A chief crafter of the econo-legal school of Ronald Coase is one Stephen N S Cheung. Both Coase and Stiglitz cited Cheung in their Nobel Prize acceptance speeches.
Cheung is another one of that crop of Hong Kong born adepts who rose through the ranks on merit, crowning his achievements with a phd from UCLA. There is a federal warrant for his arrest in the USA, or anywhere in the world where he can be nabbed, for failure to appear.
But there is also one for Marc Rich, another fellow who worked against state policy and benefitted the American economy to no end.
Not only is Cheung a brilliant economist, he also made money in business, something not seen since Thales. He had two gigs that I know about, one an "antique" store and another was the serially launching of restaurants that he would then flip for a tidy profit. The federal warrant is on a tax-evasion question, but he is notorious for the antique store, called Thesaurus, although as part of a settlement he was dropped from any suits.
Now, for one whose second language (perhaps fourth or fifth, I don't know) is English to name a store selling fake antiques "Thesaurus" is to demonstrate a wickedly funny command of the English language.
A year or two before the "fraud" was exposed, I had wandered into the store and was delighted to see very good copies of ancient art selling for $30,000, such as a Tang tricolor horse. Since I tend to find the best sources in the world, I had the same thing in my house, but I paid about $75.00, retail. I asked the clerk, a kind woman, how come the price was $30,000 when I can get them for $75.00. She earnestly assured me they were antiques. I believe she believed it.
One of my favorite lines to hear as a buyer is "one of a kind - how many do you want?"
I want to pause and note an interesting phenomena. Grass is slang for marijuana. Selling marijuana is illegal in USA. Some people offer "grass for sale" meaning marijuana. If the police catch someone selling marijuana, regardless of what they call it, the police will make an arrest. It has happened that a person has offered grass for sale, and the police make an arrest, only to find it is in fact grass, that is, lawn trimmings. The fellow offering "grass" was perpetrating a fraud on stoners. It can be risky business, but the courts have ruled that selling grass, at any price, no matter the implications, is not illegal. But note, the activity on the part of the wise guy selling "grass" as marijuana to stoners is clearly intentional fraud. Cops and courts don't care. Keep that in mind.
The antique thing is so confusing at times. The Code of Federal Regulations requires new armoires built from old wood be identified as antiques for Customs declaration purposes. And then, they are duty free, since they are antiques. Well, no one would call such a thing an antique, but such a designation requires that the Chinese Antiquities Export Bureaus stamp documents and affix their wax seal on new furniture of old wood to be exported from China and imported into USA. I have a Mongol armoire, of my design, so marked up, in my living room. Whole lotta antique importing going on.
When I was importing rugs, the Chinese wove some new rugs thin and of old designs and washed them in tea, and called them "imitation antique" rugs. Just so. And I saw some gwailo retailers selling the same for $10,000 when $1500 was a fair price. Don't blame the Chinese, they marked the rugs proper.
I was in Gump's admiring another Tang horse copy, and the clerk earnestly assured me it was an antique. In this case, it was the fair price of $75.00, as is my experience at Gump's where everything is fairly priced. So there was no financial "fraud" going on, just a clerk who was somewhat uninformed. I merely pointed out that an antique going for $75.00 was unlikely, plus China was not allowing real antiques out of the country. I left it at that, assuming he would seek clarification from a buyer eventually, and be fully schooled.
But back to Stephen N S Cheung. As I understand it, the fellow is obliged to remain in China, as Marc Rich is in Switzerland, for fear the US Feds will nab him from some compliant country. For what? Some dispute over taxes? At 76 years old, I can imagine he has better things to do with his time than fight the Feds.
But to me where he is most interesting is in his experiments in retail fraud. I mention in a free market that excess wealth is very unlikely, what with competition and no support for usury. It is possible to become a billionaire legitimately at the small biz level, as Ty Warner did selling BeanyBabies, but then one has the problem of keeping it. Gandhi recommended the "one-generation industrialist," that is one who is so talented ought to give it all away, rather than burden his bewildered children. (Our laws on charitable organizations permit the impression that "it is all given away" when in fact it is kept in the family: Rockefeller Foundation.)
The free market will redistribute excess individual wealth soon enough anyway. Right now we have 5th & 4th party taxpayers mulcted to support a vast army of 3rd party "law enforcement" to involve themselves in disputes between 2nd and 1st parties, such as an aggrieved Microsoft millionaire who got taken for $30k while trying to acquire an antique at a retail store. Why not let that 5th and 4th, who are now obliged to pay for the 3rd parties, decide for themselves if they care? I suspect they would not. By paying $30,000 for a $75 dollar horse figurine, the excess wealth of the Microsoft centimillionaire is being distributed far and wide as he pursues imagined entitlements (I should own Chinese antiquities). It seems to me that $30,000 is about the right price to learn that Chinese antiquities, indeed all antiquities are most valuable in situ, so they can be related to all of the other finds in situ. Once removed, fantastic knowledge disappears. Sure, buy a good copy, but incalculable harm is done when the real thing is carried of to grace the coffee table of some millionaire.
Let me argue Cheung was teaching the world about the harm done by the antiquities trade, as he was redistributing wealth. Talk about multitasking! Now my opinion matters only as far as my pocketbook, but the opinions of all pocketbooks collectively would be condign punishment for Cheung, even if it came to be no one cared about the Microsoft centimillionaire's plight. It would be about as controversial as someone selling lawn trimmings to stoners. If upon revelation of his selling fake antiques, far and wide in Seattle people proclaimed "All hail Stephen N S Cheung!" so be it.
Under a free market there is also the very real possibility the Mr. Cheung would find himself so shunned by the rest of us he could only find relief through settlement with his aggrieved customers. This is along the lines of the law of Moses, familiar today in Sharia law.
Sure is cheaper than the crazy system we have now.
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