Subject: Re: Free Software == Dumping??
From: nelson@crynwr.com (Russell Nelson)
Date: Tue, 27 Jun 95 16:17 EDT

   Date: Tue, 27 Jun 1995 09:16:39 -0700
   From: Michael Tiemann <tiemann@cygnus.com>

   "dumping", in the strict sense, is very damaging to society.  Support
   there are 10 companies in competition, and one is ten times the size of
   all the others combined.  If one of the small companies can create a mfg
   process that gives them a 10% price advantage, they can build market
   share (limited by their ability to produce, market, deliver, etc).

   If the big company "dumps" at 10% below the lowest cost any of the small
   companies can afford, then in the short term the consumer wins, but in
   the long term, the big company now has a monopolistic position, and
   that's never good for consumers.

Mmmm, I didn't think I was being so controversial.  I'm not a big fan
of politics on this list, but this is a business-related issue, and
one that might conceivably affect us.

But consider: the big company is losing money at ten times the rate of
a smaller company.  And if the dumping succeeds, the prices will be
higher, so there's great incentive for the smaller companies to stay
in business.  So the smaller companies might very reasonably borrow
money, and reduce their prices to match.

And don't forget that, with the lower prices, the big company is going
to attract more business.  What they lose on each item, they'll make
up in quantity.  :)

And in the meantime, wealth has been transferred from the big company
to society in general.  I just don't see why society prohibits
dumping.  I can see why companies that are the targets of dumping
wouldn't like it, but we don't (or rather, shouldn't) run society for
the benefit of one or two companies.

-- 
-russ <nelson@crynwr.com>    http://www.crynwr.com/~nelson
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