Shortchanging vs Counterfeiting: Which is the Bigger Problem?

I went to my local coffee shop this morning, ordered a double cappuccino, and was shocked to find myself shortchanged. Don't shrug, this is serious. In fact, shortchanging at local coffee shops costs Americans $331 billion – yes, billion with a b – per year. Have you any idea how huge that number is? If you add up all the various kinds of property crimes in this country, everything from theft, to fraud, to burglary, bank-robbing, all of it, it costs the country $16 billion per year. The problem of shortchanging in coffee shops is twenty times larger, and the amount of law-enforcement resources devoted to it reflects a staggering misalignment of priorities.

Of course, you have every reason not to take my word on this. After all, the $331 billion figure seems a little... shall we say exaggerated. You might well ask where I got that number from, considering that it's sixteen times the market capitalization of Starbucks. And if I didn't tell you, you'd probably dismiss it as bullshit.

Yet when exactly the same rhetoric comes from Dan Glickman, the head of the MPAA, nobody seems to blink. Or nobody in Washington or the press, anyway. Read the comments over at the Consumerist, and you'll see what a more representative sample of the public thinks – let's just say that Mr Glickman doesn't get a lot of respect.

Of course, Mr Glickman isn't about to tell us where his numbers come from. Instead, he'll point us to TheTrueCosts.org, which is basically just a website devoted to parroting ever-more-ludicrous numbers. My favorite: "According to the U.S. Department of Commerce, the U.S. auto industry could hire 200,000 additional workers if the sale of counterfeit auto parts was eliminated." I am quite sure that the Department of Commerce has run no such study. Rather, the Department of Commerce are two hands washing each other, each citing the other, with no solid basis for their statistics at all.

And then – you really can't make this stuff up – there's the video. It's so poorly produced it can't even get the axes on its chart right, even though that's the still from the video which makes it to the "Get the Facts" page. I've put a screenshot below: that's fair use, m'lud. And the rhetoric is hilariously overblown: "In the last month, it's almost guaranteed you unknowingly bought a counterfeit," we're told, before a seamless segue into a parade of "criminal networks abroad, organized criminals, and even terrorists" who "have infiltrated supply chains". Truly, it's the Reefer Madness of the 21st Century.

If the argument from anecdote was actually strong, then they wouldn't need the bogus statistics to back them up. But it's worth noting that, in recent headlines, counterfeit toothpaste seems perfectly safe, while genuine dogfood turned out to be fatally flawed.

Naturally, the lack of large-scale disbelief when anti-counterfeiting forces spin stuff like this means that they never feel compelled to justify their bogus statistics. But for the record, if anybody wants to give it a go, I'm happy to give them as much space as they need on this blog. Anybody? Anybody? Bueller?