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Draft Paper – Not to be cited without author’s permission

dumping refers to the externalization of the social costs of low cost mass production, costs to all of society that arise from paying farm workers below living wages, forcing their children to join them in the fields, not paying social security, concentrating land ownership , etc.

Purple box: Environmental dumping

American agribusinesses pay 3 to 4 times less for their petroleum than most of the rest of the world, at the cost of petroleum exploration by large oil companies that despoil big chunks of the world’s environment. The industrialized farming systems of the big agroexporters, both North and South, generate massive externalities not calculated in their production costs, including soil erosion, compaction and salinization, groundwater contamination with chemical pesticides and fertilizers, loss of biodiversity, pesticide

poisonings, etc.

White box: Monetary dumping A country whose currency is the universal standard (the US today, perhaps the EU in the near future) has the unique privilege of being able to borrow and reimburse its foreign debts in its own currency, without being penalized by devaluation, thus reinforcing the competitiveness of its products. At the same time it can go on importing products without being penalized by dollar (or in the future, Euro) depreciation, since most commodities and many industrial products are routinely traded in dollars. On the other hand, poorer countries suffer from what might be called a “reverse White box effect,” in the sense that their domestic currency is not very convertible, so they have to maintain very high real interest rates in order to attract capital flows and limit capital outflows, making investment in agricultural production by their farmers more expensive.


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