Capturing some of Giddens’ concerns, Fig. 3 shows that through TC growth globalization
drives outsourcing as both transnational and local firms seek to reduce their production cost
through ‘labor arbitrage’. This creates temporal or short-term unemployment in nation states
with firms that outsource jobs. While stirring away from “the ad hoc mixture of neo-liberal and
conventional social-democratic recipes” (Mouzelis 2001, p. 436), Giddens (2000) still calls for
unemployment aid. But, as the SD modeling example results show below, this could lead to
long-term negative unintended consequences, such as, for example, “potentially starting a ‘race
to the bottom’ for discretionary welfare” (Zagonel et al. 2004, p. 891).
In particular, quality of life, quantified below as an employment ratio, increases
temporarily with welfare, but degrades in the long term, following a typical overshoot-andcollapse
dynamics through time. The small SD modeling example below shows that the dynamic complexity of globalization warrants simulation modeling in order to understand its behavior and
to design policies that might avoid negative unintended consequences. Indeed, a substantial
amount of modeling might be needed to gain a comprehensive understanding of globalization’s
dynamic consequences or implications.