Location

  • Category:
    Business
  • Document type:
    Article
  • Level:
    Undergraduate
  • Page:
    1
  • Words:
    348

Dumping and its moral implications

Location

Introduction

Dumping refers to exportation of goods at prices lower that the home prices or lower that the goods’ cost of production. According to Etzioni A. (2010), dumping is a type of predatory pricing. Examples include the dumping of fire-retardant children’s pajamas from US to Brazilian, African and Iraq markets after they were banned in the US, dumping of Winstrol to Brazil from the US and dipyrone sold to Mexico after being banned in the US.

The main motives for dumping normally is to wage off any competitions in a given market. This is common in markets susceptible to price wars due to elasticity of demand. When a firm exports at prices below its production cost, other firms cannot equally drop their prices as they will suffer losses. This forces them out of the market. Another reason for dumping is to get rid of low quality goods or goods banned in the producing country. MNCs try to avoid losing everything by selling at lower costs so at to recover part of their production costs.

In my opinion, the nature of the dump product does not matter. Dumping kills local industries and leads to importation of low quality and at times unhealthy products to a country. Dumping should therefore be discouraged irrespective of the products. This is also true on the basis that the importing country is never too clear on the reason why a company is dumping its goods. Dumping of tinned tomatoes should therefore be treated with as much seriousness as dumping of carcinogenic flame resistant child pyjamas.

According to Etzioni A. (2010), dumping of commodities banned in one country due to their quality or danger associated with using them is not morally right. First, an MNC that sets its prices very low is deemed to be unethical. Second, it is immoral to sell goods which have been confirmed to be of low quality or dangerous for consumption. In conclusion, dumping is not morally right and should be stopped.

Bibliography

Etzioni, A., 2010, Moral dimension: Toward a new economics, Simon and Schuster.