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More than any other developing nation, China has profited immensely from the investment of the textile and other industries. However, the tons of cheap products that benefit Western and Chinese investors have been made at the expense of China's labor force and the environment. Throughout the developing world American industries unrelentingly outsource the production of clothing, electronics, and virtually every other consumer product to take advantage of their low wage rates and laxed workplace safety regulations, this is known as globalization. Globalization has led to extreme cases of worker exploitation in the form of sweatshops, and has also caused nearly irreversible damage to the world's ecosystems. Yet, most corporations and consumers offer little more than lip service to improve the conditions of the laborers.

Exploitation of laborers and the environment are an inevitable consequence of the free market; this phenomenon is known to economists as externalizing the costs of production and consumption. In capitalist society industry and consumers both seek to maximize their wealth by purchasing the least expensive products available to satisfy their needs. The corporate run industries that produce essential goods like clothes and food seek to make their products less expensive then competitors so they may increase the desirability of their own goods. Therefore, industry cuts the costs of production wherever possible.

In the age of globalization the easiest cost to cut is worker compensation. Industries can easily relocate where labor is inexpensive. Furthermore, these industries are represented by corporate entities, meaning that there is no single person in responsible for making decisions. The CEO and board of directors of the corporation must make their decisions based on the shareholders interests, which is only to increase profits. The corporation is owned by the shareholders, which can number in the hundreds of thousands. The impersonal nature of corporations makes it very easy for them to break laws and harm workers because there is never a single person to blame, just the corporation in aggregate. Essentially, if the lawsuits or government penalties that result from harming workers are of less value than the profit gained from doing so, then the corporation will choose to externalize the costs of their production and do things like not install safety features in a factory or dump their waste into a lake rather than paying for the necessary services.

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