Sketchy sales prove useful
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The words black market are associated with shady and illegal practices. One image that comes to mind is the stereotypical man selling watches from his trench coat.
The black market has a reputation of being unsafe and unproductive. Many do not realize the scope of the shadow economy.
The pharmaceutical sector of the U.S. is valued around $252 billion while the illegal drug trade is around $215 billion.
What is more surprising is that the illegal drug trade in the U.S. is worth $89 billion, more than the fast food industry in America.
Globally the black market is massive. It has an estimated worth of $10 trillion.
The shadow economy encompasses a whole slew of business practices.
These ventures range from violent enterprises like drug trafficking and prostitution to unlicensed selling of goods like working as a street vendor.
One reason for the sheer size of the shadow economy is because of the large quantity of workers employed under the system, which is 1.8 billion people.
The widespread nature of the phenomenon has allowed for a good deal of international trade, which in turn has also contributed to the rapid growth of the underground economy.
Much of the business that makes up the shadow economy is in the developing world.
Illegitimate businesses in these countries are often able to circumvent their inefficient and often corrupt governments by dodging import regulations and taxes.
In essence, they practice an extreme form of free trade.
One of the largest suppliers in the international shadow economy is China.
Sellers provide many different forms of electronics and machinery under the radar and off the books to African countries like Nigeria.
While this is illegal because it violates international trade laws, it has actually benefited workers in countries like Nigeria.
Companies in developing countries often do not have the budget to buy legal software and operating systems for their computers and have been known to pirate the software they need.
There have always been those who have disregarded the rules and benefited.
With the staggering number of those involved in the shadow and its success brings to question how flawed the shadow economy actually is.
Prostitution and drug trafficking are illegal and have very negative consequences.
Copyright infringement and breaking international trade laws are also illegal, but they can have positive consequences.
For those in the developing world where the odds are stacked against them it would seem that participating in the shadow economy is their only option for economic success.
The underground economy has had better success at uplifting the economic level of developing countries than all the international aid and work programs.
Aid programs only offer relief and a handout.
The shadow economy is much more dynamic and allows entrepreneurs to get a leg up and continues to promote growth.
Instead of being fed by someone, they are learning to feed themselves at no real cost to anyone else.
Regardless of how much companies complain about copyright infringement it has brought many countries forward.
The black market is not really a black and white issue.
The devious parts of it should be avoided at all costs, and the beneficial aspects ought to be considered by legitimate economies.