Friday, June 14, 2013

New York City Considers Jail, Fine for Buyers of Fake Designer Goods

In the article, New York City Considers Jail, Fine for Buyers of Fake Designer Goods by Steven Nelson, it states that New York City Council, Margaret Chin is proposing harsher punishment for buyers who purchase counterfeit trademark items, such as handbags and electronics. Currently, the draft of the bill states it is illegal to "purchase a tangible item containing a counterfeit trademark when such person knows or should have known such trademark is counterfeit for reasons including, but not limited to, the quality and price of the purchased item, and/or the condition of the seller and the sale location."

In terms of protecting liberty, the government would be protecting the rights to a certain design of a product. However, in order for counterfeit sellers to make a profit selling these goods, they have to use lower quality products in making these goods, thus making a lower quality product overall. People who are willing to purchase a lower quality product for a lower price than the higher quality version will. Their item will probably also break down more quickly or have technical issues. For this reason, I don't believe that counterfeit sellers have much if any impact on the sales of the trademark products. I also don't believe that Margaret Chin has put this proposal into action in order to protect trademark items. 

I believe that Chin has proposed this bill for personal reasons. Counterfeit sellers are not hurting their possible trademark competitors nor any other third party. There is no market failure. If anything this bill would decrease competition and increase the price of trademark items, making it even more difficult for consumers to afford them. Counterfeiters are simply making a decent profit of the sale of a more cheaply made, similar item. Chin should not be using force to tell consumers what they can and cannot buy as this removes voluntary action and thus spontaneous order will not occur. 

The real reason Chin is proposing this bill is more likely that she feels that her  social status is somehow  threatened because while she owns an authentic bag others around her are buying the "same thing" but at a lower price because they cannot afford what she can.

1 comment:

Larry Eubanks said...

So, you say she is rent seeking?