Candlemakers Petition

Once upon a time (1845), in a faraway land (France), a patriot (economist) named Frédéric Bastiat had a brilliant (?) discovery.

He saw that the lighting industry was being mercilessly destroyed by a foreign “rival who … is flooding the domestic market with [light] at an incredibly low price” and asked for the government’s actions.

That wretched rival who showed no respect for the indigenous people of his country, who so perfidiously stole the income of many, was none other than – the Sun.

When I read the Lieber Case, I was reminded of the Candlemaker Petition, for in both, export dumping, or selling below domestic cost in a foreign market, was evident.

Though the petition was satirical of French Protectionism at best, it resembled the problems industries often face. When trades are being invaded by predatory pricing from an international rival, should the businesses lower and match that predatory pricing?

In class, we learned that businesses need to at least reach the break-even point. When we added up the fixed costs and overheads, price war seemed unrealistic. Perhaps the best thing to do, then, is to wait until the other side breaks? But… will the Sun ever fade?