for X, uber lyft, union organizing, warehouse automation, work culture , working-age population

odesk.com/content/Elance-oDeskAnnualImpactReport2014.pdf, archived at * * * 162 Notes https://perma.cc/48BE-G7U7; Lilly Irani and M. Six Silberman, ‘Turkopticon: interrupting worker invisibility in Amazon Mechanical Turk’ (2013) CHI 2013, Changing Perspectives, Paris, France; ‘Is digital expert knowledge facing a race to the bottom?’, a-connect (undated), http://www.a-connect.com/acknowledge/is- digital-expert-knowledge-facing-a-race-to-the-bottom/, archived at https:// perma.cc/8ZJ3-P3X4. This tallies with research commissioned by the World Bank, which estimates that a typical online freelancer on Elance-oDesk (now Upwork) or Freelancer.com will work 20–40 hours per week and earn US$200– 750 per month, whilst only ‘a small subset of highly skilled workers . . . can earn up to $3000 per month’: Siou Chew Kuek, Cecilia Paradi-Guilford, Toks Fayomi, Soari Imaizumi, and Panos Ipeirotis, ‘The Global Opportunity in Online Outsourcing’ (World Bank 2015), 42, http://www.ipeirotis.com/wp-content/ uploads/2015/05/The-World-Bank-The-Global-Opportunity-in-Online- Outsourcing.pdf, archived at https://perma.cc/2AGP-TME6 42.

China's Superbank by Henry Sanderson, Michael Forsythe

"World Economic Forum" Davos, addicted to oil, Asian financial crisis, Bretton Woods, BRICs, Carmen Reinhart, Credit Default Swap, deindustrialization, Deng Xiaoping, Dutch auction, failed state, financial innovation, financial repression, fixed income, Great Leap Forward, high-speed rail, if you build it, they will come, income inequality, invisible hand, joint-stock company, junk bonds, Kenneth Rogoff, land bank, London Interbank Offered Rate, low interest rates, megacity, new economy, New Urbanism, price mechanism, race to the bottom, reserve currency, Ronald Reagan, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Solyndra, South Sea Bubble, sovereign wealth fund, special drawing rights, special economic zone, too big to fail, urban renewal, urban sprawl, work culture

A few months later, SolarWorld went on to lead a group of manufacturers requesting that the European Commission investigate whether Chinese companies were dumping products at below-market rates. Any EU action was potentially much more serious, as it was a far larger market for Chinese goods. This time, the Chinese solar makers gathered again in Beijing to urge the Chinese government to protect their interests. In the race to the bottom, who would be the last man standing? As prices fall further, narrowing the gap with traditional forms of energy, China’s solar firms, having exported abroad for years, can sell at home or move manufacturing overseas, helped by CDB. In China, bankruptcies and defaults do not happen when the market wants them to, especially when the debt is due to domestic banks and not overseas foreign lenders.

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Changing our centuries-long addiction to oil and fossil fuels is not an easy task; the costs of renewable energy and the difficulties of changing the way we live make the industry a perfect fit for development banks in the early stages. In late 2011, China doubled its 2015 solar power goal. With such political support from the top and a development bank the size of CDB, China is hugely competitive, especially since not many other countries have the stomach to support an industry in a race to the bottom. Solar has followed the course of other industries in the country: becoming cost efficient by exporting to the West, and then selling to the growing domestic market. Yet other development banks, such as Brazil’s BNDES, will surely catch up to match the support. It will become a battle of subsidies.

Crisis Economics: A Crash Course in the Future of Finance by Nouriel Roubini, Stephen Mihm

Alan Greenspan, Asian financial crisis, asset-backed security, balance sheet recession, bank run, banking crisis, barriers to entry, Bear Stearns, behavioural economics, Berlin Wall, Bernie Madoff, Big bang: deregulation of the City of London, Black Swan, bond market vigilante , bonus culture, Bretton Woods, BRICs, British Empire, business cycle, call centre, capital controls, Carmen Reinhart, central bank independence, centralized clearinghouse, collapse of Lehman Brothers, collateralized debt obligation, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, dark matter, David Ricardo: comparative advantage, debt deflation, Eugene Fama: efficient market hypothesis, Fall of the Berlin Wall, fiat currency, financial deregulation, financial engineering, financial innovation, Financial Instability Hypothesis, financial intermediation, full employment, George Akerlof, Glass-Steagall Act, global pandemic, global reserve currency, Gordon Gekko, Greenspan put, Growth in a Time of Debt, housing crisis, Hyman Minsky, information asymmetry, interest rate swap, invisible hand, Joseph Schumpeter, junk bonds, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, London Interbank Offered Rate, Long Term Capital Management, Louis Bachelier, low interest rates, margin call, market bubble, market fundamentalism, Martin Wolf, means of production, Minsky moment, money market fund, moral hazard, mortgage debt, mortgage tax deduction, new economy, Northern Rock, offshore financial centre, oil shock, Paradox of Choice, paradox of thrift, Paul Samuelson, Ponzi scheme, price stability, principal–agent problem, private sector deleveraging, proprietary trading, pushing on a string, quantitative easing, quantitative trading / quantitative finance, race to the bottom, random walk, regulatory arbitrage, reserve currency, risk tolerance, Robert Shiller, Satyajit Das, Savings and loan crisis, savings glut, short selling, South Sea Bubble, sovereign wealth fund, special drawing rights, subprime mortgage crisis, Suez crisis 1956, The Great Moderation, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, too big to fail, tulip mania, Tyler Cowen, unorthodox policies, value at risk, We are all Keynesians now, Works Progress Administration, yield curve, Yom Kippur War

As a consequence, there’s a “race to the bottom,” as banks and other financial firms search for the regulator that will regulate them the least. Regulators may have exacerbated the problem in recent years. Here’s why: when banks choose their own regulators—and gravitate toward those that promise the least oversight—more rigorous regulatory agencies may see their domain erode. And a regulator with no one to regulate has no reason to exist. So regulators have every incentive to be lenient in order to attract more financial institutions into their regulatory nets. Here too we have a race to the bottom. Such is the paradox of choice or “regulatory shopping.”

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This dynamic was comparable to an arms race: Ireland announcing a blanket guarantee forced other countries to do the same or at least raise the ceiling. The reason was simple: depositors could readily shift their money out of countries with limited guarantees and place it in safer havens. As a result, governments could not hold the line against moral hazard. It was a race to the bottom. Other kinds of deposits came under the umbrella of government insurance programs. In the United States, the National Credit Union Administration (NCUA), a kind of FDIC for credit unions, took over two beleaguered members—U.S. Central and WesCorp—and then pledged $80 billion to cover the losses on all deposits in all credit unions throughout the country.

The Vanishing Middle Class: Prejudice and Power in a Dual Economy by Peter Temin

2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, American Legislative Exchange Council, American Society of Civil Engineers: Report Card, anti-communist, Bernie Sanders, Branko Milanovic, Bretton Woods, business cycle, capital controls, Capital in the Twenty-First Century by Thomas Piketty, carried interest, clean water, corporate raider, Corrections Corporation of America, crack epidemic, deindustrialization, desegregation, Donald Trump, driverless car, Edward Glaeser, Ferguson, Missouri, financial innovation, financial intermediation, floating exchange rates, full employment, income inequality, independent contractor, intangible asset, invisible hand, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, manufacturing employment, Mark Zuckerberg, mass immigration, mass incarceration, means of production, mortgage debt, Network effects, New Urbanism, Nixon shock, Nixon triggered the end of the Bretton Woods system, obamacare, offshore financial centre, oil shock, plutocrats, Powell Memorandum, price stability, race to the bottom, road to serfdom, Robert Solow, Ronald Reagan, Savings and loan crisis, secular stagnation, Silicon Valley, Simon Kuznets, the scientific method, War on Poverty, Washington Consensus, white flight, working poor

“Public and Private Partnerships: Accounting for the New Religion.” Harvard Law Review 115 (5) (March): 1229–1284. Morgenson, Gretchen. 2015. “A Student Loan System Stacked against the Borrower.” New York Times, October 9. Mortenson, Thomas G. 2012. “State Funding: A Race to the Bottom.” American Council on Education, Winter. http://www.acenet.edu/the-presidency/columns-and-features/Pages/state-funding-a-race-to-the-bottom.aspx. Accessed September 22, 2016. Moss, David A. 2002. When All Else Fails: Government as the Ultimate Risk Manager. Cambridge, MA: Harvard University Press. Murray, Charles. 2012. Coming Apart: The State of White America, 1960–2010.

Meltdown: How Greed and Corruption Shattered Our Financial System and How We Can Recover by Katrina Vanden Heuvel, William Greider

Alan Greenspan, Asian financial crisis, banking crisis, Bear Stearns, Bretton Woods, business cycle, buy and hold, capital controls, carried interest, central bank independence, centre right, collateralized debt obligation, conceptual framework, corporate governance, creative destruction, credit crunch, Credit Default Swap, credit default swaps / collateralized debt obligations, declining real wages, deindustrialization, Exxon Valdez, falling living standards, financial deregulation, financial innovation, Financial Instability Hypothesis, fixed income, floating exchange rates, full employment, Glass-Steagall Act, green new deal, guns versus butter model, housing crisis, Howard Zinn, Hyman Minsky, income inequality, information asymmetry, It's morning again in America, John Meriwether, junk bonds, kremlinology, Long Term Capital Management, low interest rates, margin call, market bubble, market fundamentalism, McMansion, Michael Milken, Minsky moment, money market fund, mortgage debt, Naomi Klein, new economy, Nixon triggered the end of the Bretton Woods system, offshore financial centre, payday loans, pets.com, plutocrats, Ponzi scheme, price stability, pushing on a string, race to the bottom, Ralph Nader, rent control, Robert Shiller, Ronald Reagan, Savings and loan crisis, savings glut, sovereign wealth fund, structural adjustment programs, subprime mortgage crisis, The Great Moderation, too big to fail, trade liberalization, transcontinental railway, trickle-down economics, union organizing, wage slave, Washington Consensus, women in the workforce, working poor, Y2K

When I asked Rubin to consider labor’s critique and its argument for global labor standards, I was pleasantly surprised that he did not brush off the question. Instead, we had an engaging back-and-forth. Without global rights for workers to organize and some version of a minimum wage pegged to each country’s economic conditions, the “race to the bottom” is sure to continue, I suggest. When workers start mobilizing for higher wages, multinationals counter by moving production to the next available cheap labor market. Middle-class wages fall at the top, but the bottom does not rise as rapidly as it should. “But it’s a complicated question,” Rubin responds.

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Then there is improving the financial system’s own risk-han-dling mechanisms. Obama should attack the British position. Prime Minister Gordon Brown advocates more effective cross-border financial regulation, but not so much as to endanger the City of London’s standing as home of minimal regulation—in a race to the bottom with New York. This has to change. Obama should pick up the Financial Stability Forum’s proposal that global trade in financial derivatives be organized in licensed exchanges. If London wants the current casino, let the bulk of the trade be organized out of New York. But more importantly, the U.S. should insist that there be an international college of financial regulators which it will host, fund and coordinate.

The Future of Capitalism: Facing the New Anxieties by Paul Collier

"Friedman doctrine" OR "shareholder theory", accounting loophole / creative accounting, Airbnb, An Inconvenient Truth, assortative mating, bank run, Bear Stearns, behavioural economics, Berlin Wall, Bernie Sanders, bitcoin, Bob Geldof, bonus culture, business cycle, call centre, central bank independence, centre right, commodity super cycle, computerized trading, corporate governance, creative destruction, cuban missile crisis, David Brooks, delayed gratification, deskilling, Donald Trump, eurozone crisis, fake news, financial deregulation, full employment, George Akerlof, Goldman Sachs: Vampire Squid, greed is good, income inequality, industrial cluster, information asymmetry, intangible asset, Jean Tirole, Jeremy Corbyn, job satisfaction, John Perry Barlow, Joseph Schumpeter, knowledge economy, late capitalism, loss aversion, Mark Zuckerberg, minimum wage unemployment, moral hazard, negative equity, New Urbanism, Northern Rock, offshore financial centre, out of africa, Peace of Westphalia, principal–agent problem, race to the bottom, rent control, rent-seeking, rising living standards, Robert Shiller, Robert Solow, Ronald Reagan, shareholder value, Silicon Valley, Silicon Valley ideology, sovereign wealth fund, The Wealth of Nations by Adam Smith, theory of mind, too big to fail, trade liberalization, urban planning, web of trust, zero-sum game

While we cannot afford to fall behind global standards, the teenage years should not be turned into a junior version of the toxic rivalries of an investment bank. As to those toxic rivalries, a story that hit the headlines in 2013 was of a summer intern at an investment bank, so keen to impress that he worked a twenty-hour day before dropping dead. This is an extreme instance of a race to the bottom that drives groups of people to become workaholics. Everybody would gain from working less, but no individual dares to step out of line: they would lose out in the race for promotion, and by breaching prevailing norms they would lose esteem. This is a classic co-ordination problem and it has a straightforward solution – public policy.

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The capacity to tax and regulate remains firmly lodged at the national level. As I discussed in Chapter 6, our supranational co-ordination mechanisms – the OECD, the IMF, the EU, the G7 and the G20 – have lost the capacity to forge binding reciprocal obligations underpinned by enlightened self-interest. Each nation prefers to compete in a race to the bottom. This defeat of governance has been the ugliest reality of modern globalization. Having been the epicentre of the problem, in its presidency of the G8 in 2013, Britain began to lead the way in trying to address it.* For example, the UK pioneered a crackdown on ‘shell companies’ through which lawyers conceal asset ownership; the country now has a compulsory public register of the true ownership of all British companies, closing a major conduit for corrupt money.

Butler to the World: How Britain Became the Servant of Tycoons, Tax Dodgers, Kleptocrats and Criminals by Oliver Bullough

Alan Greenspan, Bellingcat, Big bang: deregulation of the City of London, Big Tech, bitcoin, Black Lives Matter, blockchain, Boris Johnson, Bretton Woods, Brexit referendum, British Empire, capital controls, coronavirus, COVID-19, crowdsourcing, cryptocurrency, cuban missile crisis, Downton Abbey, Etonian, financial deregulation, financial innovation, full employment, Global Witness, John Bercow, Julian Assange, light touch regulation, lockdown, Nixon triggered the end of the Bretton Woods system, offshore financial centre, race to the bottom, rent-seeking, Ronald Reagan, Shoshana Zuboff, Silicon Valley, Suez canal 1869, Suez crisis 1956, surveillance capitalism, the High Line, WikiLeaks

‘I’ve just been chatting to someone today about an ethical problem that’s arisen as a result of exactly this – where a commercial dispute has gone sour, and the loser in the commercial dispute is seeking to bring a private prosecution, not necessarily because he or she is particularly fussed about the interests of justice, but simply because they want revenge,’ said one lawyer. ‘If you remove the objectivity, which is what you get when being prosecuted by the state, then it’s a race to the bottom, or a race to the bottom of the pockets anyway. We are on that trajectory. It raises the startling prospect of two Russian oligarchs slugging it out in the commercial courts, and then one of them deciding suddenly he’s going to bring a private prosecution against the other. Once that happens, all gloves are off.’

Connectography: Mapping the Future of Global Civilization by Parag Khanna

"World Economic Forum" Davos, 1919 Motor Transport Corps convoy, 2013 Report for America's Infrastructure - American Society of Civil Engineers - 19 March 2013, 9 dash line, additive manufacturing, Admiral Zheng, affirmative action, agricultural Revolution, Airbnb, Albert Einstein, amateurs talk tactics, professionals talk logistics, Amazon Mechanical Turk, Anthropocene, Asian financial crisis, asset allocation, autonomous vehicles, banking crisis, Basel III, Berlin Wall, bitcoin, Black Swan, blockchain, borderless world, Boycotts of Israel, Branko Milanovic, BRICs, British Empire, business intelligence, call centre, capital controls, Carl Icahn, charter city, circular economy, clean water, cloud computing, collateralized debt obligation, commoditize, complexity theory, continuation of politics by other means, corporate governance, corporate social responsibility, credit crunch, crony capitalism, crowdsourcing, cryptocurrency, cuban missile crisis, data is the new oil, David Ricardo: comparative advantage, deglobalization, deindustrialization, dematerialisation, Deng Xiaoping, Detroit bankruptcy, digital capitalism, digital divide, digital map, disruptive innovation, diversification, Doha Development Round, driverless car, Easter island, edge city, Edward Snowden, Elon Musk, energy security, Ethereum, ethereum blockchain, European colonialism, eurozone crisis, export processing zone, failed state, Fairphone, Fall of the Berlin Wall, family office, Ferguson, Missouri, financial innovation, financial repression, fixed income, forward guidance, gentrification, geopolitical risk, global supply chain, global value chain, global village, Google Earth, Great Leap Forward, Hernando de Soto, high net worth, high-speed rail, Hyperloop, ice-free Arctic, if you build it, they will come, illegal immigration, income inequality, income per capita, industrial cluster, industrial robot, informal economy, Infrastructure as a Service, interest rate swap, Intergovernmental Panel on Climate Change (IPCC), Internet of things, Isaac Newton, Jane Jacobs, Jaron Lanier, John von Neumann, Julian Assange, Just-in-time delivery, Kevin Kelly, Khyber Pass, Kibera, Kickstarter, LNG terminal, low cost airline, low earth orbit, low interest rates, manufacturing employment, mass affluent, mass immigration, megacity, Mercator projection, Metcalfe’s law, microcredit, middle-income trap, mittelstand, Monroe Doctrine, Multics, mutually assured destruction, Neal Stephenson, New Economic Geography, new economy, New Urbanism, off grid, offshore financial centre, oil rush, oil shale / tar sands, oil shock, openstreetmap, out of africa, Panamax, Parag Khanna, Peace of Westphalia, peak oil, Pearl River Delta, Peter Thiel, Philip Mirowski, Planet Labs, plutocrats, post-oil, post-Panamax, precautionary principle, private military company, purchasing power parity, quantum entanglement, Quicken Loans, QWERTY keyboard, race to the bottom, Rana Plaza, rent-seeking, reserve currency, Robert Gordon, Robert Shiller, Robert Solow, rolling blackouts, Ronald Coase, Scramble for Africa, Second Machine Age, sharing economy, Shenzhen special economic zone , Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, six sigma, Skype, smart cities, Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia, South China Sea, South Sea Bubble, sovereign wealth fund, special economic zone, spice trade, Stuxnet, supply-chain management, sustainable-tourism, systems thinking, TaskRabbit, tech worker, TED Talk, telepresence, the built environment, The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, Tim Cook: Apple, trade route, Tragedy of the Commons, transaction costs, Tyler Cowen, UNCLOS, uranium enrichment, urban planning, urban sprawl, vertical integration, WikiLeaks, Yochai Benkler, young professional, zero day

With as much as 70 percent of China’s budget consumed by local government expenses, many scholars argue that China is already de facto federalized and should become more formally so.3 Indeed, the central government no longer sets or rewards growth rate targets for provinces, indicating they are expected to determine economic strategies for themselves.4 Inland provinces are thus leveraging China’s improved infrastructure to draw companies from the high-wage coastal cities toward the lower-wage interior. Meanwhile, a “race to the bottom” competition for manufacturing jobs is playing out in America today reminiscent of Asia in the 1980s. Tennessee is reimbursing much of the up-front cost South Korea’s tire maker Hankook will incur to set up its first U.S. plant in Clarksville, where it will become the largest employer in the city.

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As the longtime Chicago Tribune columnist and urban expert Richard Longworth has written, “Midwestern states make no sense as units of government.”7 Kansas City is shared by Kansas and Missouri, but the two states battle to get companies to relocate across State Line Road rather than uniting against global competition. Indiana’s municipalities are also engaged in a Tennessee-style race to the bottom to attract low-wage jobs, undermining Indianapolis’s effort to become a high-wage tech hub. Some second-tier cities have managed to stay afloat by effectively privatizing themselves. The Port of Corpus Christi, for example, was the first American territory to be granted a foreign trade zone license by the Department of Commerce in 1985, making it a self-governing private entity independent of the city with the same name and taking no federal, state, or city tax revenues.*1 After decades of service as a key port for oil imports and almost zero exports, it has become a major gateway for outbound shale oil exports from the Eagle Ford formation only a hundred kilometers away.*2 In 2009, it began a $1 billion joint venture with Tianjin Pipe Corporation, which hails from China’s leading port, to produce 500,000 tons per year of seamless pipe essential for oil and gas wells.

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McDonald’s has more capacity to inspect itself, and more incentive to protect its brand, than any government can devote to monitoring it. Similarly, the West African societies where children work in cocoa fields don’t raise wages or build schools the way Nestlé can.*1 — SUPPLY CHAINS WERE ONCE thought of as spurring a race to the bottom; now it is clear they are how countries race to the top. Even China and India needed to open to foreign investment to attract supply chains, stimulate reforms, and generate the capital necessary to spread development. As the Nobel laureates Robert Solow and Edmund Phelps have pointed out, foreign firms pay higher wages, bring in new technology, and boost worker skills and productivity.

Good Economics for Hard Times: Better Answers to Our Biggest Problems by Abhijit V. Banerjee, Esther Duflo

3D printing, accelerated depreciation, affirmative action, Affordable Care Act / Obamacare, air traffic controllers' union, Airbnb, basic income, behavioural economics, Bernie Sanders, Big Tech, business cycle, call centre, Cambridge Analytica, Capital in the Twenty-First Century by Thomas Piketty, carbon credits, carbon tax, Cass Sunstein, charter city, company town, congestion pricing, correlation does not imply causation, creative destruction, Daniel Kahneman / Amos Tversky, David Ricardo: comparative advantage, decarbonisation, Deng Xiaoping, Donald Trump, Edward Glaeser, en.wikipedia.org, endowment effect, energy transition, Erik Brynjolfsson, experimental economics, experimental subject, facts on the ground, fake news, fear of failure, financial innovation, flying shuttle, gentrification, George Akerlof, Great Leap Forward, green new deal, high net worth, immigration reform, income inequality, Indoor air pollution, industrial cluster, industrial robot, information asymmetry, Intergovernmental Panel on Climate Change (IPCC), Jane Jacobs, Jean Tirole, Jeff Bezos, job automation, Joseph Schumpeter, junk bonds, Kevin Roose, labor-force participation, land reform, Les Trente Glorieuses, loss aversion, low skilled workers, manufacturing employment, Mark Zuckerberg, mass immigration, middle-income trap, Network effects, new economy, New Urbanism, no-fly zone, non-tariff barriers, obamacare, off-the-grid, offshore financial centre, One Laptop per Child (OLPC), open economy, Paul Samuelson, place-making, post-truth, price stability, profit maximization, purchasing power parity, race to the bottom, RAND corporation, randomized controlled trial, restrictive zoning, Richard Thaler, ride hailing / ride sharing, Robert Gordon, Robert Solow, Ronald Reagan, Savings and loan crisis, school choice, Second Machine Age, secular stagnation, self-driving car, shareholder value, short selling, Silicon Valley, smart meter, social graph, spinning jenny, Steve Jobs, systematic bias, Tax Reform Act of 1986, tech worker, technology bubble, The Chicago School, The Future of Employment, The Market for Lemons, The Rise and Fall of American Growth, The Wealth of Nations by Adam Smith, total factor productivity, trade liberalization, transaction costs, trickle-down economics, Twitter Arab Spring, universal basic income, urban sprawl, very high income, War on Poverty, women in the workforce, working-age population, Y2K

High-net-worth individuals finance the campaigns of politicians on the left and on the right, and few are in favor of wealth taxation, even when they are otherwise quite liberal. Second, it is easy to avoid the taxes, legally or not, particularly in small European countries where people can move or park their wealth abroad. This gives rise to a race to the bottom on tax rates. We should not lose sight of the fact, however, that all of this happens in part because the world tolerates tax evasion: most tax codes have loopholes galore and the penalties for parking money abroad are ineffective. As we saw, countries with a simple tax code with few loopholes lose less from evasion when taxes go up than the United States.71 Gabriel Zucman has convincingly argued that there are many relatively straightforward things that would help a lot in limiting tax evasion and tax avoidance.

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There needs to be the political will to implement them. The three steps Zucman recommends may be particularly tricky since they involve international cooperation, and the men (yes, almost always men) at the top right now do not seem to be all that able to join together to get things done. Without that, countries may be tempted to engage in a race to the bottom in taxation in the hope of attracting talent and capital. Preferential tax schemes for high-skilled foreign workers have been introduced in Belgium, Denmark, Finland, the Netherlands, Portugal, Spain, Sweden, and Switzerland. In Denmark, for example, high-earning foreigners pay only a 30 percent flat tax for three years (against a top rate of 62 percent for the Danish).

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The recent round of tax reforms undertaken by the centrist Macron government has made tax less progressive: the flat tax was raised, the wealth tax is gone, and taxes on capital have been pared back. The official justification is that this is necessary to make France able to attract capital away from other countries. It may well be true, but it runs the risk of forcing other countries in Europe to cut taxes as well, prompting a race to the bottom. The American experience warns us this may be very hard to reverse. European countries need to cooperate to hold the line on their taxes. Developing-country governments raise even less money than the United States. The median low-income country raises less than 15 percent of GDP in taxes as compared to nearly 50 percent in Europe (and 34 percent in the OECD on average).

Two Nations, Indivisible: A History of Inequality in America: A History of Inequality in America by Jamie Bronstein

Affordable Care Act / Obamacare, back-to-the-land, barriers to entry, basic income, Bernie Sanders, big-box store, Black Lives Matter, blue-collar work, Branko Milanovic, British Empire, Capital in the Twenty-First Century by Thomas Piketty, clean water, cognitive dissonance, collateralized debt obligation, collective bargaining, Community Supported Agriculture, corporate personhood, crony capitalism, deindustrialization, desegregation, Donald Trump, ending welfare as we know it, Frederick Winslow Taylor, full employment, Gini coefficient, Glass-Steagall Act, income inequality, interchangeable parts, invisible hand, job automation, John Maynard Keynes: technological unemployment, labor-force participation, land reform, land tenure, longitudinal study, low skilled workers, low-wage service sector, mandatory minimum, mass incarceration, minimum wage unemployment, moral hazard, moral panic, mortgage debt, New Urbanism, non-tariff barriers, obamacare, occupational segregation, Occupy movement, oil shock, plutocrats, price discrimination, race to the bottom, rent control, road to serfdom, Ronald Reagan, Sam Peltzman, scientific management, Scientific racism, Simon Kuznets, single-payer health, Strategic Defense Initiative, strikebreaker, the long tail, too big to fail, trade route, transcontinental railway, Triangle Shirtwaist Factory, trickle-down economics, universal basic income, Upton Sinclair, upwardly mobile, urban renewal, vertical integration, W. E. B. Du Bois, wage slave, War on Poverty, women in the workforce, working poor, Works Progress Administration

Without inequality, there could never be progress: “The main spring of progress is the desire of individuals to better their condition …”100 While the northern states were home to cut-throat capitalism and to a natural war between labor and capital, Calhoun described each plantation as a microcosm of harmony between labor and capital, embodied by the person of the plantation owner.101 One of the most prolific anonymous editorial writers on slavery, Virginia lawyer George Fitzhugh, advocated slavery as a form of paternalistic social organization for workers. As had the New York Working Men, Fitzhugh argued that competition promoted a race to the bottom in living standards. He claimed that workers and their employers in the North were only linked by the impersonal cash nexus, and that a manual worker had almost no power compared with the man who would or would not hire him. But Fitzhugh went beyond the arguments of northern workers by arguing that dependent relationships were better because they caused an affectionate tie: between husbands and wives, parents and children, and masters and slaves.102 He argued that in the best-case scenario, all workers would be enslaved.103 In the north, newspaper editors went wild, printing and reprinting Fitzhugh’s anonymous editorials while alleging a southern conspiracy to deprive white workers of their liberties.104 Historian Peter Kolchin argues that slaveholders in the United States (in contrast with the Russian serf-holders he compares them to) were able to defend slavery freely because of the free press in the United States.

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Fears about the slowing of the economy in general are met with calls for the education of the workforce, as though that, rather than increasing consumer demand, will guarantee that every individual somehow has a high-paying job. In fact, automation has caused the hollowing out of the wage structure; the highest-paid people continue to be highly paid, while middle- and low-skilled workers conduct a race to the bottom for lower-skilled jobs. Without some degree of redistribution and the provision of more public goods “such as food, housing, education and health care that are necessary for a modern life to go well,” there is no guarantee that economic output will have any relationship to well-being.72 The path of the Patient Protection and Affordable Care Act (ACA, 2010) provides a good illustration of the problems caused by divergent partisan ideologies and powerful framing narratives.

Alchemy: The Dark Art and Curious Science of Creating Magic in Brands, Business, and Life by Rory Sutherland

"World Economic Forum" Davos, 3D printing, Alfred Russel Wallace, barriers to entry, basic income, behavioural economics, Black Swan, Brexit referendum, butterfly effect, California gold rush, call centre, Captain Sullenberger Hudson, Cass Sunstein, cognitive dissonance, confounding variable, Daniel Kahneman / Amos Tversky, Dava Sobel, delayed gratification, Donald Trump, double helix, Downton Abbey, driverless car, Easter island, Edward Jenner, Elon Musk, Firefox, Ford Model T, General Magic , George Akerlof, gig economy, Google Chrome, Google X / Alphabet X, Grace Hopper, Hyperloop, Ignaz Semmelweis: hand washing, IKEA effect, information asymmetry, it is difficult to get a man to understand something, when his salary depends on his not understanding it, James Dyson, John Harrison: Longitude, loss aversion, low cost airline, Mason jar, Murray Gell-Mann, nudge theory, Peter Thiel, placebo effect, race to the bottom, Richard Feynman, Richard Thaler, Rory Sutherland, shareholder value, Silicon Valley, social intelligence, Steve Jobs, supply-chain management, systems thinking, TED Talk, the map is not the territory, The Market for Lemons, The Wealth of Nations by Adam Smith, ultimatum game, universal basic income, Upton Sinclair, US Airways Flight 1549, Veblen good, work culture

Even Darwin’s great contemporary and collaborator Wallace hated the idea of sexual selection; for some reason, it sits in the category of ideas that most people – and especially intellectuals – simply do not want to believe. 3.11: On the Importance of Identity Remember that without distinctiveness, mutualism of the kind found in bees and flowers cannot work, because an improvement in a flower’s product quality would not result in a corresponding increase in the bees’ loyalty. Without identity and the resulting differentiation, a breed of flower would give away extra nectar for no gain, as the next time, the bees would simply visit the less-generous-but-identical-looking flower next to it. Over time, flowers would end up in a ‘race to the bottom’, producing as little costly nectar as possible and relying on their similar appearance to other, more generous flowers to preserve the bees’ supply of nectar and to maintain the incentive for them to continue travelling from plant to plant. We need to consider whether the same process occurs in business, as well as in nature.

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The problem was confined to a few makes, but without knowing which specific brands to avoid, it sullied the whole category. Without the brand feedback mechanism, there was no incentive for any one manufacturer to make a safer, better version of the board, since they were not positioned to reap the gains. As a result, the market became a commoditised race to the bottom, in which both innovation and quality control fail. Why make a better product if no one knows it was you who made it? So no one did make a better board, and the whole category more or less died as a result. It may correct itself if better boards arise, or if a shrewd company such as Samsung cannily attaches its name to the best.

The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalism by Arun Sundararajan

"World Economic Forum" Davos, additive manufacturing, Airbnb, AltaVista, Amazon Mechanical Turk, asset light, autonomous vehicles, barriers to entry, basic income, benefit corporation, bike sharing, bitcoin, blockchain, book value, Burning Man, call centre, Carl Icahn, collaborative consumption, collaborative economy, collective bargaining, commoditize, commons-based peer production, corporate social responsibility, cryptocurrency, data science, David Graeber, distributed ledger, driverless car, Eben Moglen, employer provided health coverage, Erik Brynjolfsson, Ethereum, ethereum blockchain, Frank Levy and Richard Murnane: The New Division of Labor, future of work, general purpose technology, George Akerlof, gig economy, housing crisis, Howard Rheingold, independent contractor, information asymmetry, Internet of things, inventory management, invisible hand, job automation, job-hopping, John Zimmer (Lyft cofounder), Kickstarter, knowledge worker, Kula ring, Lyft, Marc Andreessen, Mary Meeker, megacity, minimum wage unemployment, moral hazard, moral panic, Network effects, new economy, Oculus Rift, off-the-grid, pattern recognition, peer-to-peer, peer-to-peer lending, peer-to-peer model, peer-to-peer rental, profit motive, public intellectual, purchasing power parity, race to the bottom, recommendation engine, regulatory arbitrage, rent control, Richard Florida, ride hailing / ride sharing, Robert Gordon, Ronald Coase, Ross Ulbricht, Second Machine Age, self-driving car, sharing economy, Silicon Valley, smart contracts, Snapchat, social software, supply-chain management, TaskRabbit, TED Talk, the long tail, The Nature of the Firm, total factor productivity, transaction costs, transportation-network company, two-sided market, Uber and Lyft, Uber for X, uber lyft, universal basic income, Vitalik Buterin, WeWork, Yochai Benkler, Zipcar

Additionally, at an October 2015 labor conference hosted by the White House, President Barack Obama discussed ways of protecting the new workforce in an hour-long town hall discussion he moderated with Michelle Miller, the co-founder of coworker.org, after highlighting the opportunities created by the future of work heralded by platforms like Uber, Lyft, and TaskRabbit in an earlier keynote speech. But what exactly do these opportunities look like? On one side of the argument, there are the Liss-Riordans of the world who may consider the future of work—at least as it is currently unfolding in the sharing economy—as a near-certain race to the bottom. Among the most vocal proponents of this view is the former labor secretary and University of California professor Robert Reich. Asserting that a better name for the sharing economy would be the “share-the-scraps economy,” Reich posits: “Customers and workers are matched online. Workers are rated on quality and reliability.

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Will the sharing economy ultimately represent the rise of the microentrepreneur—a generation of self-employed workers who are empowered to work whenever they want from any location and at whatever level of intensity needed to achieve their desired standard of living? Or will it represent the culmination of the end of broad-based and high standards of living that the United States witnessed in the 1950s and 1960s—a disparaging race to the bottom that leaves workers around the world working more hours for less money and with minimal job security and benefits? Put another way, will the future of work be populated by successful microentrepreneurs, like David with his fleet of cars on Turo, ThreeBirdNest’s Alicia Shaffer on Etsy, and Don Dennis running his business from the island of Gigha?

Superintelligence: Paths, Dangers, Strategies by Nick Bostrom

agricultural Revolution, AI winter, Albert Einstein, algorithmic trading, anthropic principle, Anthropocene, anti-communist, artificial general intelligence, autism spectrum disorder, autonomous vehicles, backpropagation, barriers to entry, Bayesian statistics, bioinformatics, brain emulation, cloud computing, combinatorial explosion, computer vision, Computing Machinery and Intelligence, cosmological constant, dark matter, DARPA: Urban Challenge, data acquisition, delayed gratification, Demis Hassabis, demographic transition, different worldview, Donald Knuth, Douglas Hofstadter, driverless car, Drosophila, Elon Musk, en.wikipedia.org, endogenous growth, epigenetics, fear of failure, Flash crash, Flynn Effect, friendly AI, general purpose technology, Geoffrey Hinton, Gödel, Escher, Bach, hallucination problem, Hans Moravec, income inequality, industrial robot, informal economy, information retrieval, interchangeable parts, iterative process, job automation, John Markoff, John von Neumann, knowledge worker, Large Hadron Collider, longitudinal study, machine translation, megaproject, Menlo Park, meta-analysis, mutually assured destruction, Nash equilibrium, Netflix Prize, new economy, Nick Bostrom, Norbert Wiener, NP-complete, nuclear winter, operational security, optical character recognition, paperclip maximiser, pattern recognition, performance metric, phenotype, prediction markets, price stability, principal–agent problem, race to the bottom, random walk, Ray Kurzweil, recommendation engine, reversible computing, search costs, social graph, speech recognition, Stanislav Petrov, statistical model, stem cell, Stephen Hawking, Strategic Defense Initiative, strong AI, superintelligent machines, supervolcano, synthetic biology, technological singularity, technoutopianism, The Coming Technological Singularity, The Nature of the Firm, Thomas Kuhn: the structure of scientific revolutions, time dilation, Tragedy of the Commons, transaction costs, trolley problem, Turing machine, Vernor Vinge, WarGames: Global Thermonuclear War, Watson beat the top human players on Jeopardy!, World Values Survey, zero-sum game

If the antagonists are powerful states, the clash could be bloody.34 (A “surgical strike” against the rival’s AI project might risk triggering a larger confrontation and might in any case not be feasible if the host country has taken precautions.35) * * * Box 13 A risk-race to the bottom Consider a hypothetical AI arms race in which several teams compete to develop superintelligence.32 Each team decides how much to invest in safety—knowing that resources spent on developing safety precautions are resources not spent on developing the AI. Absent a deal between all the competitors (which might be stymied by bargaining or enforcement difficulties), there might then be a risk-race to the bottom, driving each team to take only a minimum of precautions. One can model each team’s performance as a function of its capability (measuring its raw ability and luck) and a penalty term corresponding to the cost of its safety precautions.

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Technology races: some historical examples 6. The mail-ordered DNA scenario 7. How big is the cosmic endowment? 8. Anthropic capture 9. Strange solutions from blind search 10. Formalizing value learning 11. An AI that wants to be friendly 12. Two recent (half-baked) ideas 13. A risk-race to the bottom CHAPTER 1 Past developments and present capabilities We begin by looking back. History, at the largest scale, seems to exhibit a sequence of distinct growth modes, each much more rapid than its predecessor. This pattern has been taken to suggest that another (even faster) growth mode might be possible.

All the Devils Are Here by Bethany McLean

Alan Greenspan, Asian financial crisis, asset-backed security, bank run, Bear Stearns, behavioural economics, Black-Scholes formula, Blythe Masters, break the buck, buy and hold, call centre, Carl Icahn, collateralized debt obligation, corporate governance, corporate raider, Credit Default Swap, credit default swaps / collateralized debt obligations, currency risk, diversification, Dr. Strangelove, Exxon Valdez, fear of failure, financial innovation, fixed income, Glass-Steagall Act, high net worth, Home mortgage interest deduction, interest rate swap, junk bonds, Ken Thompson, laissez-faire capitalism, Long Term Capital Management, low interest rates, margin call, market bubble, market fundamentalism, Maui Hawaii, Michael Milken, money market fund, moral hazard, mortgage debt, Northern Rock, Own Your Own Home, Ponzi scheme, proprietary trading, quantitative trading / quantitative finance, race to the bottom, risk/return, Ronald Reagan, Rosa Parks, Savings and loan crisis, shareholder value, short selling, South Sea Bubble, statistical model, stock buybacks, tail risk, Tax Reform Act of 1986, telemarketer, the long tail, too big to fail, value at risk, zero-sum game

Ratings shopping was a classic example of why Alan Greenspan’s theory of market discipline didn’t work in the real world. The market competition between the rating agencies, which Greenspan assumed would make companies better, actually made them worse. “The only way to get market share was to be easier,” says Jerome Fons, a longtime Moody’s managing director. “It was a race to the bottom.” A former structured finance executive at Moody’s says, “No rating agency could say, ‘We’re going to change and be more conservative.’ You wouldn’t be in business for long if you did that. We all understood that.” “It turns out ratings quality has surprisingly few friends,” Moody’s chief executive, Raymond McDaniel, told his board in 2007.

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Says Kevin Stein, the associate director of the California Reinvestment Coalition: “Banks said, ‘We don’t have to comply.’ The OCC said, ‘They don’t have to comply.’ The state legislatures said, ‘If we can’t pass a law that regulates federally chartered banks operating in our state, then we’re not going to regulate state-chartered lenders, because then they can’t compete.’ It was a legislative and regulatory race to the bottom.” Finally, subprime loans continued to make their way, unchecked, into the national banking system, thanks to securitization. It really didn’t matter who originated them. States had no way of cutting off that all-important funding source. And the national regulators, with their energy focused on making sure that “their” institutions were free from pesky state laws, idly stood by.

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In a 2005 memo about Washington Mutual, the FDIC summed up the prevailing sentiment: “Management believes, however, that the impact on WMB [of a housing downturn] would be manageable, since the riskiest segments of production are sold to investors, and that these investors will bear the brunt of a bursting housing bubble.” And what did Wall Street think about the way the subprime business had gone mad? Wall Street didn’t care, either. If anything, Wall Street was encouraging the subprime companies in their race to the bottom. Lousier loans meant higher yields. “A company would come to us and say, ‘We can’t believe your FICO doesn’t go to 580,’ ” recalls a former Morgan Stanley executive. “ ‘You’re 620, but Lehman will go to 580.’ ” Here was the ultimate consequence of the delinking of borrower and lender, which securitization had made possible: no one in the chain, from broker to subprime originator to Wall Street, cared that the loans they were making and selling were likely to go bad.

The Road to Somewhere: The Populist Revolt and the Future of Politics by David Goodhart

Affordable Care Act / Obamacare, agricultural Revolution, assortative mating, Big bang: deregulation of the City of London, borderless world, Boris Johnson, Branko Milanovic, Bretton Woods, Brexit referendum, British Empire, call centre, capital controls, carbon footprint, central bank independence, centre right, coherent worldview, corporate governance, credit crunch, Crossrail, deglobalization, deindustrialization, Donald Trump, Downton Abbey, Edward Glaeser, en.wikipedia.org, Etonian, European colonialism, eurozone crisis, falling living standards, first-past-the-post, gender pay gap, gig economy, glass ceiling, global supply chain, global village, Great Leap Forward, illegal immigration, income inequality, informal economy, Jeremy Corbyn, job satisfaction, knowledge economy, labour market flexibility, low skilled workers, market friction, mass immigration, meritocracy, mittelstand, Neil Kinnock, New Urbanism, non-tariff barriers, North Sea oil, obamacare, old-boy network, open borders, open immigration, Peter Singer: altruism, post-industrial society, post-materialism, postnationalism / post nation state, race to the bottom, Richard Florida, Ronald Reagan, selection bias, shareholder value, Skype, Sloane Ranger, stem cell, the long tail, Thomas L Friedman, transaction costs, trickle-down economics, ultimatum game, upwardly mobile, wages for housework, white flight, women in the workforce, working poor, working-age population, World Values Survey

A new settlement is needed between the nation state and the international economic order that allows for a greater variety of institutional forms reflecting different national preferences and traditions. Some people, especially on the left, fear that without rigorous harmonisation of institutional regimes there will be a race to the bottom on labour, environmental or financial regulation (the same argument is made within the EU). This fear is not groundless but is exaggerated, and the only area where there seems to be some evidence for it is in corporate taxation. Most institutional money is risk averse and sees low regulation countries as risky.

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He writes: ‘Advocates of globalisation lecture the rest of the world about how countries must change their policies and institutions to expand their international trade and to become more attractive to foreign investors. This way of thinking confuses means for ends. Globalisation should be an instrument for achieving the goals that societies seek: prosperity, stability, freedom, and quality of life. Whether globalisation sets off a “race to the bottom” or not, we can break the deadlock between the proponents and opponents of globalisation by accepting a simple principle: countries can uphold national standards in labor markets, finance, taxation, and other areas and can do so by raising barriers at the border, if necessary, when international trade and finance demonstrably threaten domestic practices that enjoy democratic support.’15 Rodrik argues that this principle rules out extremism on both sides.

Currency Wars: The Making of the Next Gobal Crisis by James Rickards

"World Economic Forum" Davos, Alan Greenspan, Asian financial crisis, bank run, Bear Stearns, behavioural economics, Benoit Mandelbrot, Berlin Wall, Big bang: deregulation of the City of London, Black Swan, borderless world, Bretton Woods, BRICs, British Empire, business climate, buy and hold, capital controls, Carmen Reinhart, Cass Sunstein, collateralized debt obligation, complexity theory, corporate governance, Credit Default Swap, credit default swaps / collateralized debt obligations, cross-border payments, currency manipulation / currency intervention, currency peg, currency risk, Daniel Kahneman / Amos Tversky, deal flow, Deng Xiaoping, diversification, diversified portfolio, Dr. Strangelove, Fall of the Berlin Wall, family office, financial innovation, floating exchange rates, full employment, game design, German hyperinflation, Gini coefficient, global rebalancing, global reserve currency, Great Leap Forward, guns versus butter model, high net worth, income inequality, interest rate derivative, it's over 9,000, John Meriwether, Kenneth Rogoff, laissez-faire capitalism, liquidity trap, Long Term Capital Management, low interest rates, mandelbrot fractal, margin call, market bubble, Mexican peso crisis / tequila crisis, Money creation, money market fund, money: store of value / unit of account / medium of exchange, Myron Scholes, Network effects, New Journalism, Nixon shock, Nixon triggered the end of the Bretton Woods system, offshore financial centre, oil shock, one-China policy, open economy, paradox of thrift, Paul Samuelson, power law, price mechanism, price stability, private sector deleveraging, proprietary trading, quantitative easing, race to the bottom, RAND corporation, rent-seeking, reserve currency, Ronald Reagan, short squeeze, sovereign wealth fund, special drawing rights, special economic zone, subprime mortgage crisis, The Myth of the Rational Market, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, time value of money, too big to fail, value at risk, vertical integration, War on Poverty, Washington Consensus, zero-sum game

In 1936, France broke with gold and became the last major country to emerge from the worst effects of the Great Depression while England devalued again to regain some of the advantage it had lost against the dollar after FDR’s devaluations in 1933. In round after round of devaluation and default, the major economies of the world raced to the bottom, causing massive trade disruption, lost output and wealth destruction along the way. The volatile and self-defeating nature of the international monetary system during that period makes Currency War I the ultimate cautionary tale for today as the world again confronts the challenge of massive unpayable debt.

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Regional currency blocs could quickly devolve into regional trading blocs with diminished world trade, undoubtedly the opposite of what the advocates of multiple reserve currencies such as Eichengreen envision. Eichengreen expects what he calls healthy competition among multiple reserve currencies. He discounts models of unhealthy competition and dysfunction—what economists call a “race to the bottom,” which can arise when leading central banks lock in regional dominance through network effects and simultaneously abuse their reserve status by money printing. The best advice for advocates of the multiple reserve currency model is “Be careful what you wish for.” This is an untested and untried model, absent gold or some single currency anchor.

The Myth of Capitalism: Monopolies and the Death of Competition by Jonathan Tepper

"Friedman doctrine" OR "shareholder theory", Affordable Care Act / Obamacare, air freight, Airbnb, airline deregulation, Alan Greenspan, bank run, barriers to entry, Berlin Wall, Bernie Sanders, Big Tech, big-box store, Bob Noyce, Boston Dynamics, business cycle, Capital in the Twenty-First Century by Thomas Piketty, citizen journalism, Clayton Christensen, collapse of Lehman Brothers, collective bargaining, compensation consultant, computer age, Cornelius Vanderbilt, corporate raider, creative destruction, Credit Default Swap, crony capitalism, diversification, don't be evil, Donald Trump, Double Irish / Dutch Sandwich, Dunbar number, Edward Snowden, Elon Musk, en.wikipedia.org, eurozone crisis, Fairchild Semiconductor, Fall of the Berlin Wall, family office, financial innovation, full employment, gentrification, German hyperinflation, gig economy, Gini coefficient, Goldman Sachs: Vampire Squid, Google bus, Google Chrome, Gordon Gekko, Herbert Marcuse, income inequality, independent contractor, index fund, Innovator's Dilemma, intangible asset, invisible hand, Jeff Bezos, Jeremy Corbyn, Jevons paradox, John Nash: game theory, John von Neumann, Joseph Schumpeter, junk bonds, Kenneth Rogoff, late capitalism, London Interbank Offered Rate, low skilled workers, Mark Zuckerberg, Martin Wolf, Maslow's hierarchy, means of production, merger arbitrage, Metcalfe's law, multi-sided market, mutually assured destruction, Nash equilibrium, Network effects, new economy, Northern Rock, offshore financial centre, opioid epidemic / opioid crisis, passive investing, patent troll, Peter Thiel, plutocrats, prediction markets, prisoner's dilemma, proprietary trading, race to the bottom, rent-seeking, road to serfdom, Robert Bork, Ronald Reagan, Sam Peltzman, secular stagnation, shareholder value, Sheryl Sandberg, Silicon Valley, Silicon Valley billionaire, Skype, Snapchat, Social Responsibility of Business Is to Increase Its Profits, SoftBank, Steve Jobs, stock buybacks, tech billionaire, The Chicago School, The Wealth of Nations by Adam Smith, Thomas Kuhn: the structure of scientific revolutions, too big to fail, undersea cable, Vanguard fund, vertical integration, very high income, wikimedia commons, William Shockley: the traitorous eight, you are the product, zero-sum game