Home
/
RELIGION & LIBERTY ONLINE
/
The fallacy of capitalism’s ‘race to the bottom’
The fallacy of capitalism’s ‘race to the bottom’
Feb 1, 2026 10:17 AM

The Biden administration proposes a global minimum tax on corporations to end the “global race to the bottom.” Leaving aside the wisdom of letting France tax U.S.-based corporations, this phrase recalls one of the regnant canards of our time: Capitalism inevitably lowers living standards and grinds people down into poverty.

The myth of the “race to the bottom” is among the multitudes of errors, distortions, and outright lies of the 1619 Project but has escaped notice, because so few recognize it as a fib.

Princeton sociology professor Matthew Desmond’s essay – “American Capitalism Is Brutal. You Can Trace That to the Plantation” – summarizes the standard argument well:

In a capitalist society that goes low, wages are depressed as pete over the price, not the quality, of goods; so-called unskilled workers are typically incentivized through punishments, not promotions; inequality reigns and poverty spreads. In the United States, the richest 1 percent of Americans own 40 percent of the country’s wealth, while a larger share of working-age people (18-65)live in povertythan in any other nation belonging to the Organization for Economic Cooperation and Development (O.E.C.D.).

This is but one of many “errors of historical fact” and “misuse of historical sources” that Desmond should retract in this essay. But for our purposes, the key error is that, in a free-market economy, pete over the price, not the quality, of goods.” A brief reflection will show that the assertion is so erroneous that even Desmond does not believe it.

If Desmond truly believes that consumers only care about finding the lowest price, that raises a series of questions:

When Desmond takes his wife, Tessa, out to eat, does he always take her to the cheapest restaurant – McDonald’s for her birthday, White Castle for their anniversary?When Desmond buys a gift for his mother, does he always purchase the least expensive jewelry – the worst-cut diamond?When Desmond is in the market for a new car, does he always purchase a used Yugo (the vehicle imported from Communist Yugoslavia that Car and Driver called “the worst car in history”)?

The answer to these questions, presumably, is no. Yet Desmond and others discard the reality of their “lived experience” to make the faith-based argument that all other Americans single-mindedly focus costs regardless of quality. It’s unclear where they get this notion: No survey of consumer debt would indicate that the American people are especially obsessed with saving money.

In real life, price is only one consideration for a consumer in any society. The buyer always wants to purchase the largest quantity of the highest-quality good at the lowest price. The seller wants to sell the lowest quantity of the least-expensive good at the highest price. In order to find the biggest market, pete with one another to find the pelling niche. The market allows for both Aldi’s and Whole Foods, Hyundai and Mercedes, Great Value and Gucci. And marketing tests show that Americans are wary of buying anything that is priced too low precisely over concerns about its quality. There is no “race to the bottom,” because consumers are not heedless of their safety.

True, e down over time in the capitalist system. Marian Tupy of HumanProgress.org notes:

In 1968, for example, a 23” Admiral colour TV cost $2,544 or 125 hours of labour in the manufacturing sector. In 2018, a 24” Sceptre HD LED TV cost $99.99 or 4.7 hours of labour in the same sector (all prices are in 2018 US dollars). That’s a reduction of 96 per cent in terms of human effort.

The same could be said of microwaves, air conditioners, and everything from household appliances to luxuries. By contrast, the services that have caused Americans the most material pain over the last four decades are healthcare and education – those subject to the greatest government intervention, precisely the direction Desmond wishes to take all industries.

But what about quality? The 1968 Admiral TV’s cathode ray tube pare with the picture quality produced by 2018 technology, much less warrant a price 25-times as high. I love my 5,000-record collection on vinyl as much as any collector, but it doesn’t sound better, last longer, or take up less room than a file of MP3s.

Free exchange benefits Americans by raising the purchasing power of workers’ wages. Economist Joseph Schumpeter described capitalism as “first and last an engine of mass production which unavoidably also means production for the masses.” Its main “achievement does not typically consist in providing more silk stockings for queens but in bringing them within reach of factory girls in return for steadily decreasing amounts of effort.”

That is, capitalism reduces cost through innovation, improvement, and abundance. New technologies don’t simply replace old ones; they sometimes subsume bine them. Take, for instance, this paring entertainment technology of the 1980s with today’s smartphone:

If anything, the picture understates the wondrous advancement of technological progress: The cell phone not only replaces pay phones and all the items pictured but also televisions, gaming systems, calendars, personal planners, photo albums, clocks and wristwatches, road maps, GPS units, rulers and tape measures, passes, notebooks, board games, pitch pipes, books, newspapers and magazines, filing cabinets, and snail mail. Few homes in the 1980s could afford all of these items, let alone for the price of a smartphone – which 85% of Americans now own (up from 35% in 2011).

These are curious status flags in the “race to the bottom.”

And Desmond misses the fact that individuals invented, improved, or replaced all of these products in the hope of making a profit in the marketplace through free exchange. Furthermore, they made our lives better even while misguided theorists falsely accused them of exploitation and despoilation parable to chattel slavery. As the Book of Proverbs says, “In all toil there is profit, but mere talk tends only to poverty” (14:23).

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
BreakPoint’s ‘The Point’
Chuck Colson introduces a new initiative at BreakPoint, a blog called “The Point,” which will feature contributions from “sixteen people blogging on pretty much everything under the sun: persecution of Christians, literary edy troupes, AIDS, the ments on Islam, TV dramas . . . you name it, they’re blogging about it.” It’s been added to our blogroll. Check it out. ...
A Change of Climate at The Economist
At the request of Andy Crouch, who is among other things editorial director for The Christian Vision Project at Christianity Today, I have taken a look at the editorial from The Economist’s special issue from Sept. 9. To recap, Andy asked me, “what are your thoughts about The Economist’s special report on climate change last week, in which they conclude that the risks of climate change, and the likely manageable cost of mitigation, warrant the world, and especially the US,...
The Inevitable Loophole
On yet another day in a long season of bad news for Catholic schools in major urban areas, Chicago’s historic high school seminary is slated to close. Michael J. Petrilli addresses the broader context of the problem in this analysis on NRO. The first part of the article lays out the by now familiar reasons for the epidemic of Catholic school closures in cities such as Detroit and Boston. More interesting is the second part, in which Petrilli reveals that...
The Green Old Party
A਋it of green conservative politics for your Friday – You’ll see why in a minute. First, read this blog post by the Sierra Club on Linc Chafee (Republican, RI), and then this: Meet Wayne Gilchrest, Republican member of the House of Representatives, First Congressional District of Maryland, former house painter, teacher, Vietnam veteran — and past, present and future canoeist who has yet to find himself up that well-known proverbial creek without a paddle, though he must think at times...
A Case against Chimeras: Part I
This week will feature a five part series, with one installment per day, putting forth my presentation of a biblical-theological case against the creation of certain kinds of chimeras, or human-animal hybrids. Part I follows below. Advances in the sciences sometimes appear to occur overnight. Such appearances can often be deceiving, however. Rare is the technological or scientific advance that does not follow years upon years of research, trial and error, failure and experimentation. The latest ing from the field...
A Case against Chimeras: Part IV
The penultimate installment of the series on the biblical/theological case against chimeras focuses on the impact and significance of redemption. Redemption – Romans 8:18–27 Flowing out of our discussion on creation and fall, it is the recognition that there still are limits on human activity with regard to animals that is most important for us in this discussion. The apostle Paul notes that “the creation was subjected to frustration, not by its own choice, but by the will of the...
A Case against Chimeras: Part III
Part III of our series focuses on the human fall into sin and the disastrous consequences that follow from it. Fall – Genesis 9:1–7 The harmonious picture of the created order is quickly marred, however, by the fall of human beings. The fall has prehensive effects, both on the nature of humans themselves, and on the rest of creation. The corruption of the relationship between humans and the rest of the created order is foreshadowed in the curses in Genesis...
The Catholicity of the Reformation: Musings on Reason, Will, and Natural Law, Part 1
This post will introduce what I intend to be an extended series concerned with recovering and reviving the catholicity of Protestant ethics. Protestant catholicity? Isn’t this an oxymoron? It e as a surprise in light of mon stereotype of Protestant theology, but the older Protestant understanding of reason, the divine will, and natural law actually provided a bulwark against the notion of a capricious God, unbounded by truth and goodness, as Pope Benedict recently pointed out in relation to Islam’s...
A Case against Chimeras: Part II
Part II of our week-long series on the ethics of chimeras begins with an examination of the creation account in the book of Genesis. Creation – Genesis 1:26–30 The creation account in Genesis provides us with essential insights into the nature of the created world, from rocks and trees to birds and bees. It also tells us important things about ourselves and the role of human beings in relationship to the rest of creation. The distinctions between various parts of...
Becker and Posner on DDT
This week, University of Chicago faculty members Richard A. Posner and Gary S. Becker discuss and debate the relationship between DDT and the fight against malaria on their blog. As a self-proclaimed “strong environmentalist” who supports “the ban on using DDT as a herbicide,” Posner writes first about the contemporary decline in genetic diversity due in large part to the rate of species extinction. (Posner has issued a correction: “Unforgivably, I referred to DDT as a ‘herbicide.’ It is, of...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved