The Basing-Point System: An Economic Analysis of a Controversial Pricing Practice

The Basing-Point System: An Economic Analysis of a Controversial Pricing Practice

The Basing-Point System: An Economic Analysis of a Controversial Pricing Practice

The Basing-Point System: An Economic Analysis of a Controversial Pricing Practice

Excerpt

The Cement decision by the Supreme Court in April 1948, declaring the basing-point system unlawful, and the subsequent reaction of influential business circles made a timely, politically "hot" subject out of what had been a merely academic discussion. With a Senate Committee holding hearings and the press publishing almost daily reports on the basing-point problem, it became apparent to me that material on this subject which I have been preparing as part of a forthcoming book, The Economics of Price Discrimination, needed to be issued at once. With this my publishers agreed. This is it.

The book gives a description of the basing-point system and its operation -- stressing the essentials and omitting the details; tells the story of the development of the system and of its bouts with the antitrust lawsgiving the highlights and omitting the trivia; examines the arguments about its monopolistic and discriminatory nature-presenting a fairly full discussion of the issues involved; analyzes the economic consequences of the pricing practice and concludes with a theoretical evaluation of the cost of abolishing the system. The book is rich in economic theory and poor in statistical material. This, perhaps, is partly due to innate failings of the author, but chiefly to the fact that most of the relevant data are closely guarded business secrets and some are unknown even to the businessmen concerned. I feel the material can be read with profit not only by professional economists but by the vast number of businessmen who must be conversant with the problem.

The Blakiston Company has done a remarkable job in producing this book with what nowadays is record speed. This was achieved at extra cost which the company assumed, realizing that it could render a public service in bringing out this study in time for consideration by those interested in the sound and honest solution of the current political con-

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