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Economic StupidityMost people do not have a clue what the true meaning of "black market" is. Almost all people in the world associate black market with criminality. They are right in the sense that in almost all countries in the world, black markets are illegal… albeit not illegitimate. No, it is not a semantics issue; it is an economic issue.

It would seem than in the Sultanate of Oman they are having a difficult time with fake goods. According to the newspaper The Times Of Oman, the amount of fake goods have raised about 2000% over the last year; or so their article "Oman markets register more than 2,000 per cent increase in fake products" declares.

Yet, the article gets right one thing "and the high cost of original commodities that many cannot afford to buy are the main reasons for increase in fake commodities".

This is correct; however incomplete. The complete analysis would go something like this. Brand name manufacturers want to protect their monopolies. In order to do so, they need a legal way to accomplish that. They can do so by "registering" and "copyrighting" their "works". Thanks to a clearly idiotic and irrational set of Intellectual Property Rights (IPR) legislation that plagues the world (see Knocking Down Intellectual Property Rights) this is indeed what they do.

This has two effects. The first one is that most people cannot afford said goods and services, hence creating a huge market. The second one is that a large amount of population has their needs unsatisfied which is equivalent to say that their standards of living just dropped.

And all for what? Where are the socialists and communist screaming bloody murder when they are needed? How come that world revolution is OK, but helping the little guy is not?

Not to worry, we are here.

But these are not the worse effects. There is more. To begin with, campaigns are and will continue to be launched to "fight" this "crime". This "fight" will, of course, be paid by the government (i.e. the Omanian taxpayers). And for what? To protect brand name invalid profits. To protect brand name artificial monopolies.

On top of that, Omanian taxpayers are and will continue to pay for the actions of the Public Authority for Consumer Protection and all their bureaucrats and agents… from their taxes.

In addition, said organization will confiscate (i.e. rob) so-called counterfeit commodities from, again, legitimate (albeit illegal) vendors. So, more private property will be destroyed.

In summary, to protect illegitimate IPR's which ensure artificial monopolies (and massive profits) for brand names, people need to pay with their taxes. This is the very same people that cannot afford to pay for the goods and services that those brand name manufacturers produce!

How perverse is this?

People cannot afford certain products and at the same time they are being robbed through taxation to protect the profits of manufacturers of said products!

The situation is so bad that "something has to be done". According to the article, "tighter controls" will be put in place. Great! Now not only will people need to pay taxes to protect other people's profits, but these taxes are going up!

This is classical government action. Enforce political laws instead of economic common sense. And why not? Everybody knows that money is printed in Central Banks and inflation and economic booms and busts are a myth.

Apparently, these leaders of civic duty, the agents and speakers for the PACP have commented that almost every commodity can be found in fake versions, due to the huge demand. This would include "electronic devices, clothes, accessories, perfumes, glasses, watches, car parts, books, and even medicines, which is dangerous".

Let's think this through. Most "electronic devices, clothes, accessories, perfumes, glasses, watches and books" are not dangerous. Claiming that they are is a really large stretch of the imagination, unless they mean dangerous to Omanian pockets. Even this latter assertion is not at all clear due to the deep discounted prices at which they are sold.

Then we have the "car parts and even medicines" which are sometime damaged and consumers suffer "injuries and even death" due to accidents.

The notion that critical fake car parts may be dangerous is a very distinct possibility. Take for example breaks. If they fail at the critical moment, there could be an accident. However, at the end of the day is up to the consumer to decide if it is worth taking the risk. In addition, most fake car parts are not critical. Why should a consumer pay ridiculous prices for a "genuine" mirror or an "authentic" air filter if the performance of both products is quite similar? Of course there is no reason, other than to protect the pockets of those owing artificial monopolies.

And how about "fake" medicines? Well, considering that the price of pharmaceutical products has skyrocketed beyond ludicrous levels mostly due to government regulation, including hyper-restrictive patents (again IPRs) who is to blame? If there would not be any government, most pharmaceutical medications would indeed be affordable!

All these issues, once analyzed, fall back to the origin of the problem, and the problem are IPR's. And who created, supported and enforces IPR's? The government.

Therefore, at the end of the day, it is the government itself that created the conditions for "fake" products to appear. The black market is simply responding by solving the problems that the government created. The black market is actually rescuing the government.

The shop owners got it right; they say that "shoppers justified their need to buy such [black market] items since original items cost far too much because of monopoly trade practices."

Thankfully enough, people are realizing the scam as "some shoppers considered counterfeit goods as a solution to counter the monopoly of original commodities that are very costly" but there are many others that still remain completely brainwashed "others stressed the importance of increasing inspections to combat commercial fraud and counterfeiting".


When we create more theory-oriented articles (such as the ones dealing with IPR's), it is not because we enjoy boring you to death with meaningless topics or academic subjects. It is because these topics matter. These topics are universal and affect everybody including the people in Oman. Usually you do not consider yourself a brother or sister of people's in far away and exotic places; however, in fact you very much are. The brotherhood or sisterhood to which you and them belong to, is the family of those affected by politicians and their fake policies (economic and otherwise). There is nothing "fake" in a black market; it is a real free market. As such, certain rules apply; namely "caveat emptor". However, beyond that, benefits are plentiful. We do not support black markets because they are illegal or because of some sort of civil disobedience; we support them because they work in providing what people want. They are effective and efficient markets which try to resolve all the issues that governments create. In a very real sense, black markets always come to the rescue!

You can always make a decision. You can side with the governments and their limitation or with free markets and their solution. It's your free choice.

Note: please see the Glossary if you are unfamiliar with certain words.


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