Race to the bottom

race to the bottom is a phrase used to describe any competition that produces emergent negative behaviour between the actors involved. Simple examples include:

  • the tendency for consumers to buy bigger and bigger cars, to compete on safety;
  • the tendency for states to reduce taxation for internationally mobile individuals and entities; and
  • arms races between states, with arms treaties being used to check this natural tendency.

The most common usage of the race to the bottom is in a socio-economic context, for example between states, businesses or consumers:

  • states: when competition becomes fierce between nations over a particular area of trade and production, countries are given increased incentive to engage in regulatory competition by dismantling currently existing environmental and social regulatory standards and spending programmes, along with associated taxation regimes;
  • businesses: businesses in a particular relevant market may enter into a race to the bottom in order to produce goods or services at the lowest price possible through finding ever more ways of externalising costs of production onto society or the environment (for example, by progressively seeking cheaper labour costs without regards for worker welfare (potentially in countries where there are few existing regulatory controls));
  • consumers: consumers in a particular relevant market will often expend considerable energy ensuring that they get a good deal in terms of, for example, price and quality. Even where they have the desire also to take into account social and environmental factors, they may have little opportunity to do so. For example, ethical options for mobile phones are difficult to come by and a single purchase decision cannot differentiate between the multiplicity of processes, components and materials comprising a mobile phone’s production.

Race-to-the-bottom phenomena require countering by cooperation. See the cooperatition page for more information or for an overview see ethonomics condensed.