Race to the Bottom

Foreign policy nerds, as well as odd-news enthusiasts, have all heard the news by now: French actor and wealth accumulator Gerard Depardieu’s appeal for Russian citizenship has been granted. This turn of events is simultaneously a snub on Depardieu’s part toward the top marginal rate tax hike championed by French president Francois Hollande, and a domestic policy victory for Russian president Vladimir Putin, who was able to bypass some of his country’s laws and make a point about attracting culturally significant immigrants.

Predictably, this bizarre development has attracted some commentators who support Depardieu’s expatriation. Leaving aside the fact that Depardieu’s 14% Russian tax will, in part, go toward financing Bashar al-Assad’s Syrian regime while that French tax would have primarily financed nationwide healthcare and workers’ rights, these commentators are still dangerously wrong.

Most of Depardieu’s supporters point to the symbolic gesture he is making as evidence that French policies are non- (or even anti-) competitive. Workers’ rights, the argument goes, weaken the ability of companies to innovate, resize, or adjust to fluctuations in the marketplace. Furthermore, the existence of minimum-wage laws, work week limitations, and other quality-of-life laws will force companies to relocate in areas without these protections, stripping the developed world of needed jobs and economic activity.

These same commentators often support stripping financial resources from social programs, on the grounds that the developed world is already doing too much for the poor, the disabled, and the underprivileged. Social welfare programs, they say, shift investment away from saving and accumulation and toward consumption and demand. This is the heart of the common gripe that, if the poor have microwaves and iPhones, then they “aren’t really poor.”

Both of these arguments are variations on a theme: we should not make government or society-level efforts to improve the average quality of life for all citizens. Healthcare for all costs too much. Support for the poor encourages fraud and laziness. Someone else is benefiting too much from the work I do.

That companies will relocate in order to lower labor costs in undoubtedly true. So is the fact that raising quality of life for everyone will incur some costs. The question, though, is how best to foster “competitiveness”. In many cases, the use of the word “competitive” masks the assertion that, if companies are going elsewhere, then our basic labor costs are too high.

But high labor costs also equal high labor wages. And livable wages at the lowest-level jobs translates into better living conditions throughout the economic zone. So do direct transfers to the unemployed, and a strong safety net for those who do lose their jobs.

Suggesting that we trim our labor costs to better match those of poor countries is to also suggest that we move our quality of life closer to theirs. Claiming that the poor aren’t poor if they aren’t struggling to eat is to say that we, as a society, should tolerate worse conditions among our poorest members. This is not only a race to the bottom, it’s also a breathtaking failure of empathy.

Presumably, those who make such arguments assume that they’ll never be a victim of the world they want to create. Instead of damaging the quality of life of the developed world, a more sensible use of energy and resources is to help spread humane law, responsible division of resources, and higher quality of life to all spaces in the world. No doubt there will be failures. But it’s still better than pointing to destitution as the more authentic version of poverty.


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