There exists a social deficit in two ways. First, globalization invites states to create 'national comparative advantages' with regard to other states, in favor of TNC's and investors. Trying to create a competitive national economic climate, states run the risk of getting involved in a 'race to the bottom'. Welfare arrangements are dismantled; taxes on capital gains, income out of capital and on easily geographically transferable income are lowered; subsidies with which the weak are empowered are lowered. Income gaps within countries thus grow.