This very good paper raises a number of important questions and sheds considerable light on most of them. What is the relationship between capital mobility and domestic economic outcomes? Are advances in globalization likely to result in wage erosion, growing economic insecurity, declining corporate tax rates, and stingier welfare states (a “race to the bottom”)? Or do advances in openness lead to efficiency and welfare gains (“neo-liberal convergence”)? What, in short, should we expect as globalization proceeds, and what, if anything, can we do about it? Crotty et al. make a persuasive argument that, under current conditions, a race to the bottom is a likely outcome. This claim has been made elsewhere, of course, but few others have defended this claim – and articulated the potential hazards of foreign direct investment (FDI) – as carefully and persuasively as Crotty et al.

I like and appreciate this paper for the reasons that I appreciate so much of the authors' previous work: the paper takes on an important set of issues and presents a rich, provocative argument without dodging the hard questions. And further, Crotty et al. present their argument with terrific clarity. This paper enriches considerably the literature on multinational corporations (MNCs), globalization, and progressive economic policy – a literature that is often too simplistic and, as a consequence, not very enlightening – by presenting a useful framework for understanding and addressing this important but ambiguous set of issues.