May 27, 2013

Why do people trust knockoffs when it's a matter of life and death?

Steve Sailer posts about an article in Fortune that details how an Indian generic drug maker, Ranbaxy, defrauded everyone they dealt with, from American regulators like the FDA to the ultimate users of their drugs. Their drugs were "useless at best," but they didn't mind endangering who knows how many lives as long as they kept getting away with it, laughing all the way to the bank.

In the comments, someone extends this case to include all kinds of other cheap junk made abroad and fobbed off on the American / Western public as quality stuff, such as a washer from GE (foreign) vs. Whirlpool (American).

I don't buy the extension -- if you knew your GE washer was made in China, you already half-expect it to be a typical Made-In-China piece of shit. You feel angry that GE, an American firm, duped you into believing it was American-made, but once you realize it's effectively a foreign knockoff, you start to prepare for the inevitable.

It's not too different from finding out that the Fendi leather purse you bought for your Jersey Shore girlfriend on eBay is just some Canal Street knockoff made in China. Or remember when you were a kid and you were over at a friend's house, ready to pour yourself a bowl of what you thought were Fruit Loops from one of those tupperware-type cereal containers, and your friend advised you that it was actually second-rate Fruit Rings inside? You knew what to expect after learning of their generic status.

In the Ranbaxy case, we didn't think it was a high-profile, reputable, name-brand American firm who was making the drugs. We knew at least that they were a generic manufacturer, though not necessarily suspecting that they were also foreign. The key point is that their status as a mass producer of knockoff products (generic drugs) did not send up any red flags about quality. Indeed, we may have even felt grateful toward them for sticking up for the little guy, giving us the drugs that those fat cats in Big Pharma would never part with for so little money.

We are so angry at name-brand drug makers charging so much money for their products that we are eager for their monopoly phase to end, when the government regulators open the cages on all the Robin Hood generic companies who will pounce on the name-brand company, rip the product right out of their hands, and hand it over to us, the users -- for a small finder's fee, of course, but still way less than what the originators would have charged us.

Our love of Robin Hood type narratives blinds us to the fact that in cases like generic drugs or open-source software, they aren't simply lifting the name-brand goods and selling them to us at a deep discount compared to retail, in the way that a common thief rips off an iPad from the Apple Store to sell for $50 on Craigslist. They're selling us their imitation, their interpretation, their best guess, their took-a-stab-at-it project.

The common thief tries to keep it quiet that he ripped the iPad off from the name-brand store -- uh, I got it as a gift and don't want it. Just don't ask why I'm selling an unwanted gift, unopened and in high demand, for only a measly 20% of retail rather than 50% or 80%. I don't want that extra money because, uh, I just want to get it out of here fast, and a lower price will move it faster. Just don't ask why I'm in such a hurry to get rid of it...

The makers of generic drugs and open-source software, however, boldly preen before an assembled audience about skillfully ripping off the name-brand products, more or less, and passing them on so cheaply to average consumers. You can't score Robin Hood status points without proclaiming that you're robbing from the rich.

That narrative hits such a primitive pleasure button -- the adrenaline rush from seeing a noble underdog dethrone a corrupt Establishment figurehead -- that it short-circuits the parts of our brain responsible for checking the provenance of stuff that seems to be too good to be true, and that's being peddled by some unctuous salesman who seems overly eager to get them into our hands.

Sure, in the back of our minds, we know that a generic drug or Open Office can't be fully as good as the original, but it's so cheap -- and a tiny amount of quality dilution is worth it, just to fuck those price-gougers up the ass and boycott their overhyped products.

But boycotting is not the same as patronizing their competitors. Once you go down the latter path, you open yourself up to being preyed on by the competitors -- they know that you're so blinded by rage to stick it to the Establishment, that you'll buy whatever shit they peddle. They'll goad you on by shouting how smart you are to have lifted the veil of name-brand fetishism -- Step Right Up, ladies and gentlemen! And take your best shot against those fat cats we've rounded up and trapped in the dunk tank! Only $10 a pop! Go ahead -- you know you've been waiting your entire life to stick it to 'em!

Carnival hucksters could probably get ordinary people to shoot their own children between the eyes, as long as their faces were covered with burlap sacks, and as long as the pitch was about letting your worst enemy have it -- and for only a measly couple-a bucks. Just don't ask how I managed to overpower your worst enemy and serve them up for you on a silver platter, all without you ever asking me to do so. I'm just a justice-oriented kinda guy, y'know -- a modern-day Robin Hood, some might say.

The main alternative idea for this kind of stuff that I've read has to do with us trusting those who are in control of life-and-death parts of the economy because we view those areas as sacred, hence beyond normal market forces, and although plagued by a few bad apples, still presided over by more or less honest folks -- not by used car salesman types, at the very least.

But I don't think that idea captures the full richness of the picture. We don't just trust the generic makers more than we ought to -- we halfway worship them as Robin Hood figures, enlist them on our side to fuck over the big companies who've always been gouging our wallet. And there's a strong undercurrent of "the enemy of my enemy is my friend," which is easy to fit into the Robin Hood narrative, but not really into the story about trusting companies that deal with life-and-death matters.

Why don't we behave the same way toward cereal makers, then? Buy Fruit Rings by the barrel-full just to stick it to those fat cats over at Kellogg's who make Fruit Loops? Probably because we don't see the higher price of Fruit Loops as gouging, whereas expensive name-brand drugs jump out as a repeating heavy blow to our wallet. The prediction then is that the more some name-brand product costs, the more willing we are to blindly trust the generic makers who sell an alternative.

"I don't care if the Gucci bag is fake -- I mean, it's good enough, and looks close enough. I'm not gonna, like, let some huge company steal all my money for something that's only a little better."

This airheaded girl doesn't stop to think that maybe her Made-In-China knockoff is made from "leatherette" that's 50% used asbestos, and that's why it's so goddamn cheap. In a world where everyone's so obsessed with Keeping Down Costs, the producers will sell us lemons, and we'll be only too happy to buy them. All we need to do is take a look at life in China to find out how degraded and sub-human that mindset will make us.


  1. Speaking of China, it seems they have a problem with public defecation(especially children). I guess it is because they are so poor, but it seems to fit in, somehow, with your idea that many Chinese(and other East Asians) lack a disgust reflex.

    "Recent online images showing a child defecating in the aisle of an airplane has prompted public criticism of the child's parents and the inaction of the flight crew and other passengers.

    A netizen, self-identified as a female pilot, posted four photos on Saturday on micro blog platform Sina Weibo."


  2. Here's some more:

    "Historically, there has been a dearth of toilets in China. What's more, diapers have traditionally been expensive, and crotchless pants were seen as an acceptable solution.

    Against this backdrop, if parents can't find a toilet in, say, Guangzhou's subway stations, they might see the subway platform, or the subway itself, as a viable alternative. But on an airplane? Which has clearly marked toilets?

    Diapers are still expensive in China, so middle-class parents can purchase them for their children, but you still see crotchless pants in all manner places—from shopping malls to the Forbidden Palace. What's more, if grandparents are watching after the kid, they might be more inclined, because of the circumstances they grew up in, to let the kids go in public. Some kids, as they become teens, don't ween themselves off this way of thinking and do their business when they're out in public. It does reflect on their parents—something that people online in China are quick to point out when criticizing this behavior."


  3. Apparently, spitting is also a major problem in China:

    "The most disgusting Chinese habit that all foreigners seem to agree upon is spitting. They hack and spit everywhere, and not only outside. Why, you may wonder? It is claimed pollution is the problem.

    The air in cities, such as Beijing and Shanghai, is so bad that the simple act of breathing already irritates the throat so much that, like cats cough up hairballs, coughing and horking up mucus is the only way out.

    Others state the reason for this bad habit is linked to poverty. As poverty tends to make a person less civilized and China has been a poor country for so long, social and cultural etiquette have been degraded to the level where this kind of behavior is the standard. China is developing at a fast pace, but we all know that bad habits are the hardest to break."


  4. They also make more disgusting noises when they eat. Digestion leads directly to defecation, so it's understood by normal people to be somewhat taboo to make your own digestion stand out to others around you, though less taboo than making your own defecation or urination stand out.

    And it's not like the extra noises are signs of enjoyment, as though people criticizing Asian eating manners were Puritanical killjoys. Asians don't make sounds of pleasure like sighing, "mmm" half-moaning, etc., the way that you do when you just can't help how good the food tastes.

    It's more like how a robot would chew if its engineers didn't design it to be mindful of others. Munch munch munch, slurp slurp slurp, smack smack smack.

    But their co-ethnics don't have much of a sense of disgust, so they never faced any negative consequences for sounding so gross when they eat.

    "HBD realists" have little appreciation for how disgusting the East Asians are, from Japanese porn to Korean dog-eating, to Chinese public shitting. Hey, they have higher average IQs, ergo they must be more refined than us Westerners. Rushton's Rule says so!

  5. Might as well go a little further off-topic, but someone should catalogue all of the glaring exceptions to Rushton's Rule. Weighted not by the number of exceptions, but by their magnitude -- i.e., some really important area of life, and a really big departure from the Rule.

    Not to dump on him too much, but more on the "race realists," who aren't very realistic about Asians, Jews, and other groups with high IQs. "Race realism" generally means "IQ fetishism" nowadays.

  6. In India, milk is always thinned out by water.

    Even people in suburbs have access to milk straight from the cow because a suburbanite will keep a cow or sell the milk or a cowherder will be selling the milk. And this milk is always adulterated with water.

    If the rare housewife who keeps a cow does NOT thin the milk out with water, then she's considered, I don't know, out of it or hippy dippy.

    And this is the story with ALL food products. Anything that can be thinned out and adulterated in some way is.

  7. In India, grain and seeds of any kind always have some black stones in them. Because you buy this stuff in a sack by the weight, and the sellers deliberately make up some of the weight with stones.

    When people buy grains/seeds, they have to sift carefully for stones before cooking it.

  8. I've got to stick up for generic cereal here. I guess it might be 80% mouse droppings or something, but I've always thought it tasted as good as name brand stuff.

  9. " "Race realism" generally means "IQ fetishism" nowadays."

    This is understandable, since IQ is one of the only things actually studied about races.

    Also, the scientific establishment have published a bunch of studies about how IQ is negatively correlated with criminality. Its wrong, but still, its one of the few measures someone can point to.


  10. In India, milk is always thinned out by water.

    India is an amazing example of this. Certainly the Indians are truly degraded and subhuman beyond the Chinese (who tend to care a lot more about labels and brands).

    This airheaded girl doesn't stop to think that maybe her Made-In-China knockoff is made from "leatherette" that's 50% used asbestos, and that's why it's so goddamn cheap.

    Sure, maybe it's cheap because of that. But maybe the big brand version is made with 50% used asbestos as well, but the owners keep more of the profit. Ultimately, trusting that expensive brands are well made is dumb. Big producers still put horsemeat in their burgers and melamine in the milk if they can get away with it.

  11. LOL, I had no idea about some of this stuff. I can't believe these other countries operate like this. And on the cereal thing, I can definitely tell the difference between generic and name-brand.

    I guess I'm just a "sheltered" American.

  12. On a somewhat-related note, I'll relay a comment I made on Steve's blog as well. There is a huge house (~20,000 sq. ft.) being built near my workplace. It has been open to the public the past few weekends. I spent 45 minutes waiting in line to tour the place, and an hour inside. I mention this because word on the street is that the guy building the house is a lawyer for Pfizer. Huge money involved in pharmaceuticals.

  13. FWG,
    That man sounds incredibly tacky.

    Kind of related to Agnostic's comments in this thread, but does he bear any resemblance to "those people", the hedge-fund managers, in this delicious Tom Wolfe article?

  14. That's another thing worth adding to your pantheon of traits associated with pastoralists, farmers, hunter-gatherers, and horticulturalists: why some people prefer big-name brands, while others hate big-name brands.

    I'd assume that some of our ancestral societies were egalitarian and some weren't. This is why some people hate it when one brand gets too big. On the other hand, some people prefer monopolies, because it makes it easier to choose(I'm that way, so I know there are other people too).


  15. " Big producers still put horsemeat in their burgers and melamine in the milk if they can get away with it."

    The point is that they can't get away with it, because everyone is watching them, and many people are eager to sue them. Remember when that lady sued McDonald's when her coffee was too hot? Stuff like that happens all the time.

    Obviously, big name brands sometimes do bad things. But they've never done something of the same magnitude as what the small-name brands get away with, such as selling a totally useless and harmful product over a period of years.


  16. Obviously, big name brands sometimes do bad things. But they've never done something of the same magnitude as what the small-name brands get away with, such as selling a totally useless and harmful product over a period of years.

    How big is Exxon-Mobil, BP, Enron and the major banks et al? Vioxx was a major brand, etc. Large brands have the power to conceal and pay lobbyists, e.g. tobacco.

    Minimum product regulation is a far better option for avoiding harmful products than blind brand trust and monopoly.

  17. Dahlia,

    Thank you for the link! Believe it or not, I've never read anything by Tom Wolfe, and now I'm definitely intrigued. The people described in that piece certainly do make me think of Mr. Pfizer Lawyer Guy.

  18. Curtis,

    When I was 3 we were on a trip to Wisconsin for Christmas and I burned myself on the leg with hot coffee. The scar is still visible today, taking up half my thigh. Did we think about suing? No way! Just yesterday my mom and I were talking about frivolous lawsuits, funny you should mention that.

    What a first memory of being alive, huh?

  19. I buy generic whenever it's on offer. Because it's cheap. I have no problem with patronizing Big Business, the small artisinal types tend to charge higher prices due to economies of scale and whatnot.

    Open source software is not always inferior. Open Office isn't great because open source is typically tailored to the needs of software developers and other kinds of atypical users whose needs aren't quite met by existing software. Linux is dominant among servers, the internet basically runs on it (and the other open-source members of L.A.M.P). For home I use windows, but when I'm developing I'd far prefer to use Linux than that or the Mac I'm required to use now (it's based on BSD Unix but the differences with standard Linux annoy me frequently). The open source stats package "R" is also supposed to be good, to the extent that some statisticians discount work that doesn't use it. Since open-source is free so often, I don't know how the users are supposed to be exploited. Any ad-ware could be removed, since it's open-source.

  20. Obviously I was talking about open-source knockoffs like Open Office, not R or Linux.

  21. FWG,
    Go get Bonfire now.

    One thing I love is how he does an "update" on the last pages of all the characters. Hilarious.

  22. "How big is Exxon-Mobil, BP, Enron and the major banks et al? Vioxx was a major brand, etc. Large brands have the power to conceal and pay lobbyists, e.g. tobacco."

    None of these brands did something of the same magnitude as what the smaller ones get away with, i.e. selling useless, harmful, or faulty products. I guess tobacco is the exception, but even then it wasn't as if they were false advertising.

    Furthermore, the fact that you mention all those high-profile disasters associated with big brands just proves my point. When a larger brand screws up, it enters and stays in the public consciousness. Their reputation is hurt, so similar mistakes are avoided in the future.

    Ranbaxy is still not a household name, and they're still selling bad drugs.


  23. Louis Western5/29/13, 11:12 PM

    " "Race realism" generally means "IQ fetishism" nowadays."

    Agreed, HBD means more than IQ, personality and behavior are largely derived from DNA. Twin studies largely confirm this. But, these behavior patterns are hard to measure and somewhat subjective, so researchers stick to IQ studies.

  24. Dahlia,

    Thanks! I really want to read "A Man in Full" as well because of the Atlanta/Georgia Tech connection. I remember my parents having the VHS version of "Bonfire of the Vanities". As a kid, I never knew what it was and never watched it. Now I want to get my hands on it again!

  25. I also agree IQ isn't everything. It overpredicts black academic performance at the university level and underpredicts asian performance. This is likely due to personality traits like conscientiousness.

  26. Have you seen any other signs that the culture is becoming more outgoing?


  27. thanks for introducing me to Steve Sailer's blog BTW.


  28. People do have this tendency to think that when something is discovered, it stays discovered.

    'We paid this scientist to discover this, we paid this engineer to draw up these plans, now we can pay an Indian or a Chinese or some other desperate firm in a far-flung place employing starving people pennies on the dollar for the same deal!' And then it turns out they'll cheat you blind as soon as they can get away with it, because apparently greed and how to respond to it is a universal language.

    At least with open-source software I can look at the names on the man pages for signs of ethnicity, and correct the program itself if I hate how it works. Chemical alteration is a considerably more involved and rare skillset.

  29. Chinese restaurants are known for their use of cheap oil which is heated too high or is reheated. It gives the food an off flavor. Even in expensive restaurants, you can get that reheated/overheated soybean oil flavor.

    My Dad goes to China regularly on business trips. So one time, he was telling me about some newspaper item which involved a vendor selling seafood which was past the sell-by date. Lots of customers were seriously sickened.


    In India, people who care about hygiene or quality just don't eat out. People get sick when they eat out. Sometimes, they don't wash plates that people use, just wipe them off with a cloth. The waiters/servers look unwashed/gross.

    If you care about hygiene, there are special caterers you can seek out who are strict about hygiene.

    In America, reheated/overheated oil is a serious problem. Sometimes, the entire restaurant reeks of that bad oil smell. Afterwards, you may have digestive issues possibly due to the bad oil. Gross looking servers.

    I think restaurants in India actually use better quality ingedients (at least with produce) than Indian restaurants in America, which always seem to use the cheapest possible.

  30. There was some case in India about sesame oil being adulterated.


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