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Quotation of the Day…

… is from page 210 of the 18th (2013) edition of Roger LeRoy Miller’s, Daniel Benjamin’s, and 1993 Nobel laureate Douglass North’s book, The Economics of Public Issues (original emphasis):

Opponents of globalization raise a variety of objections in their efforts to restrict international trade. For example, it is sometimes said that foreign companies engage in dumping, that is, selling their goods in America below cost. The first question to ask is: below whose cost? Clearly, if the foreign firm is selling in America, it must be offering the good for sale at a price that is at or below the cost of American firms, or else it could not induce Americans to buy it. But the ability of individuals or firms to get goods at lower cost is one of the benefits of free trade, not one of its negatives.

What about claims that import sales are taking place at prices below the foreign company’s costs? This amounts to arguing that the owners of the foreign company are voluntarily giving some of their wealth to us, namely, the difference between their costs and the lower price they charge us.