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Comment by aik | Hacker News Reader

Here's my sad Chinese sd card experience. The state of things there depresses me:

When I was in Beijing I went to a regular store to buy an SD card for my camera. I asked them to let me try the cards in my camera before purchasing, so I did that. As I put a card in, all looked well, however when I proceeded to format the card, the issues arose. Regardless of the size of the card, 2, 4, or 8gb, the card would then instead read as 128mb. I mentioned this fact to them and they said sorry and let me try a new card. About 4 cards later the owner was nearly in tears and I was very frustrated. At that point the owner went to the back stockroom and gave me yet another card. This time it formatted fine and I purchased that one.

It was such a sad experience. I felt very embarrassed and sorry for this owner. I don't know if the owner knew that they were scamming people, or if they were just being scammed themselves.

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That's really sad. Yet, it's probably mostly because all of the other stores are doing it and he/she can't compete without also selling the fake products. With no consumer protection or standards, this is what happens.

Also, maybe b/c of a market of consumers who don't know what they're buying. I bet tech-savvy Chinese know where to buy safely. But maybe there are a lot of Chinese with poorly educations or orientation to tech, maybe just arrived in a city, or travelling there to shop. And they get stuck by this stuff, and maybe don't even realize it b/c they don't understand the gear, or because so much of it is banged up. (Maybe the camera is also faked.)

It wouldn't surprise me that if a shopowner _was_ eventually caught at this, they'd simply close up and just move somewhere else.

As a free market type, I have to admit that in those circumstances, I don't find this surprising. The "market response" here is for consumers to become more savvy and cautious, but the population posited here wouldn't have resources for that response. And they're forced to choose between wariness, and participation in this new economy with all this neat stuff. And that participation might be the only path out of poverty and ignorance.

It's a crummy choice, and one that is likely to lead to all sorts of bitterness and suspicion of the merchant classes. It founds a similar ethic in the buyers, once they figure out enough to become sellers.

The likeliest defense I can imagine for my free markets is, China isn't really a free market. Its development is artificially stimulated and guided by government policies, which are pushing investments at levels that aren't sustainable, and into projects that probably won't return. A less hyper development might give consumers more opportunity to get up the learning curve, and lower (and probably more realistic) expectations of what they can afford.

Wow, tldr: Govt. accelerated hyper-growth pushes innovation faster than the least informed consumers can manage.

Wouldn't a valid free-market response be a private militia which is paid by its customers to shut down via threat of force stores which misrepresent their goods?

I think the valid free-market response is ultimately "caveat emptor". Your proposed solution violates the NAP, which most libertarians hold as axiomatic.

I don't know of any libertarians that think fraud should be legal. The doctrine of "caveat emptor" also makes an exemption for fraud.

So, to sum up, poor quality control in the absence of government regulation is the result of too much government regulation.

There are folks who want to solve every problem with government-led solutions. They are often wrong. Then there are people whose response to everything is cutting taxes and privatizing institutions. They are often wrong. What you have in common (and lately I am beginning to think these two groups have a lot in common) is whenever anyone can name an example of your ideology breaking down in some way as it has here, your immediately come out with a No-True-Scotsman style of rebuke. Why is it so unacceptable that a pure free market might not work perfectly?

And, the typical consumer anywhere would fall for this. This isn't an example of ignorant Chinese being duped by unscrupulous merchants. If ignorance alone is the culprit then this should be happening everywhere. Want to take a guess why it isn't?

Yes. How many software bugs are traceable to lousy global design? No one here would be surprised that a system built on lousy principles exhibits many particular problems. Why is it surprising that an economy built on bad principles has all sorts of particular problems?

And if anyone here suggested that the best response to a badly designed system was some additional "bug catching" layer, or just tweaking all the details, well, it wouldn't go over well. Patches might do just to keep things running, but none would suggest that's the right way to build the thing in the first place. And the patching approach would be doubly suspicious if the same crummy programmers that had the bad design where then tasked with patching up the bugs.

And no, this won't happen here in the US. If you think the average US consumer is as ignorant as the average Chinese, you aren't thinking it through. Go look at what passes for a college degree in China, the government has massively expanded the "colleges" past all capacity to actually teach that many people. And the average US consumer has far better access to enough expertise to diagnose the problem. And US retailers make major investments in brand reputation, which they will not simply abandon. US consumers have far better resources for understanding fraud, and far better recourse against it.

Now, my "ideology" is founded in a lot of solid theory and hard evidence. It is a world view that explains a _lot_, and often in advance of events. If you think I'm walking from all that b/c of one unfortunate example, if you think I'm not going to look for some explanation that is consistent with what I already know, I don't know what to say. Here I admit that this cheating is what I expect in these circumstances -- not really a free market advertisement -- and admit that I'm looking for some consistent explanation. And you have a problem with that? My biases are right here on my sleeve, where I can keep an eye on 'em. Where are yours?

With no consumer protection or standards, this is what happens.

Not always, some times a wild market eventually results in some of the strictest standards which also happen to be self enforced.

I say sometimes but some economists believe, in the long term, this will always happen. I think reality is a bit more complicated, and in the very long term we're all dead. So for the duration of any one human life time, amazing self enforced standards sometimes arise form chaos. Those send to be far superior to anything government can do. But government is often quicker to come up with enforced standards.

> some times a wild market eventually results in some of the strictest standards which also happen to be self enforced.

I've seen that in works of fiction, where it seems to function pretty well.

I have yet to come up with any real-life example that stands up to scrutiny.

Somewhat related:

Apparently laundry detergent manufacturers kept on increasing the size of their standard detergent bottle without increasing the washing power in order to make it look more impressive on a shelf. This caused an "arms" race in detergents.

WalMart stepped in and refused to stock detergent bottles past a certain size. At that point, the manufacturers stopped making the large size bottles.

If there's a player with as much power as WalMart then they can dictate pretty much whatever they want - and sometimes their interests are aligned with the customer.

When I was growing up in Taiwan, there was a private consumer-protection agency that actually seemed to work. It all came about after a rash of food poisonings, and a private organization came up with a certification stamp, and somehow (I'm not sure how) convinced most consumers to look for and demand the stamp on packages.

All in all, not at all unlike how government protection agencies work, but in this case entirely private and independent. The neat part is that, IIRC, their safety standards were mostly stricter than the US.

Probably the exception to the rule though.

I believe Underwriters Laboratories and the Insurance Institute for Highway Safety would be US examples of similar private agencies.

Funny, I haven't thought about UL since I was a kid. Do many consumers look for a UL stamp, or is it used more for legal defense if the device actually does malfunction?

The American Dental Association is another example. I do look for ADA-approved toothpastes.

I believe it ends up getting enforced at the retailer level; most major chains will refuse to purchase Christmas lights that are not UL listed, so you can be reasonably sure that the cheaply manufactured lights you purchase at Walmart don't burn your house down. They also seem to be providing education [1] and revising their standards [2] to discourage particularly ill-advised appliances such as electric turkey fryers.

[1]: http://www.ul.com/global/eng/pages/offerings/perspectives/co... [2]: http://ulstandardsinfonet.ul.com/scopes/1083.html

Real-life example: The EU allows vegetable oil (instead of cocoa butter) in chocolate. In Germany, nearly all chocolates still contain no vegetable oil.

This is interesting, and it makes sense to me that markets would work this way, but I am not sure I can think of any real examples. Something like Bar Associations comes close, but AFAIK they are legally mandated? Do you have any better recent or historical examples in mind?

How about the standard of putting the name of the product on the outside of the packaging?

How about the gold standard?

Also- http://en.wikipedia.org/wiki/Open_standard#Examples_of_open_...

http://media.mises.org/mp3/interviews/murphy1.mp3

The best example I could find is about non-profits: http://nvs.sagepub.com/content/39/6/1057.abstract

But I think the same principles would apply to for-profits. The only other examples I have are anecdotal.

non-profits ==> competition is not exactly red in tooth and claw ==> not a real "market"

> The only other examples I have are anecdotal.

Agreed.

non-profits ==> competition is not exactly red in tooth and claw

Are you serious? Competition for donations between non-profits in my experience is often even more extreme then between for-profits. Do you have any evidence for softer competition among non-profits?

Besides some non-profits are really phenomenally well functioning for-profits, which happen to have chosen a non-profit tax status.

For example, in the US the non-profit AAA will quickly drop any pick-up truck company known not up to its standards. Mind you, all that's needed if for the truck to show up roughly on time and be reasonably courteous. Still that is quite something when you're in a bad spot and need those kind of services.

And the AAA is popular enough that being on their shit list will cause sever financial pain to any pick-up truck services provider.

But to join the AAA you have to pay a regular fee and they have all kinds of tie-ins with piles and piles of 3rd party service and goods providers.

I don't begrudge them their non-profit tax status, but they are a damn well run and huge business.

Idealism aside, do you have real-life examples of such "emergent standards" that are pertinent to this discussion?

Various textile industry associations have labeling standards and trademarks for materials, like Supima®, Seal Of Cotton, Woolmark, etc. These actually give some useful assurance of the quality or type of fiber, and they are private standards rather than government ones.

Nice try, but it doesn't get to my point. How are these "emergent standards"?

Are you arguing that the trademarks are standards? They are completely owned by the company and follow no rule other than arbitrary decisions by one entity (Nintendo could sell Mario toilet paper tomorrow and it would be a Mario(r) product).

Well, like I said, typically they are owned by not by individual companies but by industry associations or coalitions. These consist of member companies which individually compete with each other, but have worked together to define a standard and market it to consumers. For example, Supima is a non-profit organization run by a coalition of cotton growers, which licenses its trademarks to textile manufacturers.

It's a fair point that there is a private entity that owns the trademark and can technically do whatever it wants with it. It doesn't just magically "emerge" from the market without any coordination - but then, nothing does. Market actors come up with mechanisms to communicate standards. Some of these mechanisms happen to be voluntary and reputation-based rather than enforced by law.

I would say the owner was also being scammed, otherwise you wouldn't have been allowed to try the card before buying it, or at least a working card would have come out after the first try failed...

Yeah, though I doubt very many people format the card when trying it (the size did look correct beforehand). Though, he did let me try several cards so maybe you're right.

He was also selling (very clearly to me anyway) fake iPod Nano devices. Did he know those were fake? Maybe he's never seen real ones? To me the whole thing looked so cheaply made and the UI is incredibly ugly.

I once had an experience where i was sold a fake piece of equipment.I proceeded to ask for warranty but the store owner told me they don't give warranties for such type of products.So i insisted for a warranty.Surprisingly he pulled out the original and authentic version and wrote me a warranty.apparently they seem to know that some are genuine and some are counterfeit.

+1 to the try-before-you-buy mentality. Will keep this in mind.

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