Analysis of Race to Bottom from Institution System Point of View

The race to the bottom is to win the price advantage in competition at the cost of depriving the labor class of social security,holding down their wages and damaging the ecological environment,which has been widely condemned.However,while race to the bottom is criticized,the reason why it has existed is often ignored.Based on an analysis of the historical function of race to the bottom,the article points out that,in the existing system,race to the bottom achieves the optimal allocation of resources.Thus the reform of the institutional system is the only way out if race to the bottom is to be eliminated.