Question

Get the Articles from NY Times or Wall street journal or the economist (published with in last 5 year )

1. what is counterfeiting .

2. 1 page critique

3. link included or the article attached

Answer 1

Counterfeiting

It is the process to duplicate something which is authentic, with the intent to replace the original or use it for some illegal transactions. By doing so the consumers are tricked into believing that the fake is equal or more in value than the original there by inducing them to buy the fake than the original one. This is done so by knowing the superior value of the imitated product that is to say that the product which is copied hold some high standards in the economy hence its cheaper duplicates are produced. Some commonly duplicated or imitated products are - currencies, medicines, shoes and clothes apart from other luxury items such as watches and electronics.

Many economic and the world trade organizations including the International Chamber of Commerce have criticized this process. They have mentioned several ways in which hurts the society, as listed below:

1) Less Money for Infrastructure - each government comes with several tax systems which are levied on the companies producing the products and then while selling them in the market. The tax hence collected from these sources are often used to build upon the infrastructure of the nation. Now since the duplicated products are being sold in the market there will be no tax collected form these sellers. Since these counterfeit products are sold in a black market - not known to the government, there is no scope of collecting sales tax or production tax from them. Eventually the government loses out on its revenue which would have been used for building roads and schools in the country.

2) Greater Crime - since the counterfeiting activity in itself is something which is termed as illegal, the money generated from this will also be illegal and cannot be claimed to white money. Thus forcing these criminals to use such money for further criminal activities. This all results in increasing the crime rate in the country when people are not able to convert the money earned from illegal means into white money.

3) Health Risks -  it is a well known fact that most common counterfeited products are the medicines that are made in the market. These producers use low standards of chemicals for preparing the imitated versions of medicines which do not even go through the proper testing and approval process before they are launched in the market. Hence, the repercussions are seen on the consumers taking these and affecting their health.

4) Economic Activity Depreciates - every market promotes healthy competition for its country to progress with the demand and supply rules playing their functions properly in the market. But with the presence of imitators in the market it has become impossible for a business to survive as the products they sell are already available in the market at a much cheaper rate thus not allowing real competition to happen. This in turn it affects the overall economic growth of the country and witnesses a downward movement.

5) No Investment and Innovation - with a downfall in the economy, the investors are not ready to invest their money and talent in these market where the prevalence is of the fake products. The investors lose their interests when they get to know that the money they want to spend on building the innovation process in a company has already been copied and have been selling in the market. These days since the Intellectual Property have also come in the ambit of counterfeiting, investors have less incentive to invest in such countries where idea are also stolen.