System D: The Shadow Economy is the Second Largest in the World

In 2009, the OECD concluded that half the world’s workers (almost 1.8 billion people) were employed in the shadow economy. By 2020, the OECD predicts the shadow economy will employ two-thirds of the world’s workers. This new economy even has a name: “System D.”  

In a new article (accompanying photoessay here) for Foreign Policy, Robert Neuwirth explains: 

System D is a slang phrase pirated from French-speaking Africa and the Caribbean. The French have a word that they often use to describe particularly effective and motivated people. They call them débrouillards. To say a man is a débrouillard is to tell people how resourceful and ingenious he is. The former French colonies have sculpted this word to their own social and economic reality. They say that inventive, self-starting, entrepreneurial merchants who are doing business on their own, without registering or being regulated by the bureaucracy and, for the most part, without paying taxes, are part of “l’economie de la débrouillardise.” Or, sweetened for street use, “Systeme D.” This essentially translates as the ingenuity economy, the economy of improvisation and self-reliance, the do-it-yourself, or DIY, economy.

The shadow economy is involved in everything from “mobile phones to heavy machinery to roses” to “trash pickup, recycling, transportation, and even utilities.” And it’s big:

The total value of System D as a global phenomenon is close to $10 trillion. Which makes for another astonishing revelation. If System D were an independent nation, united in a single political structure — call it the United Street Sellers Republic (USSR) or, perhaps, Bazaaristan — it would be an economic superpower, the second-largest economy in the world (the United States, with a GDP of $14 trillion, is numero uno). 

Is this the economy of the future?


Deliberatus

Not if the establishment has anything to say about it.

O mean, really, not paying taxes, avoiding regulations, doing as they please... you MUST be kidding. PERMIT this? ALLOW it? ACCEPT it? Did you really for even a SECO)ND think they would say "ok, go ahead, enjoy, have a good time." They will come and arrest you and shoot you dead if you resist, if they catch you at it.

NATURALLY officer, I am a law abiding citizen and I encourage ALL people to follow EVERY law and regulation of the government in every aspect of their life, personal or commercial.

Remember, one should always be a patriot in a public forum.

ian shearer

Systeme D will employ 2/3 of the world's population by 2020. That is a scathing verdict on the burdensome bureacracies that have grown in the developed nations. Why do people prefer the black market. Easy. Where I live my marginal income tax rate is 40% and the VAT is 20%. So goods of value 100 net are priced at 120 inc VAT and it takes 200 units of my wages pre tax to buy them (income tax on 200 is 80) leaving 120. Systeme D does not pay unemployment allowance ,pensions, sick pay, maternity, paternity, child support and a whole host of Jobsworths enforcing regulations.

England under Elizabeth 1 operated entirely under systeme D. All taxation was voluntary, yes really! The nation forged ahead of its powerful neighbours weighed down by opressive taxes to fund the kings and Rome. Systeme D will defeat democracies where net claimants on the public purse are allowed to vote pari passu with the net taxpayer. A new type of state will take its place where votes are equal to net taxes paid.

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Alf

Does this include organized crime? Drug traffic, illegal immigration networks, prostitution, etc.

Glenn Richards

His book is absolutely fantastic and an enthralling read. It is a great accompaniment to his book 'Shadow cities' and shows the importance of the informal sector in the growth of the economy of Less Economically Developed Cities. Their role will only become more important in the future of world economics and global trade and needs to be recognised as a way forward to improving the conditions of those living in shanty towns (shadow cities).

Rus Feeney

Is this the economy of the future?

WORSE ! ! !

This will be the next target of the economic globalization super power nation's
tax collectors. The structure is almost complete: The world wide web is done -
world wide global connectivity and coverage is well underway - the 100%
digital currency system is almost complete - to perform any kind of financial
transaction, you will have to go through a totally controlled system. It's like
watching over 7 billion fish being very quietly encircled and trapped by a gigantic
fishnet and it is almost closed . . .