Why Black Market Entrepreneurs Matter to the World Economy

In his book, “Stealth of Nations: The Global Rise of the Informal Economy,” Neuwirth points out that small, illegal, off-the-books businesses collectively account for trillions of dollars in commerce and employ fully half the world’s workers. Further, he says, these enterprises are critical sources of entrepreneurialism, innovation, and self-reliance. And the globe’s gray and black markets have grown during the international recession, adding jobs, increasing sales, and improving the lives of hundreds of millions. It’s time, Neuwirth says, for the developed world to wake up to what those who are working in the shadows of globalization have to offer.

Imports Create Jobs and Trade Deficits Don’t Matter

It is no good objection to reply that America’s current-account (or “trade”) deficit means that foreigners don’t buy from us as much as we buy from foreigners. First, the investments in America made by foreigners (and that increase the U.S. trade deficit) also typically involve demand for U.S. inputs, including workers. When, for example, Ikea builds a store in Dale City, Virginia, American workers and other input suppliers are employed in that project.

Legalization Works

Libertarians, though that term encompasses a very large range of ideas these days, seem to agree on one basic principle; do what you want as long as it does not affect me. That is why one of the core principles of Libertarian ideology is that individuals have the freedom to do what they want with their own bodies. Be it the intake of drugs, or a half hour on a mattress in the red light district, consenting adults should be able to do as they please.

Inequality and Risk

I don’t think many people realize there is a connection between economic inequality and risk. I didn’t fully grasp it till recently. I’d known for years of course that if one didn’t score in a startup, the other alternative was to get a cozy, tenured research job. But I didn’t understand the equation governing my behavior. Likewise, it’s obvious empirically that a country that doesn’t let people get rich is headed for disaster, whether it’s Diocletian’s Rome or Harold Wilson’s Britain. But I did not till recently understand the role risk played.

The Profound Value of Market Values

Even though economists, like others, don’t know the objective value of anything, they do know that as long as people voluntarily enter market arrangements, all parties to each transaction expect that the subjective value they will receive as benefits will exceed the subjective value they bear as costs. Greater subjective values for all is the result. And any coercive intrusion that forcibly moves the quantity exchanged away from what individuals would voluntarily choose destroys joint gains to participants, making the “solutions” offered by economists’ Wilde-eyed critics worse than the supposed problems used to justify them.

The Law According to the Somalis

Many voluntaryists have looked longingly toward Somalia for evidence of our ideas in practice. But it’s a little tough when that real-world example also happens to be the quintessential image of extreme poverty and feuding warlords for most people. Nonetheless, sometimes an article appears that rightly points out that comparing Somalia to developed nations is a little intellectually dishonest. In fact, Somalia has improved by virtually every measure of standard of living without a state, or when compared to its neighbors that still have a state.

Entrepreneurship is the Best Defense Against Hierarchy

Self-sufficiency often brings to mind recluses living in the woods, raising their own food, and building their own shelter. This doesn’t have to be the case though. Anybody who has the means of creating enough wealth to trade for their wants and needs is self-sufficient. You don’t need to raise your own food so long as you can trade with somebody who has a surplus of food and is willing to trade it with you. As an entrepreneur you cannot be fired by a boss and you’re not reliant on a state to protect you from an egregious employer.