Hilton, Choi, and Chen’s article in the Journal of Business Ethics, “The Ethics of Counterfeiting in the Fashion Industry: Quality, Credence and Profit Issues,” discusses the ethical dilemmas that persist in the fashion industry relating to counterfeiting of fashion goods. The immensity of counterfeiting is illustrated by the authors’ example that “Worldwide the International Chamber of Commerce estimates that seven percent of world trade is in counterfeit goods and that the counterfeit market is worth $350 billion” (345). They identify the possible ethical basis for analyzing fashion counterfeiting as utilitarianism, distributive justice, the Moral Rights of Man, and Ethical Relativism (348). The four types of counterfeiting discussed are vanity fakes, copies or overruns made from extra material, condoned copies, and “copies made by the fashion houses themselves” (349). Their overall assessment is that the ethical questions raised in the fashion industry are applicable to many other industries that have problems with counterfeiting, such as the computer industry.
Interestingly, the article often provided justification for counterfeiting. For example, using a Rights of Man ethical argument for vanity fakes, the authors say “the welfare of society as a whole may be increased by relaxing copyright restrictions and that counterfeiters perform a social service” by allowing people who would never be able to afford, for example, a Gucci purse to pretend to have one (349). Copies made and sold by workers at a genuine fashion house’s factory sweatshop is justified by the idea that the workers are not paid a living wage and believe they have earned the right to this extra income (350). In other cases, a fashion house itself condones copying, for example by choosing to ignore the multitude of lower-end clothing makers copying their designs, also known as “knockoffs,” which works as free advertising for the haute coutûre fashion houses and increases the value of their products.
Overall, there does not seem to be much of an argument ethically against counterfeiting except that if the counterfeiters cause too much of a decrease in profits for the original creators, the creators will have no financial means and no incentive to keep coming up with new ideas. This problem especially concerns creators like musicians, because new technology has made it easy for copies of their music to be made. However, people have also invented a “distributive justice” method for creative people to use in marketing and selling their products. The web site Kickstarter is a good example. The website allows artists to ask for funding from their fans; the artists can offer incentives such as t-shirts, signed copies of their work, or even personal visits to people who donate at various levels. The biggest donations get the biggest rewards. In this way, the artists get the support they need from their fans as well as the financial backing in order to produce a new creative product. The fashion industry may not benefit as much from such an approach, but it will be very important for new methods to be found for some other industries as the technology to counterfeit increases.
Hilton, Brian, Choi, Chong Ju, and Chen, Stephen. “The Ethics of Counterfeiting in the Fashion Industry: Quality, Credence and Profit Issues.” Journal of Business Ethics 55 (2004): 345-354). Print.