People Don't Look to Buy Counterfeits, They Buy Unauthorized Copies

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Tuesday, 26 April 2011 19:44

In NYC there is an effort underway to fine people for buying unauthorized copies of designer products. This story mistakenly refers to these products as counterfeit. They are not counterfeit for the simple reason that there is no effort to pass them off as the real thing.

When someone hands you a counterfeit $20 bill, they do not want you know that it is not real. According to the article, the customers know full well that the designer items are not in fact the real thing but rather copies of the real thing.

This distinction is important because the customer is benefiting from this transaction. If the government prevents them from buying unauthorized copies then these customers will have to pay more to buy a similar item -- it is similar to imposing a tax. This price increase reduces customers' real wages and thereby gives them less incentive to work. 

The fact that the customer is not deceived also means that they will not be an ally in cracking down on unauthorized copies. On the other hand, if they were actually being sold counterfeit items then presumably they would be willing to assist law enforcement in cracking down on the people who ripped them off. (Thanks to CTC for the tip.)