In this paper we analyze the effects if two countries, with different settings on the labor market, open their capital markets. To do this we follow the ideas of New Institutional Economics in combination with a new model of economic growth. We will use a Leontief production function, where we derive the distribution of income by using an approach stemming from conflict theory, to highlight some new insights into the question whether an open world capital market enhances the overall welfare. First of all, using conflict theory, we will pay some attention to the micro-economic foundation of a Harrod-Domar model. At least we want to analyze what will happen if for e.g.: China opens the capital market to the EU zone, where the institutions in both regions are very different. We will show that this will always lead a race to the bottom from the view of workers in the former developed region.