STEALTH OF NATIONS: The Global Rise of the Informal Economy
The $10-trillion “informal economy” of the title would rank second only to the United States were it captured within the construct of a formal economic body. A single São Paolo street market, featuring 6,500 unlicensed merchants selling wares legal and illegal, does nearly $10 billion in trade a year. Were it incorporated as a business, it would be one of Brazil’s five largest.
This underground market employs 1.8 billion worldwide, according to the OECD, which expects two-thirds of the world’s workers to be employed in it by 2020. And it’s hard to flatly condemn it when it’s not only growing but has been “revealed to be a financial coping mechanism”; the European countries with the largest informal economies came out of the 2008 financial crisis better than did their more centrally planned peers. Much of investigative journalist Neuwirth’s book takes the form of a travelogue, mapping the back channels of this trade, from auto-parts markets in Nigeria to counterfeit-watch vendors in Guangzhou, China. Colourful always, inspiring sometimes; but the great tension is how to reconcile the formal and informal economies, if at all. To this, Neuwirth suggests a form of trade liberalization more radical than most so-called free traders will be willing to swallow.