a nation of outlaws - the boston globe
DESCRIPTION
Wild EastTRANSCRIPT
-
7/21/2015 AnationofoutlawsTheBostonGlobe
http://www.boston.com/news/education/higher/articles/2007/08/26/a_nation_of_outlaws/?page=full 1/4
Today'sGlobeLocalPoliticsOpinionMagazineEducationNECNSpecialreportsObituaries Traffic|Weather|Mobile
HOME>NEWS>EDUCATION>HIGHEREDUCATION
AnationofoutlawsAcenturyago,thatwasn'tChinaitwasusByStephenMihm|August26,2007
Ifrecentheadlinesareanyindication,China'srapsheetofcapitalistcrimesisgrowingasfastasitseconomy.Havingexportedpoisonpetfoodandtoothpastelacedwithantifreezeearlierthisyear,theworld'semergingeconomicpowerhousehasdiversifiedintoother,equallydubiousproductlines:scallopscoatedwithputrefyingbacteria,counterfeitdiabetestests,piratedHarryPotterbooks,andbabybibscoatedwithlead,tonamebutafew.
PoliticiansarebelatedlyputtingChinaonnotice.RepresentativeFrankWolfofVirginiadeliveredoneofthemorestingingcounterattackslastmonth,warningthattheUnitedStates"mustbevigilantaboutprotectingthevaluesweholddear"inthefaceofChina'sdepredations.
HisangerreflectsthemountingdisgustwithhowrecklesslyChinapliesitstrade,apparentlywithoutregardforthethingsthatmakecommercenotonlydependablebutpossible:respectforintellectualproperty,foodanddrugpurity,andbasicproductsafety.Witheachtawdryrevelation,China'sbrandofcapitalismlooksincreasinglymenacingandforeigntoourownsensibilities.
That'satemptingwaytoseethings,butwrong.What'shappeninghalfwayaroundtheworldmaybedisturbing,evendisgraceful,butit'shardlyforeign.Acenturyandahalfago,anotherfastgrowingnationhadareputationforsacrificingstandardstoitspursuitofprofit,anditwastheUnitedStates.
AswithChinaandHarryPotter,AmericawasahotbedofliterarypiracylikeChina'spoisonouspetfoodmakers,Americanfactoriesturnedoutadulteratedfoodsandwillfullymislabeledproducts.Indeed,toseeChinatodayistoglimpse,inadistantmirror,the19thcenturyAmericaneconomyinallitscornercutting,fraudulentglory.
Chinamaybeaverydifferentcountry,butinmanywaysitisayoungerversionofus.Thesoonerweunderstandthis,thesoonerwecanrealizethatChina'sfastandloosebrandofcommerceisnotanexpressionofnationalcharacter,muchlessaconspiracytopoisonusandourpets,butaphaseinthecountry'sdevelopment.Callitadolescentcapitalism,ifyouwill:burstingwithenergy,exuberant,dynamic.Likeanyteenager,China'sbehaviorisalsomaddening,irresponsible,anddangerous.Butitisaphase,andunderstandingitthatwaygivesussomemuchneededperspective,aswellassometoolsforhandlingtheproblem.Indeed,ifwewanttounderstandhowtodealwithChina,wecoulddoworsethanlooktoourownhistoryasaguide.
Abitofempathymightevenbeinorder.Onehundredandfiftyyearsago,evenAmerica'sclosesttradepartnersweredespairingaboutourcheatingways.CharlesDickens,whovisitedin1842,was,likemanyBritons,stunnedbytheeconomicambitionofournation'sinhabitants,andappalledbywhattheywoulddoforthesakeofprofit.WhenhefirststeppedofftheboatinBoston,hefoundthecity'sbookstoresrifewithpiratedcopiesofhisnovels,alongwiththoseofhiscountrymen.Dickenswouldlaterdeliverlecturesdecryingthepractice,andwrotehomeinoutrage:"mybloodsoboiledasIthoughtofthemonstrousinjustice."
IntheUnitedStatesoftheearly19thcentury,capitalismasweknowittodaywasstillverymuchinitsinfancy.Mostpeoplestilllivedonsmallfarms,and
Advertisement
BOSTON.COM'SMOSTEMAILEDSEARCHTHEARCHIVES
AllGlobestoriessince2003arenowFREE
TodayYesterdayPast30daysLast12monthsSince1979
Moresearchoptions
ADVERTISEMENTAdvertisement
LATESTEDUCATIONNEWS
-
7/21/2015 AnationofoutlawsTheBostonGlobe
http://www.boston.com/news/education/higher/articles/2007/08/26/a_nation_of_outlaws/?page=full 2/4
despitethepersistentmyththatAmericawasthelandoflaissezfaire,therewereplentyoflawsonthebooksaimedatkeepingtightreinsonthemarketeconomy.Butascommercebecamemorecomplex,andstretchedovergreaterdistances,thispatchworksystemoflocalandstatelevelregulationswasgraduallyoverwhelmedbyanewgenerationofwheelerdealerentrepreneurs.
TakingapagefromtheBritish,whohadpioneeredmanyingeniousmethodsofadulterationagenerationortwoearlier,Americanmanufacturers,distributors,andvendorsoffoodbegantamperingwiththeirproductsenmassebulkingoutsupplieswithcheapfiller,usingdangerousadditivestomaskspoilageortogivefoodstuffsamoreappealingcolor.
AcommitteeofwouldbereformerswhometinBostonin1859launchedoneofthefirststudiesofAmericanfoodpurity,andtheirfindingsmakeforlessthanappetizingreading:candywasfoundtocontainarsenicanddyedwithcopperchlorideconnivingbrewersmixedextractsof"nuxvomica,"atreethatyieldsstrychnine,tosimulatethebittertasteofhops.Picklescontainedcoppersulphate,andcustardpowdersyieldedtracesoflead.SugarwasblendedwithplasterofParis,aswasflour.Milkhadbeenwatereddown,thenbulkedupwithchalkandsheep'sbrains.Hundredpoundbagsofcoffeelabeled"FineOldJava"turnedouttoconsistofthreefifthsdriedpeas,onefifthchicory,andonlyonefifthcoffee.
Thoughtherewastheoccasionalclumsyattemptatdomesticreformbymidcenturymostfamouslyinresponsetothepracticeofselling"swillmilk"takenfromdiseasedcowsforcefedadietoftoxicrefuseproducedbyliquordistillerieslittlechanged.AndjustastheworstsufferersofadulteratedfoodinChinatodayaretheChinese,soitwastheAmericanswhosufferedintheearly19thcenturyUnitedStates.ButwhenAmericastartedexportingfoodmorebroadlyaftertheCivilWar,thepracticestartedtocatchuptous.
Oneofthefirstinternationalscandalsinvolved"oleomargarine,"abuttersubstituteoriginallymadefromanalchemicalprocessinvolvingbeeffat,cattlestomach,andforgoodmeasure,finelydicedcow,hog,andeweudders.This"greasycounterfeit,"asonecriticcalledit,wasshippedtoEuropeasgenuinebutter,leadingtoaprecipitousdeclineinbutterexportsbythemid1880s.(Wilyentrepreneurs,recognizinganopportunity,boughtupgenuinebutterinBoston,affixedcounterfeitlabelsofBritishbuttermanufacturers,andshippedthemtoEngland.)Thesamedecadesawasimilar,thoughlessunsettlingproblemasBritishauthoritiesdiscoveredthatlardimportedfromtheUnitedStateswasoftenadulteratedwithcottonseedoil.
Evenworsewasthemeatpackingindustry,whosepracticespromptedatradewarwithseveralEuropeannations.The20thcenturymalfeasanceoftheindustryiswellknowntoday:"deviledham"madeofbeeffat,tripe,andvealbyproductssausagesmadefromtubercularporkand,ifUptonSinclairistobebelieved,lardcontainingtracesoftheoccasionalhumanvictimofworkplaceaccidents.Buttheinternationalarenawasthesceneofsomeofthefirstscandals,mostnotablyin1879,whenGermanyaccusedtheUnitedStatesofexportingporkcontaminatedwithtrichinaewormsandcholera.ThatledseveralcountriestoboycottAmericanpork.Similarscaresoverbeefinfectedwithalungdiseaseintensifiedthesetradebattles.
Food,ofcourse,wasonlythebeginning.Intheliteraryrealm,formostofthe19thcenturytheUnitedStatesremainedanoutlawintheworldofinternationalcopyright.Thenation'spublishersmerrilypiratedbookswithoutpermission,andwithoutpayingtheauthorsororiginalpublishersadime.WhenDickenspublishedascathingaccountofhisvisit,"AmericanNotesforGeneralCirculation,"itwas,appropriatelyenough,immediatelypiratedintheUnitedStates.
Inoneindustryafteranother,19thcenturyAmericanproducerschurnedoutcounterfeitproductsinremarkablequantities,slappingfakelabelsonlocallymadeknockoffsofforeignales,wines,gloves,andthread.Asoneexposeatthetimeputit:"Wehave'Parishats'madeinNewYork,'LondonGin'and'LondonPorter'thatneverwasinaship'shold,'SuperfineFrenchpaper'madeinMassachusetts."
Counterfeitersofpatentmedicineswereespeciallynotorious.Thiswasabitironic,giventhatmostoftheseremedieswereprettyspuriousalready,butthatdidn'tstopthepractice.Themostelaborateschemesinvolvedimportingemptybottles,fillingthemwithbogusconcoctions,andthenaffixingfakelabelsfromwellrespectedEuropeanfirms.
Americansalsodisplayedaparticulartalentforcounterfeitingcurrency.Thiswasatimewhenindividualbanks,notthefederalgovernment,suppliedthenation'spapermoneyinabewilderingvarietyofsocalled"banknotes."
-
7/21/2015 AnationofoutlawsTheBostonGlobe
http://www.boston.com/news/education/higher/articles/2007/08/26/a_nation_of_outlaws/?page=full 3/4
Counterfeitersflourishedtothepointthatin1862oneBritishwriter,aftercountingcloseto6,000differentspeciesofcounterfeitorfraudulentbillsincirculation,couldreasonablyassurehisreadersthat"inAmerica,counterfeitinghaslongbeenpracticedonascalewhichtomanywillappearincredible."
Whatwasitthatmadethe19thcenturyUnitedStatessuchahotbedofbogusgoods?AndwhyisChina'seconomicboomtoday,asNewYorkTimeswriterHowardFrenchcluckedearlierthismonth,"mintedincounterfeit"?
Piracy,fraud,andcounterfeiting,whetherofcurrency,commodities,orbrandnameelectronics,flourishesataparticularmomentinacapitalistsociety:theregulatoryinterregnumthatemergesinthewakeoffastpacedcapitalistchange.Thisperiodisoneinwhichtechnologyhasimproved,oftendramatically,andmarketshavebursttheirolderboundaries.Yetthecountrystillreliesonobsoletewaysofcontrollingcommerce.Untilthere'ssomethingtoreplacethem,counterfeitersandotherflimflamoperatorsflourish,pushingnewmeansofmakingmoneytotheirlogical,ifunethical,conclusion.
Indeed,theeasewithwhichcounterfeitersandcornercuttersoperateinChinatodaycanbeattributedtomanyofthesamefailingsthatplaguedtheUnitedStates150yearsago:aweak,outdatedregulatoryregimeillsuitedtohandlingthecomplexitiesofmoderncommercelimitedincentivesforthestatetopoliceandeliminatefraudand,perhapsmostimportantofall,ablurringofthelinesbetweenlegitimateandfraudulentmeansofmakingmoney.
Allofthesearetypicalofcapitalisminitsearly,exuberantphaseofdevelopment.TheUnitedStatesmayhavebeentheworstoffender,butearlyindustrialBritainhadsignificantproblemswithfoodadulterationandcounterfeiting,andRussiafromthe1990sonwardhasbeenthesceneofsomeoftheworstcapitalistexcessesinrecentmemory.AndinalllikelihoodChina'srecklessnessisjustthat:aphasethatwilleventuallypasswhenthenation'sregulatoryinstitutionscatchupwithitseconomicambition.
NoneofthisistosuggestthatweshouldexonerateChinaforshippingpoisonouspetfoodandleadimpregnatedtoys,northatwecancountonChinamerelytofollowinourfootsteps.Thereare,obviously,enormousdifferencesbetweenmodernChinaandtheUnitedStatesof150yearsago.Chinaisnotademocracyhoweverangryitscitizensmaybe,theyhavelimitedcapacitytotranslatetheirrageintolegislationaimedatputtingthebrakesontheeconomicfreeforall.Andthere'snoequivalentofthemuckrakingAmericanjournalistswhothrusttheseissuesintothepublicspotlight.Justasbad,manyoftheworstexcessesarebeingconductedundertheauspicesofthestate.
Butunderstandingtheparallelsdoessuggestawaytomoveforward.TherogueindustriesoftheUnitedStateseventuallyrespondedtostiffinternationaleconomicpressure.Beginninginthe1880s,theEuropeanmeatboycottsspurredCongresstopassaraftoffederallegislationaimedatimposingsomeinspectioncontrolsontheexportsofmeat.Inresponse,EuropeancountriesopenedtheirdoorstoAmericanmeatagain.Andin1891,Congressfinallybowedtodecadesofangrylobbyingandpassedaninternationalcopyrightlawthatprotectedforeignauthors.
Atacertainpoint,someofthepushforchangecancomefromwithin.Asacapitalistsystemevolves,therecancomeatimewhensomeplayersintheeconomyprefertobeheldtomorestringentstandards,evenonesthatimposeadditionalcosts.
Partly,thishappenswhenacountrybeginsproducingandexportingoriginalgoodsthatmightappealtocounterfeiterselsewhere.TheUnitedStates,forinstance,strengtheneditscopyrightlawstoprotectthegrowingnumberofAmericanauthorswhosebookssoldoverseas.IftheChinesemoviebusinessgainsasignificantinternationalaudience,it'ssafetosaythatHollywoodwillgetabetterreceptionnexttimeitcomplainsaboutknockoffDVDsofthelatestBruceWillisflick.
InthescandalrackedAmericanfoodbusiness,severalindustryleadersconvertedtothecauseofregulationinnosmallpartbecausetherewasmoneytobemade:Certaincompetitorswouldbeputatadisadvantage,andthenewfederallawswouldbanishtheinefficienciesoftheolderpatchworkofstatelevelregulation.
Butatamorefundamentallevel,producersbegantorealizethattheycouldreapbigprofitsfromsimpletrust.By1905,businessleadersweretestifyinginCongressthatthefederalgovernmentcould"domuchtowardpreservingthereputationofUSfoodsabroad"inotherwords,theycouldmakemoremoneyifpotentialtradingpartnersbelievedtheUnitedStateswasfinally
-
7/21/2015 AnationofoutlawsTheBostonGlobe
http://www.boston.com/news/education/higher/articles/2007/08/26/a_nation_of_outlaws/?page=full 4/4
cleaningupitsact.Andthat'sexactlywhathappenedwiththepassageofthelandmarkFoodandDrugActthefollowingyear.
Witheachregulatoryadvance,theUnitedStatesbegangainingthetrustofitsownconsumers,alongwiththerestoftheworld.Intheprocessitwentfrombeinganupstarttothemostpowerfuleconomyontheglobe.Chinaisfarmorethananupstartalready,butasrecenteventssuggest,ithasalongwaytogobeforeitemerges,astheUnitedStatesoncedid,fromitsownrecklessyouth.
Indeed,iftheChinesearetrulyfollowingDengXiaoping'sapocryphalmaxim,"togetrichisglorious,"thentheirownentrepreneursandindustriesmayeventuallyrecognizethattogetrichwhilebowingtointernationalstandardsmaybeequallygloriousandevenmoreprofitable.
StephenMihmisanassistantprofessorofAmericanhistoryattheUniversityofGeorgiaandistheauthorof"ANationofCounterfeiters,"tobepublishedthisweekbyHarvardUniversityPress.
Copyright2007GlobeNewspaperCompany.1234RelatedarticlesonBoston.com
More:
GlobeEducationstories|Educationsection|Globefrontpage|Boston.com
Signupfor:GlobeHeadlinesemail|BreakingNewsAlerts
PrinterfriendlySinglepageEmailtoafriendEducationRSSfeedAvailableRSSfeedsMostemailedReprints&LicensingShareonDiggShareonFacebookSavethisarticle
poweredbyDel.icio.us
feedbackform|help|sitemap|privacypolicy|rss2015TheNewYorkTimesCompany