4 ms·

It should be a free market. Assuming there is actual "dumping", then look at it as the Chinese are deliberately making themselves poorer in order for the Germa

It should be a free market. Assuming there is actual "dumping", then look at it as the Chinese are deliberately making themselves poorer in order for the Germans buying the panels to keep more of their own money. The Germans are the ones better off, and the Chinese are worse off! The usual mumbling is then about it being a move to remove other's production capacity, and somehow in the future reap oversized profits. The technology moves fast enough to make that less likely, and reaping oversized profits means new entrants can come in to get regular profits so preventing the oversized profits. Free markets are generally self correcting to match supply and demand. The people distorting them are usually the ones who end up worse off.

toyg 13y ago
There's also an issue of quality control and environmental impact: we know that technology manufactured in the EU will, in most cases, satisfy a number of very stringent tests aimed at guaranteeing the wellbeing of workers and consumers, and at maintaining low pollution levels. Despite recent changes in policy, this cannot be said with certainty for most items produced in China. I don't see why prices shouldn't be artificially corrected to reflect that.
- tjansen 13y ago
  Because if you impose tariffs on such goods, these countries will never be able to improve their standard of living. The lower standards give them a chance to produce for lower prices and thus participate in the global market. If you look at Asia, even though things are not perfect today, their standard of living is continously improving. Sooner or later they will catch up, even if it takes some more decades. And, who knows, maybe one day they even offer significantly better standards than the western countries. If that happens, would you think that it would be ok for them to impose tariffs on western goods or stop importing from western countries until we somehow find a way to catch up?
  - toyg 13y ago
    Yes, absolutely. In the interest of our shared planet and our fellow man, we should always strive to raise the bar. Chinese industry must be gently pushed away from make-it-cheap-make-it-quick practices that are unsustainable in the long period, both from an industrial perspective (sooner or later there will be someone cheaper than you) and from an environmental one.
specialist 13y ago
What is a "free market"? Can you (anyone) provide a real world example?
- talmand 13y ago
  I doubt you could find a true free market on a large scale as it is in the economic interests of most governments to be involved in their own markets. A truly free market on a large scale would ultimately be like a true democracy, bad for people in the long run. I suppose you could find examples of it in places that use a barter system that doesn't involve much, if any, government.
- rogerbinns 13y ago
  There is a wikipedia page with lots of content. Some useful characteristics are: - free entry and exit: people can enter as suppliers or exit. Many markets are like this. Some aren't such as hospitals in most states in the US where you have to get a certificate of need, and it will only be granted if yours won't affect existing ones. - mostly homogenous fungible products: you can do this for shoes, eggs and solar panels since they are substantially the same. This is significantly less true for nuclear submarines for the military because they are custom designs, and limited to builders with appropriate blessing and security clearances - available information: the demand side can get information about the supplies on offer. You can do this for shoes and pretty much most things that have lots of reviews on Amazon. You can't for US healthcare since even pricing info isn't available in advance, nor is exactly what you are going to get.
apalmer 13y ago
-- The people distorting them are usually the ones who end up worse off. No, not really, ever successful business tries to shift away from a ideological free market. That's the nature of the beast, after all in an ideological free market prices free fall to the lowest possible level. And surely you should be aware from a empirical historical standpoint the statement is completely and utterly false.
talmand 13y ago
They would be worse off only if they are dumb. You provide the reason in your second paragraph. The reason for dumping is to gain market share. Once a suitable amount of market share has been reached then prices will rise to profitability. I don't believe the technology moves fast enough in this regard to resist the effects of dumping. Any new innovation that the Germans could introduce that would lower their costs enough that would allow them lower prices than the Chinese dumping would almost certainly be available to the Chinese. Who would then lower their prices yet again. You do have the right idea about free markets correcting itself, in most cases. But a truly free market would result in all the German companies going out of business with the result being almost all panels coming from China. That would be bad for Germany but good for China. The reason to get in there to regulate that is because, under a truly free market, it would be possible for one region to totally decimate another region's economy due to numerous social and economic differences between the regions. Think of locusts. They fly to a crop, eat everything, and fly away. Good for the locusts but bad for the farmer.

toyg 13y ago

There's also an issue of quality control and environmental impact: we know that technology manufactured in the EU will, in most cases, satisfy a number of very stringent tests aimed at guaranteeing the wellbeing of workers and consumers, and at maintaining low pollution levels. Despite recent changes in policy, this cannot be said with certainty for most items produced in China. I don't see why prices shouldn't be artificially corrected to reflect that.

tjansen 13y ago
Because if you impose tariffs on such goods, these countries will never be able to improve their standard of living. The lower standards give them a chance to produce for lower prices and thus participate in the global market. If you look at Asia, even though things are not perfect today, their standard of living is continously improving. Sooner or later they will catch up, even if it takes some more decades. And, who knows, maybe one day they even offer significantly better standards than the western countries. If that happens, would you think that it would be ok for them to impose tariffs on western goods or stop importing from western countries until we somehow find a way to catch up?
- toyg 13y ago
  Yes, absolutely. In the interest of our shared planet and our fellow man, we should always strive to raise the bar. Chinese industry must be gently pushed away from make-it-cheap-make-it-quick practices that are unsustainable in the long period, both from an industrial perspective (sooner or later there will be someone cheaper than you) and from an environmental one.

specialist 13y ago

What is a "free market"? Can you (anyone) provide a real world example?

talmand 13y ago
I doubt you could find a true free market on a large scale as it is in the economic interests of most governments to be involved in their own markets. A truly free market on a large scale would ultimately be like a true democracy, bad for people in the long run. I suppose you could find examples of it in places that use a barter system that doesn't involve much, if any, government.
rogerbinns 13y ago
There is a wikipedia page with lots of content. Some useful characteristics are: - free entry and exit: people can enter as suppliers or exit. Many markets are like this. Some aren't such as hospitals in most states in the US where you have to get a certificate of need, and it will only be granted if yours won't affect existing ones. - mostly homogenous fungible products: you can do this for shoes, eggs and solar panels since they are substantially the same. This is significantly less true for nuclear submarines for the military because they are custom designs, and limited to builders with appropriate blessing and security clearances - available information: the demand side can get information about the supplies on offer. You can do this for shoes and pretty much most things that have lots of reviews on Amazon. You can't for US healthcare since even pricing info isn't available in advance, nor is exactly what you are going to get.

apalmer 13y ago

-- The people distorting them are usually the ones who end up worse off. No, not really, ever successful business tries to shift away from a ideological free market. That's the nature of the beast, after all in an ideological free market prices free fall to the lowest possible level. And surely you should be aware from a empirical historical standpoint the statement is completely and utterly false.

talmand 13y ago

They would be worse off only if they are dumb. You provide the reason in your second paragraph. The reason for dumping is to gain market share. Once a suitable amount of market share has been reached then prices will rise to profitability. I don't believe the technology moves fast enough in this regard to resist the effects of dumping. Any new innovation that the Germans could introduce that would lower their costs enough that would allow them lower prices than the Chinese dumping would almost certainly be available to the Chinese. Who would then lower their prices yet again. You do have the right idea about free markets correcting itself, in most cases. But a truly free market would result in all the German companies going out of business with the result being almost all panels coming from China. That would be bad for Germany but good for China. The reason to get in there to regulate that is because, under a truly free market, it would be possible for one region to totally decimate another region's economy due to numerous social and economic differences between the regions. Think of locusts. They fly to a crop, eat everything, and fly away. Good for the locusts but bad for the farmer.