The Shadow Superpower: "System D" and the $10 trillion global black market

What is the world's fastest-growing economy? if you said "China" you'd be wrong...it's the global black market. Currently valued at $10 trillion, it is projected to account for an eye-popping two-thirds of all employment on planet earth by the end of the decade. It's an issue that stretches beyond economics to impact political systems, the nature of money and power, and even what it means to have laws and society.

What is a "black market"? For our purposes, it comprises any sort of unofficial, unregulated, untaxed commerce -- from international arms smuggling and other contraband trade to vendors at flea markets to the guy who squeegees windshields for spare change to even "real" business deals involving large orders of goods that take place off the books for one reason or another.

This is a site of black market activity:

[atsimg]http://files.abovetopsecret.com/images/member/988c198e9ed0.jpg[/atsimg]

...and technically, so is this:

[atsimg]http://files.abovetopsecret.com/images/member/fa27b479f559.jpeg[/atsimg]

A recent article in Forign Policy Magazine explores the global black market economy, using the less-loaded term "System D" for the emerging regime of unregulated trade (from a French term for a system of motivated yet often-not-technically-legitimate "entrepreneurs"). According to the article:

...In many countries -- particularly in the developing world -- System D is growing faster than any other part of the economy, and it is an increasing force in world trade. But even in developed countries, after the financial crisis of 2008-09, System D was revealed to be an important financial coping mechanism. A 2009 study by Deutsche Bank, the huge German commercial lender, suggested that people in the European countries with the largest portions of their economies that were unlicensed and unregulated -- in other words, citizens of the countries with the most robust System D -- fared better in the economic meltdown of 2008 than folks living in centrally planned and tightly regulated nations. Studies of countries throughout Latin America have shown that desperate people turned to System D to survive during the most recent financial crisis.

This spontaneous system, ruled by the spirit of organized improvisation, will be crucial for the development of cities in the 21st century. The 20th-century norm -- the factory worker who nests at the same firm for his or her entire productive life -- has become an endangered species....So what kind of jobs will predominate? Part-time work, a variety of self-employment schemes, consulting, moonlighting, income patching. By 2020, the OECD projects, two-thirds of the workers of the world will be employed in System D. There's no multinational, no Daddy Warbucks or Bill Gates, no government that can rival that level of job creation. Given its size, it makes no sense to talk of development, growth, sustainability, or globalization without reckoning with System D.

....System D looks a lot like the future of the global economy. All over the world -- from San Francisco to São Paulo, from New York City to Lagos -- people engaged in street selling and other forms of unlicensed trade told me that they could never have established their businesses in the legal economy. "I'm totally off the grid," one unlicensed jewelry designer told me. "It was never an option to do it any other way. It never even crossed my mind. It was financially absolutely impossible."

The article notes: "The growth of System D presents a series of challenges to the norms of economics, business, and governance -- for it has traditionally existed outside the framework of trade agreements, labor laws, copyright protections, product safety regulations, antipollution legislation, and a host of other political, social, and environmental policies." But it also states some positive effects: It brings opportunity to many who would be otherwise shut out of productive participation in the economy, for example. Some of the article's justifications ring a little hollow to me, though.

Whether the government breaks down completely in a SHTF scenario, endures a slow decline, or goes into some kind of full-blown totalitarian mode, "System D" would seem to be more and more relevant in the future. Whether you are a survivalist planning on trading with others in a wilder world or are simply expecting the recession to drag on and don't know how to make ends meet, an examination of the emerging power of black markets seems important food for thought when considering almost any aspect of the future.

reply to post by silent thunder


Nice post.

Everytime I have talked to my buds about the black market they look at me as if I am a Martian.

For the most part, most of them think that things will just keep chugging along. Coffee, Beans and bullets and tobacco will all be valuable commodities in a SHTF scenario. Even soap.

I won't add fuel as that is a no-brainer, but would also make you more of a target than the items stated above.

Seriously OP, this is a valid question. I am reminded of the film, "Judge Dredd" where in some distant future, people live in the cities, and the disenfranchised are engaged in inner-city with the cops, but who would hate it even more if they were thrown out into the wasteland.

It seems to be a problem of codes, as most rural land does not allow you to do open air foundry work or build a factory without paying significant graft. Typically industry is controlled by the courts, who can regulate any business or trade into the dust if they wish.

Hmm, I am also reminded of the 18th amendment and how draconian laws only contribute to more lawlessness. amazing that they used to COTUS to do such violence against the people as to build the Mafia by making booze illegal. but that is exactly what happened.

Yet two loveable rogues like Bo and Luke Duke, smuggling moonshine in their Dodge Charger, would these days, call down the revenuers like actual white lightning from the fist of Zeus hisself. Seriously, I am not even sure we are allowed to discuss moonshine on ATS. Certainly we cannot discuss how it is made.

But my overall point is that the Dukes of Hazzard was a great TV show, and they seem to fit the profile you are describing. I predict a rise of both moonshine runnin and souped up family sponsored stock car driving.

the black and grey markets are the best. it is a true capitalist system, regulated by supply, demand and because the elites aren't getting their taxes, legality.

where else can you be your own man and trade on a man to man basis, without big brother taking his cut and in your business.

it's refreshing actually keeping all you earn. and despite all the brainwashing, it's not wrong to offer your time, work and sweat and contract your services to someone willing to meet your price. and keep what you earn.

isn't paying taxes socialist anyways. i guess not using their reasoning. if you pay taxes and they give services, contracts and pay to themselves and their friends, it's capitalism.

if you pay taxes and the money pays for services that benefit you, it's socialism.

and why pay taxes if the government provides nothing in return. property taxes and 1% federal income tax for nuclear weapon upkeep is all that's required.

anybody steps on american soil, america launches armageddon on their country.

i think that will pretty much deter king edward's spoiled brats and entitled descendants from reclaiming america back for great britain.

"I'm totally off the grid," one unlicensed jewelry designer told me. "It was never an option to do it any other way. It never even crossed my mind. It was financially absolutely impossible."

Are the capitalists pricing themselves out of business??

I think over time this trend will increasingly grow to be normal. Capitalism--and human greed--are not meant to be regulated. As more and more countries become wealthier and the ultra-wealthy begin to gravitate towards the Mercantilist theories of old, regulation will increase exponentially.

Just look at America today. No matter what kind of small business you would like to open up, it could cost you tens of thousands, if not hundreds of thousands, of dollars just in fees, and fines, and regulations. And in many nations, the people either cannot afford to become legitimate, or do not have the opportunity.

As the rich grow richer and the poor poorer, this will become the norm.

This is where what I foresee coming will cause the black market huge problems. First, get people used to using bank cards, etc. and then take cash out of society period. Think about it. And this is how it will be sold. No cash, no robberies, no drug deals, because no cash! It will give the government the ability to watch and tax or charge a fee on every purchase you make automatically. No need to file taxes or anything else because there will be no need in a cashless society. They already have the key fob credit cards or bank cards to check out with. It is becoming more and more prevalent; the governments already have this in the works IMHO. It is just a matter of time. Everything will become credits for what they will sell as a "Global Trade" of goods and services. The next step could be RFID chips implanted and they then can track medical health, location, monetary value, etc. and they will use biometric security like the little 3 digit number on the back of your debit or credit card, but instead use an IRIS scan or whatever to make sure someone didn't cut your chip out of you. I believe this is what the bible is talking about as well in Revelations 6:6, the end of days. The system is ready to implement this type of system and it is convincing people they need it. Well, kidnappings (Amber Alerts), robberies, drug sales in the streets, etc. The black market will have to become a barter system and the problem with that is when you try to convert what you barter into credits the computer will flag you as an abnormal transaction. Kind of like NEO, you get called into the IRS or FBI office with all your transactions on their computer which should balance out with your liquidity, unless you have done some kind of illegal transaction! Only everyone and I mean everyone ignoring their attempt to implement this system by bartering and never using their banks, etc. can it be put on the scrap heap of history. Problem is, regular jobs will be paid direct deposit and you will need it to buy food, pay mortgages, car notes, etc.

Then I heard what sounded like a voice among the four living creatures, saying, "A quart of wheat for a day's wages, and three quarts of barley for a day's wages, and do not damage the oil and the wine!"

reply to post by spirit_horse


I believe that even if cash disappears completely, there will always be some way to hide money, some way to transact anonymously, and some way to conduct black-market activity. Firstly, humans are bound by their nature to their baser appetites, their sweet tooth for the ilicit. The demand that drives the huge illicit markets simply isn't going away, and any system that doesn't have a workaround big enough to accomidate humanity's greed and need for secrecy will simply snap and break. And now that "System D" is the only livlihood for billions, there will be tremendous upheaval on the grassroots level, too. Secondly, there are a lot of very, very wealthy and powerful people who cannot operate their massive businesses without some degree of secrecy. These people will oppose any kind of transparent cashless system tooth and nail. Most of them will not be restrained by the nicities of the law, either, if you get my drift. I think these facts will make the implementation of a cashless society harder than one might think

There are so many strange aspects to the "black market."

I read this book and learned a lot: Animal Underworld: Inside America's Black Market for Rare and Exotic Species.

That's a very small corner of what we are talking about, though.

Based on the source article of this thread, it sounds like the bulk of these people are like one step above street vendors in Africa, Asia, and Latin America, plus people in the US who are marginally employed busking, or doing some kind of street sales, etc. Not to mention illegal and immoral trade, flat-out. This is a dirty business. I don't like the way the article "celebrates" it as some kind of new frontier of capitalism. Or people in this thread who seem to think it's "natural." I don't know, it sounds very cruel and cold to me...

So reading this, seems to me, what we are talking about essentially is that instead of the "old way" where people had real jobs, professions, skills, life-work, and job security, we are entering some kind of bazzar-market freakshow where you have to be juggling endless part-time jobs, scams, hustles, stuff on the edge (or over the edge) of the law....and the hyper-libertarian types laud this as some kind of positive sign? I don't THINK so...

Originally posted by silent thunder
[...]

Firstly, humans are bound by their nature to their baser appetites, their sweet tooth for the ilicit. The demand that drives the huge illicit markets simply isn't going away

[...]

Very interesting and salient point here silent thunder.

Do you feel then, that the courts' job (or the Vatican or the Jesuit "Company") is to then "regulate out" these baser appetites?

I guess my question as it pertains to your point above, which is really the key point, is this: If humans are a certain way, then are humans bad or good? That is to say, these "baser" instincts like renting prostitutes or getting drunk on moonshine or looking at jail-bait-y pictures and such, well, do you think humans will ever be free from their base instincts?

See because, the whole of the law code, exists, and is perpetuated by the Vatican and its Hoffjuden, and these priests-of-knowing, have decided that humans as such, must change or die. That probably is why the vatican and their black markets (The Mafia) were built up, that is to say, the 18th Amendment was designed to regulate and "shape" the humans of America, yet what it really did was create more base of crime.

I enjoy those "Godfather" movies very much, as historical tellings, and I wish they would become grade-school level curriculum. I notice how the mob promoted the base instincts of society (as you mention these are ever present) and yet funneled their tithing and power to the Vatican, which accomplishes inquisitions and global wars through their Jesuit "Company".

So if it is the human being, who they are trying to regulate, I think it is interesting this three-way troika of Vatican-Mob-Jesuits which has been floated onto the heads of US people. I think the 18th Amendment would be utterly hilarious to aliens if they ever decided to land and read our COTUS. They would surely laugh their giant heads off. I look forward to hearing what your solution would be to regulate these humans out of their baser instincts. What methods should be used and what methods are too harsh?

Both the photoes you gave are technically NOT black market.
Photo 1, None of the people there earn enough to pay taxes.
Photo Number 2. They are underage

Originally posted by spirit_horse
This is where what I foresee coming will cause the black market huge problems. First, get people used to using bank cards, etc. and then take cash out of society period. Think about it. And this is how it will be sold. No cash, no robberies, no drug deals, because no cash! It will give the government the ability to watch and tax or charge a fee on every purchase you make automatically. No need to file taxes or anything else because there will be no need in a cashless society. They already have the key fob credit cards or bank cards to check out with. It is becoming more and more prevalent; the governments already have this in the works IMHO. It is just a matter of time. Everything will become credits for what they will sell as a "Global Trade" of goods and services. The next step could be RFID chips implanted and they then can track medical health, location, monetary value, etc. and they will use biometric security like the little 3 digit number on the back of your debit or credit card, but instead use an IRIS scan or whatever to make sure someone didn't cut your chip out of you. I believe this is what the bible is talking about as well in Revelations 6:6, the end of days. The system is ready to implement this type of system and it is convincing people they need it. Well, kidnappings (Amber Alerts), robberies, drug sales in the streets, etc. The black market will have to become a barter system and the problem with that is when you try to convert what you barter into credits the computer will flag you as an abnormal transaction. Kind of like NEO, you get called into the IRS or FBI office with all your transactions on their computer which should balance out with your liquidity, unless you have done some kind of illegal transaction! Only everyone and I mean everyone ignoring their attempt to implement this system by bartering and never using their banks, etc. can it be put on the scrap heap of history. Problem is, regular jobs will be paid direct deposit and you will need it to buy food, pay mortgages, car notes, etc.

Then I heard what sounded like a voice among the four living creatures, saying, "A quart of wheat for a day's wages, and three quarts of barley for a day's wages, and do not damage the oil and the wine!"

edit on 3/11/11 by spirit_horse because: typos

edit on 3/11/11 by spirit_horse because: typos

You can still Make transactions for illeagal products in the UK with your bank card...

I can 100% gaurentee that although prostitution is illeagal in the UK there are Mobile Phone looking devices which you can scan your card into and make a direct payment into a prostitutes Bank account, because these systems are designed to keep prostitutes safe as it allows them to not be holding vast amounts of cash the information is not tracked, furthermore because of the leagality of storing credit card/bank card details the information is scrubbed froma system within three days... this absolutley happens my other half works with the systems in question (not as a prostitute but as a techy on the back end of the system)

if they used the details against the users there would be a lack of faith in the systems and the idea to protect vunerable women would be counter productive.


So just saying you can make illeagal purchases in the uk right now

The black market is like the regular market, and ultimately it is run by the same thing as all markets are...Supply and demand...It's just caters to the more bizarre and out there people, even the down right unhealthy.....But ultimately it's run by people just like any other market and yes the government, rich people, and corporations do have there hands in it. Why people seem to think they don't, is beyond me. But I do know why.


It's basically the same as any other market only the ones who want to sell you stuff wear black and blend in to the background both day and night, instead of the regular shiny neon markets that are around during the day and night. ie avoid taxation by not being in the limelight.

But most times those that sell something during the day in the regular ol market, sell something else at night in the blackmarket....But in the end its the same person in different clothes catering to different fashions, needs, wants, particulars, quiddities, and idiosyncrasies etc etc. Like everything it has it's ups, and downs. It's bargains and sales.

There is no such thing as a free market anywhere though, that is a myth.

All things are just labels and as such....meaningless, it's a game people play.... It's even done in video-games, ever play any mmorpg or any online game with a real life human base and a trade or resource supposed free "market" you will see that every time it breaks down into the same things that happen in the real world markets, anything from raising prices for stuff by keeping them in scarcity, to this whole black market thing. Even to cheating the system, and even criminal elements as well.

Really if you play some of these games, they mirror real life pretty accurately and this whole market thing is just the easiest to see. It's even down right made to be obvious.

reply to post by smallpeeps


I think that while society as we know it has enormous benefits for humanity, it also is unnatural, given what our brains and bodies are geared for. For most of our time as a species we were hunter-gatherers living in small, mobile bands of not more than 20 or 30 other people, for the most part. That is what we are "built for," mentally and physically. To live in bigger, more complex societies requires self-restraint and a kind of "taming" that has its advantages but also is mentally and spiritually unnatural.

So I think if society is to remain viable, it needs to have "steam valves" for relasing stress and coping with human nature. Various powers in society are involved in regulating these steam valves, and greed comes into play there too, because a lot of money and power accrues to the gatekeepers.

But beyond this, the really interesting thing about black markets is not the way it indulges vices, but rather when the black market becomes a way of life for people...a necessity even for things like bars of soap or clothes or radios, etc. Much of the third world is set us this way and I think the first world is headed there too.

Originally posted by silent thunder
[...]

For most of our time as a species we were hunter-gatherers living in small, mobile bands of not more than 20 or 30 other people, for the most part. That is what we are "built for," mentally and physically. To live in bigger, more complex societies requires self-restraint and a kind of "taming" that has its advantages but also is mentally and spiritually unnatural.

[...]

I wanted to highlight the key of your reply, thanks again for excellent insight here.

So then, with for example prohibiton, forbiddance of alcohol by the church/authorities, would you agree that this "taming" of humanity, can also raise up criminals and black markets?

That is to say, "The Mafia" might be considered, the completely untamed, in society, but it is they who benefit from the black market which is the "failure" of the "taming"? Would you agree then, that in the process you describe (small sinful tribes gathering in large groups) there will always be some tribe that gets rich off the "taming" process, as you describe it? I am curious.

Originally posted by smallpeeps
So then, with for example prohibiton, forbiddance of alcohol by the church/authorities, would you agree that this "taming" of humanity, can also raise up criminals and black markets?

Absolutely. I completely agree. You could say in a way they create each other...

That is to say, "The Mafia" might be considered, the completely untamed, in society, but it is they who benefit from the black market which is the "failure" of the "taming"? Would you agree then, that in the process you describe (small sinful tribes gathering in large groups) there will always be some tribe that gets rich off the "taming" process, as you describe it? I am curious.

The mafia isn't completely untamed...it's called "Organized crime," which implies organization. But yes, they do benift from the system, for sure. I think people on "both sides of the law" benefit from both the laws and the breaking of laws. For example, corrupt officials who take bribes benefit in two ways: 1) They benefit from the existence of the law, which pays for their basic paychecks and keeps them employed, and 2) they also benefit from the breaking of law, such as by taking bribes to permit crimes. And they are able to be paid so much due to the illegality of the situation, which requires there to be law in the first place. Meanwhile, the criminal class also benefits, as you have pointed out. And the normal "man on the street" benefits from both sides of the law...he wants to live in a safe neighborhood, where there is no fear of getting robbed or mugged, and he likes the law for that reason. But maybe he also has feral appetites of his own and may break the law from time to time in various ways...see, its always a complex situation, lots of benefits and drawbacks for many different groups and individuals.

Originally posted by silent thunder
The mafia isn't completely untamed...it's called "Organized crime," which implies organization. But yes, they do benift from the system, for sure. I think people on "both sides of the law" benefit from both the laws and the breaking of laws. For example, corrupt officials who take bribes benefit in two ways: 1) They benefit from the existence of the law, which pays for their basic paychecks and keeps them employed, and 2) they also benefit from the breaking of law, such as by taking bribes to permit crimes. And they are able to be paid so much due to the illegality of the situation, which requires there to be law in the first place. Meanwhile, the criminal class also benefits, as you have pointed out. And the normal "man on the street" benefits from both sides of the law...he wants to live in a safe neighborhood, where there is no fear of getting robbed or mugged, and he likes the law for that reason. But maybe he also has feral appetites of his own and may break the law from time to time in various ways...see, its always a complex situation, lots of benefits and drawbacks for many different groups and individuals.

Outstanding analysis.

Therefore, wouldn't you agree, that the law is in many cases (I would say in most cases) counter-productive to its stated goals?

That is to say, if there are two tribes (Mafia and Feds/Judges) let's say, and they both profit from the "taming" via law, then it is criminal to perpetuate the process at its current level?

What I mean is that, the Mafia has a gigantic tribe, outside the rules of the commoners, and the Feds have a gigantic tribe, outside the rules of the commoners, and it is the commoner, who gets shaped or "tamed", and he has no tribe, only his own family, so it's like two super tribes, using law/lawlessness, to double-team the individual himself, and the family he tried to defend?

Based on your comments, you agree that there are two larger tribes, black and white, and they both use "the law" to gain more power, then how can it be said that "law" as such, is beneficial to the individual? It would seem from your analysis, that the common man, lacks a tribe, which can compete with the other two tribes. Would you agree?

I am saying for example, that the 18th Amendment, profited the two tribes of law and lawlessness, but did great harm to the average humans. So how would you reconcile this need to "tame" the human, with the fact that the attempts at "taming", fail so horribly?

Thanks again for your excellent insights.

reply to post by smallpeeps


Thanks for your posts, too.

Yes, I would agree more or less with what you posted. You have two tribes and the vast middle is prayed on by both of them. I'd actually say there are more than two tribes, there are many...in addition to the criminals and the authorities, you also have groups like big companies and financiers who are screwing everyone over (while also providing valuable goods and services, and jobs...again its both benefit/drawback). There are probably other examples, some people might argue that organized religion is a shakedown; I think its a little more complex than that but that's another possible example of a "tribe" that prays on society. What else...the media? I guess if I thought about it I could come up with more examples...

But always, always the guy in the middle is being picked on, and the less organized you are the greater the chances you are being exploited in some way.

I guess if the system were working ideally, all these power blocs could balance each other off against each other, and and cancel each other out...a balance of power...sometimes it works that way but it seems to me these days things are increasingly out of balance. Despite my criticisms, though, I can't see any way around a system like this. I don't see any viable alternatives. It isn't perfect, but it's preferable to anarchy, at least in my opinion.

Originally posted by silent thunder
[...]

I guess if the system were working ideally, all these power blocs could balance each other off against each other, and and cancel each other out..

[...]

I don't see any viable alternatives. It isn't perfect, but it's preferable to anarchy, at least in my opinion.

I would comment in this way (I snipped your fine post so I can more easily respond):

Your first point above strikes at the heart of the matter. That ideally, they would both kill each other off, meaning, Vatican-adherent-organized crime, and the righteous "shapers" of humanity who use them to grow stronger, and who both fail humanity, are logically useless, to humanity.

As mentioned, the 18th Amendment (and the resultant anarchy) benefited both black/white tribes, both of which were like armies in form and structure. It is as if the scheme of this market/world, is to grind the common man between these two fronts. Would you agree? The statement I am making, speaks to the deep rooted conspiracy against the common family. Many disbelieve conspiracy, yet i feel this exchange is explaining clearly that there are two very organized armies, in contest with each other, and that both tribes/armies have complete contempt for the common people.

I would say they should both eliminate each other, and a better world would automatically result.

I am also thinking of the body called "INTERPOL" which was built by Germans, and babysat by Nazis during WW2, and which is the supra-national police force of Earth today. I am quite amazed at their utter failure in regards to fighting "organized crime". Also, since you agree that Mafia (and each culture/nation has their mafia) means: organization, then can't it be said that the real goal, is to keep the common man DIS-organized?

That is to say, nobody is really interested in reducing "crime" as such, as a first priority. The real goal between the "organized criminals" and the "organized police", is to exploit the common man. Would you agree?

reply to post by smallpeeps

That is to say, nobody is really interested in reducing "crime" as such, as a first priority. The real goal between the "organized criminals" and the "organized police", is to exploit the common man. Would you agree?

Is that not obvious, but there is a sort of balance. And it's called and represented by the bull# meter, and when it reaches critical the # hits the fan, shtf for short. It's a self restarting cycle it's the nature of humanity, and of things. By itself and without somebody or something guiding it to different ends and means...It will implode fast, then watch them all flee both the lawful and the lawless, they are after all two sides of the same coin.

But yes with a little change in circumstances there is very little, to no difference between both groups or any other groups, there all there for the same reasons...And that is exploitation of the heard, and humans are heard animals don't you know.

But the times they are a changing in given time and the right pressures, things can get better or things can get worse.

Anyways George Carlin said it best on what holds not only america together, but every civilization on the face of the earth that has ever existed.....Bull# is the glue that holds it all together.