Sunday, April 21, 2019

System D: 2.5 Billion People Can't Be Wrong

"Authored by Mark Nestmann via InternationalMan.com,

Nearly two billion people work in it. And it accounts for perhaps 20% of the world’s total economic activity.

“It” is the black market, or System D, a slang phrase adapted from the French word débrouillard. A débrouillard is a resourceful and self-reliant person. A débrouillard figures out how to get what they need regardless of the obstacles. The obstacles are usually the laws or price controls put in place by the state.

There are a lot of débrouillards in the world. In 2009, the Organization for Economic Co-operation and Development (OECD), estimated that around 1.8 billion people – at the time, half the world’s working age people — had unofficial jobs that weren’t registered, regulated, or (in many cases) taxed. The OECD estimated that by 2020, two-thirds of the world’s workforce would be part of System D.

The OECD considers anyone between the ages of 15 and 64 to be “working age.” As of mid-2018, about 65% of the world’s 7.7 billion people were working age; that’s about 5 billion people. If half of them rely on System D to support themselves and their families, that comes to 2.5 billion people.

Most of these 2.5 billion people are débrouillards by circumstance rather than choice. They live in countries like Venezuela, Zimbabwe, or Nigeria where the only way to buy the goods and services they need is by breaking the law. Venezuela is a great example. Consumer basics like food and medicine are no longer available in stores or pharmacies. The only way to get them is through System D.

A 2012 study concluded that collectively, the black market accounts for more than one-fifth of global GDP. Today’s global GDP comes to about $80 trillion. System D, then, adds another $16 trillion of economic activity to the global economy. If the black market were a country, it would have the world’s second largest GDP, second only to the US ($19.3 trillion)..."

at https://www.zerohedge.com/news/2019-04-19/system-d-25-billion-people-cant-be-wrong

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