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Soviet Dumping

MOTIVES BEHIND DUMPING

~T is important to emphasise the fact that though
| dumping is nothing new in the world of commerce,
Soviet dumping, because of the abnormal motives that
inspire it, and the peculiar conditions that govern it, is an
entirely new phenomenon.
Dumping in the ordinary sense of the word, and according
to Professor Viner, is normally practised under the following
conditions :

(#) Producers who have on hand casual overstocks
which cannot be disposed of in the home market, or in
other standard markets, without drastic price reductions
which will “ spoil the market ” for subsequent output,
often dispose of them in distant and non-standard markets
 at whatever prices they will bring.
(b) Dumping may be engaged in for a time in order to
develop or conserve foreign markets by using low prices to
introduce the product into a new market or to extend the
acquaintance with it.
(¢) Dumping may be engaged in because the increase in
sales resulting therefrom makes possible an enlarged scale
of production, with consequent reduction in the average
unit costs of production for the entire output, including
that portion marketed at home at the maximum prices.
(4d) Dumping may be engaged in because the domestic
price is a monopoly price sheltered by a tariff, and the
maximum price at which export sales can be made, though
lower than the prevailing domestic price, nevertheless
yields a net profit on its own account.
(¢) Dumping may be engaged in, though it involves a
temporary loss, in order to drive a competitor out of a
foreign market, or it may be defensive dumping, where a
producer sells at an unprofitable price in an export market
in order to prevent himself from being driven out of that
market bv a competing producer.

These five objectives cover fully the field of ordinary
Jumping but they cannot be applied to Soviet dumping.
Soviet Russia has no overstocks ; she is not introducing