Globalization also pits the nations of the world into competition to provide the most favorable business climate. This means not only low wages, but also low taxes and the elimination of job protection laws. Nations competing for the lowest tax rate must reduce social services. Job protection laws must fall because business is concerned not only with keeping down the costs of labor, but also with minimizing the cost of firing workers. The globalization of finance will intensify the pressure on companies to squeeze the workers for every penny of profit.
Capitalists always look for the greatest possible return on their investment.
If one company's profits fall, its stock holders punish it by moving their investments to companies that pay a higher return. Since the companies that extract the most surplus value from their workforce make the greatest profits, investors reward the most exploitative companies. The internationalization of capital flow increases the investment options, making it more difficult for workers to make any economic progress. Foreign trade has always played a major role in capitalism, and has often been the source of conflict. Worldwide economic integration increases the possibility that local economic crises may escalate trade disputes to a military resolution.