Dumping as Price Discrimination: Jannaccone’s Classic Theory Before Viner

Abstract

Dumping actions and anti-dumping policies were regularly on the political agenda for several years in the pre-World War I period in Europe and the United States. In Italy, politics, economic circles, and scholars were engaged in debate on whether to protect sensitive industries threatened by sales below cost in their home markets, practiced by foreign competitors. Einaudi and his school of economics tackled the issue with several publications. In this paper we focus on Jannaccone’s essays, which he contributed to both a symposium in Riforma sociale in March 1914 and an issue in Rivista delle società commerciali in June 1914. Although we recognize that Viner (1923) theoretically systematized dumping in the wider framework of international trade, we nevertheless claim that the theoretical origin of dumping, in a context of imperfect competition, was Jannaccone’s essay. We show that Jannaccone proposed an early theory of dumping as an instance of the more general theory of price discrimination. He defined and classified dumping; he developed a static analysis of its profitability; he investigated the effects of dumping in both domestic and foreign markets; and he analyzed the effect of protectionism and its policy implications.

Pigou, Del Vecchio, and Sraffa: the 1955 International “Antonio Feltrinelli” Prize for the Economic and Social Sciences

“…As Mario Pomini (2014, p. 7; see also Legris, 1995;Galegatti, 1990) has indicated, the Marshallian tradition in Italy was based around Maffeo Pantaleoni, Umberto Ricci Luigi Einaudi, as well as Jannaconne and Fanno. Jannacone came to prominence in Italy as the third generation leader of the 'Turin School' of economics, established by Salvatore Cognetti de Martiis and ably developed by Einaudi (Marchionatti et al, 2013;Cantono, Marchionatti, 2012;Zaccagnini, 1961). 8 Fanno held the chair of political economy at the University of Padova 9 and he is known, internationally as well as within Italy, for his 'overinvestment' theory of business cycles, which drew on Knut Wickell's idea of a cumulative process ignited by differences between the natural and the banking interest rates in a credit economy (Davanzati and Realfonzo, 2001;Faucci, 2000, pp.…”

When Italian economics “Was Second to None”. Luigi Einaudi and the Turin School of Economics

“…Jannaccone's important contribution, on the other hand, addresses the problem in the phenomenology of imperfect competition, offering an important early contribution that foreshadows the subsequent developments of the general theory in this sphere. Dumping, in Jannaccone's theoretical framework, is a special case of the more general price discrimination that occurs when individual units of the same good are sold simultaneously (Cantono-Marchionatti 2010).…”