The Black Market is now the 2nd largest economy in the world
Prior to the financial market collapse of 2008, many economists focused on established capital markets to understand the flow of economic activity between people. Yet, in “2009 the OECD concluded that half the world’s workers (almost 1.8 billion people) were employed in the shadow economy” and that it will employ two-thirds of the world’s workers by 2020”. This finding shattered preconceived notions that economic activity solely occurred in storefronts and capital trade markets. Offline market activity can no longer be overlooked. The global black market features over 200,000 street markets and is growing at a rapid rate.
The first to quantify the size of the world’s black market network was Robert Neuwirth who “spent four years among the chaotic stalls of street markets, talking to pushcart hawkers and gray marketers, to study the remarkable “System D,” the world’s unlicensed economic network”.
The findings by OECD and Robert Neuwirth sparked a series of market studies into the black market networks of both developing and developed countries. While many find that GDPs of developing economies are now flawed due to the absence of undocumented street market activity, others are citing rapid increases in street market activity in the Americas and Europe as more people revert to food markets to eat organic farm vegetables and flea markets to capture unique bargains.
The $10 trillion dollar estimate is not a complete assessment of all activity on the ground and will likely increase as more measures are taken to quantify transactions offline. Vendedy is working with several major global partners to create the first digital map of the street market economy and anticipate the results will overshadow the US economy in a few years. I guess we will have to just wait and see then.