Sure, but why would all states refuse tax breaks? It's a pretty obvious means to convince a company to choose that state. This is "nothing more" than the free market at work.
So, yes, here they are at work doing one of the examples of free-market behavior that work against the public interest.
Here's another variant of my comment above: If all the workers refused to work in abusive conditions for low pay, the companies would still need to hire workers. And you could reply "Why would workers refuse that? Accepting abuse and low pay is a pretty obvious means to convince a company to hire you over others — the free market at work."
Are you one of those people who blindly thinks that the algorithm of "free market" necessarily (tautologically) results in the best situation for everyone?
The entire concept of a corporation exists within a government framework, not a completely free market. They are a complex organization of people making decisions as a unit. So too can states do the same or even work together and decide collectively not to make decisions that worsen the state-vs-corporation power structure…
> Exactly! And by their very nature, free-markets are susceptible to races-to-the-bottom.
I was actually thinking that this was an example of a Nash Equilibrium. It's basically like the prisoner's dilemma. If all the states cooperated and refused to offer tax breaks, that would be good for all states. But if a single state "defects" and offers tax breaks, that state reaps the rewards of its defection. Unfortunately this leads to all states "defecting" and offering tax breaks, which leaves the states in a worse position than if none of them offered tax breaks.
> So, yes, here they are at work doing one of the examples of free-market behavior that work against the public interest.
Yep, that's true, but there's not really any way around it in this case.
> Here's another variant of my comment above: If all the workers refused to work in abusive conditions for low pay, the companies would still need to hire workers. And you could reply "Why would workers refuse that? Accepting abuse and low pay is a pretty obvious means to convince a company to hire you over others — the free market at work."
And that's why unions exist. But that won't work when we're talking about states.
> Are you one of those people who blindly thinks that the algorithm of "free market" necessarily (tautologically) results in the best situation for everyone?
Haha no (but thanks for asking instead of silently assuming!). But the "free market" is what we have (even if it's not always, or even often, really "free"), and it results in consequences like states offering tax breaks, and there's no real way around it beyond tearing up our government and starting over because I seriously doubt you could ever convince all 50 states to outlaw tax breaks for companies.
Hah! I wish I didn't even have to guess (i.e. I wish nobody were so blindly dogmatic). Your answers make it clear you are certainly not one of those blind free-market dogma folks.
I think your Nash Equilibrium point is spot on, but it's fair to describe a breakdown in that as turning into a race-to-the-bottom.
> why unions exist. But that won't work when we're talking about states.
Oh, but that could. There's no inherent reason why states can't coordinate. They could do so in a weak fashion (i.e. recognize the need to maintain the equilibrium and just all do the right thing) or a strong fashion (lobby the federal government to step in and bar this sort of behavior).
As to your last paragraph, you could definitely convince me of that. I have seen evidence, however, that some places realize that they can refuse to play this losing game. A state can reject the growth-ponzi-scheme ( see https://www.strongtowns.org/the-growth-ponzi-scheme/ ) for example and just let the other states play the race-to-the-bottom while they encourage positive economic activity through other means.
That's like a store refusing to slash their prices to compete and instead finding some other way to convince customers to stay loyal and not just focus on price (perhaps service is better, experience is better overall, etc). In the case of states, they can get great education, quality of life, protect the environment, and realize that they will prosper long-term and refuse to join the race-to-the-bottom. Enough states refusing to play race-to-the-bottom can bring back an equilibrium eventually.
