Losses and Dumping

Since when has the cost of production been· the de termining factor of the selling price? This idea is based on the labor theory of value, rather than on the market theory. Using this same argument, local tariffs should be levied against all domestic businesses which, for any reason, offer their products for sale at a price below the cost of production. Of course, the advocates of this argument demand that the government be given the power to determine the "true" cost of production. And don't laugh this off as a joke because it has been seriously proposed more than once. The proposal may be in the form of a subsidy rather than a tariff, but the reasoning is the same. Losses and Dumping Every year, many farmers produce something at a loss. Their cost of production is above their selling price; they are dumping their products on the market. The same is 57 true of many grocery stores, hardware stores-in fact, can you think of a single type of business in which a few companies are not operating at a loss each year? By these standards, they are dumping their products and are in dulging in "unfair" competition with businesses which are able to operate profitably.