Kai Strittmatter wrote ‘Gebrauchsanweisung für China’ which means User guide for China in German (2004/2008). Especially the chapter “假 Jia, Alles gefälscht. Oder: Die Schwindlerrepublik” (pp 175-186) is an interesting chapter about all aspects of “the People’s Republic of Cheats”, which is explanation the Far Eastern Economic Review (a high quality magazine that no longer exists) came up with for the abbreviation of PRC as Strittmatter makes clear.
It includes the following anecdote which I paraphrase here:
A farmer who bought from his last money some seeds. But how long he waited no plant would grow. The seeds were fake. The farmer did not want to live any longer and committed suicide by drinking rat poison. But nothing happened, the rat poison was fake. The whole family of the farmer was very happy and they opened a bottle of good rice wine. The farmer went down, because he fell victim to the lethal fake rice wine.
Impressive paragraph you quoted there about the farmer. It's been sitting in the back of my head for a long time, to literally condensate all paradox and all these vicious circles in fake goods but I think that what you posted sums it up.