One of the weird self-correcting phenomenon you see in drug markets – street drugs, that is – is the intolerance for fakes. If a dealer gets caught passing off baby laxative as coke he is going to be dead. It is not just that he ripped off his customers; it is that he cheats his fellow drug dealers. The guy selling fake stuff raises everyone’s costs and risks. Pawn shops willingly cooperate with the police to counter theft for similar reasons. Their customers are not going to solicit a business that supports burglary. Antique dealers try to uncover fakes as it undercuts their business. Why spend big money on an original when you can get a fake? That does not stop the fakers, but it is an organic mechanism to police it. Highly distributed markets can do this. Centralized industries like music and movies cannot so they lobby the state to crack down on forgers.

There is a vast middle ground where most of us live and that’s where fakers can cause the most trouble. I was looking at NRO for something to aggravate me and saw this in their list of articles. It is not an article, but an ad dressed up to look like an article. National Review agrees to place ads like this in their article queue in order to trick people into clicking on the link. Magazines now have multi-page advertizements made to look like one of their stories. Even more strange is the ad in question here is itself full of fake stuff. The whole xenoestrogen stuff is largely nonsense, at least as it relates to organic food. Plants have all sorts of tricks to ward off pests and they often consider humans to be pests. A cobra is organic, too.

It does not stop there. According to this story in the Economist, academic papers are also being forged. The market for fake term papers is well developed. You can probably outsource your thesis if you are so inclined. To no one’s surprise, the epicenter of this new fraud is China. It seems like their entire culture is designed around deception. We get the term “sand bag” from China. In the colonial days, Chinese tea merchants would put sandbags at the bottom of casks to defraud the British. It is a bandit culture with no history of integrity. I know of companies that have to use special coding on their boxes to distinguish their product from the fakes as the Chinese will fake even the most mundane things.

Like the fake news story, fake research has a terrible trade off. If I can no longer tell the real stories in a magazine from the ads, I stop buying the magazine. If we can no longer distinguish real research from fake stuff from China, we no longer do research because no one can trust it. It strikes me as I type this that the great challenge to the West is how to deal with the massive on-going criminal enterprise known as the People’s Republic of China. Their hacking, credit fraud, piracy and knock-offs have real costs to the West. How long before it stops making sense to do business with them? I block all Chinese IP’s from this site because of spammers. How long before banks start to consider doing the same?