What are the four "dumping" fears raised as ethical criticism of globalisation?
Moral, democracy, social and competition dumping — four versions of the same worry, that open markets let firms escape the standards a society has decided on.
* Four versions of one worry: that capital can leave a jurisdiction faster than standards can bind it *
| Fear | The worry |
|---|---|
| Moral dumping (Moraldumping) | Firms relocate to countries with lower standards, so the standards can't be enforced anywhere |
| Democracy dumping (Demokratiedumping) | Firms move to places where the economy dominates democratic politics rather than the reverse |
| Social dumping (Sozialdumping) | Globalised competition makes a generous welfare state impossible to sustain in the long run |
| Competition dumping (Wettbewerbsdumping) | Mega-mergers concentrate market power until competition no longer disciplines anyone |
The features of globalisation that drive all four are the same: liberalisation and a sharp increase in international trade, expansion of foreign direct investment, and massive cross-border financial flows. Each of them increases the ease with which capital can leave a jurisdiction — and the credibility of the threat to leave is what weakens the jurisdiction's standards.
There is a genuine counterweight, though. The number of stakeholders a company answers to has grown, and so have their expectations. Customers, investors, NGOs, employees and the press now impose real pressure to act, and that pressure does not respect borders either. Moral dumping is a strategy that works only as long as nobody is watching — which is precisely what supply-chain due-diligence laws such as Germany's Lieferkettensorgfaltspflichtengesetz (LkSG) are designed to change.
Go deeper:
Wikipedia: Race to the bottom — the mechanism behind all four fears, with the evidence for and against it actually happening.- Wikipedia: Lieferkettensorgfaltspflichtengesetz — the German supply-chain due-diligence act named in this debate — scope, duties and sanctions (German).