I will make all kinds of exagerated claims: it cures impotence, it cures cancer, etc.
I don’t want to get sued, so I say “if you’re not satisfied with this product, you will get your money back”.
Even though it doesn’t work, at most 30% of the customers will go through the pains of actually asking for their money back. They can’t sue me, because they have a solution in case it “doesn’t work in their case” - all they have to do is ask for a refund.
Eventually, the market might get flooded with such products rendering the buyer incapable of knowing reliably which products work and which don’t.
Is there any solution under Anarchism to this problem?
If there was consumer demand for assistance in the decision making process pre-purchase, then agencies and ratings groups would be in demand to provide qualified, consistent, informed opinions.
Obviously, snake oil salesmen don’t plan on long term business, they want to get a quick buck and run away before the angry mob catches them. But this happens in a state, too, and not just with outright charlatans. How many times FDA approved some drug that turned out to be dangerous and was pulled off (or, worse, not pulled off)? At least free market will be more successful dealing with this.
also consider that people that believe the myth that a benevolent government looks after them, will protect them from harm, will test all the products that might be sold them, etc.etc. are going to be more gullible than people who dont believe in such a myth.
This is a fairly easy problem because this situation is already around today. What would happen is that a few reliable firms in each product market would establish themselves as ‘legit’, and rise to the top, forcing the others to increase their quality or go out of business. Look at it this way: Why do people by Apple Computers? It is not only because they like the look, color, style etc. but it is because they trust the name. This same situation would be the same under anarcho-capitalism: consumers would buy products from the company that has been tested and they know they can trust the brand.
That’s why the guys who sell snake oil like to pretend like no one is offering what they’re offering - their product is either “unique” or “complementary”.
Just because there’s no FDA doesn’t mean people won’t get their food/medicine certified as safe. It just means there won’t be government monopoly doing it. (Edit: I just realized Liberty Student made this point at the beginning of this thread but it looks like it was never addressed.)
The question ought never to be whether a free-market anarchy would eliminate a given problem, but rather whether a solution could be provided in such a condition, which would be better than that offered by the state.
With that said, I would suggest a comparison betwen Underwriters’ Laboratories and the FDA to see which, the market or the state, does a better job of informing consumers about the quality of the products they certify.