Subject: Re: Free Software == Dumping??
From: Craig Burley <burley@gnu.ai.mit.edu>
Date: Tue, 27 Jun 1995 18:28:19 -0400

Dumping isn't defined just by distributing below cost, at least not
usefully.  Otherwise one could claim that the USA government's
free distribution of pamphlets (such as on energy efficiency)
constitutes dumping.

A necessary component of dumping is the intent not only to force
competitors out of the market but to, by doing so, gain exclusive
access to that market so that the prices can be increasing again.
If there's no potential/ability to increase prices without
competition easily springing up, there's no dumping in the proper
sense.

Since free-software businesses might conceivably do the former, but
cannot possibly gain exclusive access to the market (because anyone
can come in and maintain/develop the software, including the
competitors whose own products have been forced out), dumping does
not apply.

As far as whether dumping should be treated as illegal, that is
hard to say.  As with other ways the government interferes with
the free market, it is helpful to more clearly understand just what
is the nature of the interference.  I.e. in the sense that import
fees are really ways to make it more expensive for consumers to
purchase products they desire; in the sense that the minimum wage
is really a way to deny a person the choice of hiring himself out
at what might well be the prevailing market wage if it happens to be
lower than the minimum allowed; in these senses, anti-dumping laws
prevent consumers from having access to products at especially low
prices for a time.

Personally, I'd rather see government get out of any areas where
people are capable of (and allowed to) exercise their own free
will to obtain the desired end, WHETHER OR NOT they might actually
do so in any given instance.  So, since consumers are _potentially_
smart enough to decide for themselves whether to actually purchase
the dumped products, or having done so, to continue to purchase
the products once the competitors are ruined and the prices are
raised, I'd prefer government to not do the regulating.  After all,
if consumers were sufficiently educated to make these choices (and
cheap communication a la Internet makes this more feasible), and
businesses knew this, dumping basically wouldn't happen -- dumpers
would be shooting themselves in the foot.

But, we're probably a fairly long way away from citizens recognizing
their own need of safeguarding society, the free market, and so on
to that extent, and should take smaller, safer steps in that direction
before removing government protections of greater levels of importance.

BTW, suppose a very vicious form of dumping, e.g. where an organization
offers free food to an increasingly large and dependent group of people,
such that the competition (those trying to sell food to those people)
is forced out (or at least forced to raise prices to afford to continue
doing business in the area).  The end result is that the people cannot
imagine how to survive without doing whatever is necessary to ensure that
the organization in question continues to provide them food, at whatever
expense (and form of that expense -- not necessarily money), because
their incentive to go to great lengths to earn income to afford the
food that is still actually sold in their area has been significantly
reduced.  Should that form of dumping be illegal?  Is it worse than
dumping involving consumer products such as computer chips and cars?
How about if the organization in question also can write laws that
make it harder for competitors to return to the market by selling food,
hiring people, &c at the prevailing market prices, and further can
enforce those laws with a vast military organization?

Note that in discussing dumping, people rarely consider that the
"intent" of the dumpers might be overtly to "help consumers by offering
them less-expensive products".

        tq vm, (burley)