a nation of outlaws - the boston globe

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Today's Globe Local Politics Opinion Magazine Education NECN Special reports Obituaries Traffic | Weather | Mobile HOME > NEWS > EDUCATION > HIGHER EDUCATION A nation of outlaws A century ago, that wasn't China it was us By Stephen Mihm | August 26, 2007 If recent headlines are any indication, China's rap sheet of capitalist crimes is growing as fast as its economy. Having exported poison pet food and toothpaste laced with antifreeze earlier this year, the world's emerging economic powerhouse has diversified into other, equally dubious product lines: scallops coated with putrefying bacteria, counterfeit diabetes tests, pirated Harry Potter books, and baby bibs coated with lead, to name but a few. Politicians are belatedly putting China on notice. Representative Frank Wolf of Virginia delivered one of the more stinging counterattacks last month, warning that the United States "must be vigilant about protecting the values we hold dear" in the face of China's depredations. His anger reflects the mounting disgust with how recklessly China plies its trade, apparently without regard for the things that make commerce not only dependable but possible: respect for intellectual property, food and drug purity, and basic product safety. With each tawdry revelation, China's brand of capitalism looks increasingly menacing and foreign to our own sensibilities. That's a tempting way to see things, but wrong. What's happening halfway around the world may be disturbing, even disgraceful, but it's hardly foreign. A century and a half ago, another fastgrowing nation had a reputation for sacrificing standards to its pursuit of profit, and it was the United States. As with China and Harry Potter, America was a hotbed of literary piracy; like China's poisonous petfood makers, American factories turned out adulterated foods and willfully mislabeled products. Indeed, to see China today is to glimpse, in a distant mirror, the 19thcentury American economy in all its cornercutting, fraudulent glory. China may be a very different country, but in many ways it is a younger version of us. The sooner we understand this, the sooner we can realize that China's fast and loose brand of commerce is not an expression of national character, much less a conspiracy to poison us and our pets, but a phase in the country's development. Call it adolescent capitalism, if you will: bursting with energy, exuberant, dynamic. Like any teenager, China's behavior is also maddening, irresponsible, and dangerous. But it is a phase, and understanding it that way gives us some muchneeded perspective, as well as some tools for handling the problem. Indeed, if we want to understand how to deal with China, we could do worse than look to our own history as a guide. A bit of empathy might even be in order. One hundred and fifty years ago, even America's closest trade partners were despairing about our cheating ways. Charles Dickens, who visited in 1842, was, like many Britons, stunned by the economic ambition of our nation's inhabitants, and appalled by what they would do for the sake of profit. When he first stepped off the boat in Boston, he found the city's bookstores rife with pirated copies of his novels, along with those of his countrymen. Dickens would later deliver lectures decrying the practice, and wrote home in outrage: "my blood so boiled as I thought of the monstrous injustice." In the United States of the early 19th century, capitalism as we know it today was still very much in its infancy. Most people still lived on small farms, and Advertisement BOSTON.COM'S MOST EMAILED SEARCH THE ARCHIVES All Globe stories since 2003 are now FREE Today Yesterday Past 30 days Last 12 months Since 1979  More search options ADVERTISEMENT Advertisement  LATEST EDUCATION NEWS

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  • 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

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    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

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  • 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

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