Scholars believe that the term “race to the bottom” first appeared in a 1933 Supreme Court ruling in the case of Liggett vs. Lee. Justice Louise Brandeis, writing his opinion on the case, argued that in order to gain a competitive advantage, firms are incentivized to undercut one another while governments are incentivized to deregulate(Investopedia).
Being cheaper in the quest for short term gain is a calling. It is a trap. It is a race to the bottom.
If you are a freelancer, you have experienced this more often than not. In the ‘gig economy’, the ‘yet another‘ is always a commodity. You are short changing yourselves to land business thinking that the next project might fetch you better or higher. That remains a myth. You have just boarded the one way train in the race to the bottom.
The problem with the race to the bottom is that you do feel that you are winning. In reality you are far from that. Because you are facing the brunt of the brutality of less and inferior. Solution- find better clients. And there are better clients I assure you.
Although there are legitimate ways to compete for business and investment dollars, the term race to the bottom is used to characterize unhinged tit-for-tat competition that has crossed ethical lines and could be destructive for the parties involved.
This could be because of cut throat competition. But, it is a vicious cycle, a whirlpool from which you cannot extricate yourself without compromise. When companies engage in the race to the bottom, its impact is felt beyond the immediate participants. Lasting damage can be done to the environment, employees, the community, and the companies’ respective shareholders.
The other side of the coin is consumer expectations for perennially lower prices and the squeeze on profit margins for organisations. The domino effect being sub optimal quality of goods and services and needless to say the market for such goods and services dry up. It is a bottomless pit with no winners.
A better alternative is: You’ll pay more than you hoped but get more than you paid for.
Ready, steady, race…?
ENDS