FORWARD BASE B

"Pay my troops no mind; they're just on a fact-finding mission."

Tag Archives: black market

North Korea Black Markets Could Take Over Economy, Undermine Kim Regime

“North Korean citizens, unable to count on a stable income or rationing, are moonlighting as security guards or coal haulers to make ends meet, eroding their allegiance to state authorities.

A South Korean research institute estimates that unauthorized economic activities, such as side businesses, account for 40-70 percent of citizens’ daily lives.

Experts say as much as 75 percent of the North Korean population does not depend on the state-owned economy at all.

The prevailing view is that the regime will lose more of its ruling power unless Kim Jong Un, who succeeded Kim Jong Il as North Korea’s new leader after his death on Dec. 17, reforms and opens up the economy…

At a shoe factory outside Pyongyang, only about 100 of the 750 employees report to the factory. Others buy materials, make shoes on their own and sell them in markets…

North Koreans at the dinner table used to talk about what Kim Il Sung, who founded the country, did and said. Today, they talk about how to make money instead.”

LINK

The Truth Behind Unemployment Numbers?

First,

Simplepolitiks discusses the 7.8% unemployment figure set forth in the presidential debate and tries to figure out how well official unemployment figures correlate with real unemployment.

Second,

10 Reasons Why The Latest Unemployment Numbers Are No Reason To Cheer addresses the numbers of people who have effectively dropped out from the officially recorded labor force, numbers for underemployment, and numbers of people who are employed but struggling with their bills on the wages they are making.

One finds people arriving at similar conclusions in Simplepolitik’s comment section and in the No Reason For Cheer article:

The unique conditions that resulted in a large American middle class have disappeared because American laborers are now in direct competition with people across the planet, many of whom can survive on much lesser wages because of their locally lower costs of living. Employers can be counted on to pay as little for labor as they possibly can.

The natural tendency will be towards an oligarchy of a few rich who control the money and the resources, the natural state of human history while 1945-1990s was a freakish exception to the norm.

I, however, see this as being at odds with all the new technologies that make abundant information and the means of production available to independent private citizens.
If jobs cease to be profitable or reliable for the average person, many will drop out of the game and turn to a gift economy of social favors with their immediate clan or turn to small scale grey market entrepeneurship.

As I discussed in a previous post, Southern Italy’s underworld was born as a reaction to incompetent rulers levying heavy taxation and today it also thrives as a reaction to a horrible economy and high taxes.
If the payoff becomes low enough or jobs are simply unattainable, grey and black markets can surge in importance.

Looking at present trends, I definitely do not see job numbers returning to any 90s status quo.
However, I also see a gradual reduction in the importance of the traditional “job” as people adapt by relying heavily on the internet, tribal support networks, and small businesses.
Jobs suck anyway, so I wonder if in the long term this might actually represent an improvement in overall quality of life for millions of people?

Southern Italy’s Hidden Economy

Many of my recent posts have been about what economic statistics tell us or don’t tell us about the reality on the ground.

Southern Italy is often portrayed as a backward region mired in corruption and sucking endless money from more prosperous parts of Italy and Europe.

I was reading a wikipedia article on organized criminals in Southern Italy and a source cited there opined that Calabria would be a “failed state” if not for the rest of Italy holding it up.

At first glance, unemployment is ridiculously high in the Mezzogiorno yet people somehow spend far more per capita than they supposedly earn.
The numbers just don’t add up.

To get a complete picture of the reality of Southern Italy and a more accurate idea of the gap between North and South, one absolutely must take the workings of the black economy into account.
This is where much of the real money is made.
And explains why organized criminals are such an embedded part of the region’s culture.
Much of their role is simply substituting for government and police: for a fee(aka taxes), they guarantee “black” commercial transactions and contracts through the threat of force.

LINK

Informal Banking: The Hawala System

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