Monday, December 19, 2011

license to die

It's a bit unseemly for Hernando de Soto, writing in Foreign Policy, to use the self-immolation of an unlicensed merchant to make an economic argument. After all, vendors have been skirmishing with officialdom ever since governments began.

The desperation that Tunisian street vendor Mohamed Bouazizi felt after his fruit and scale were confiscated was not exclusively economic, and his response to his travails--to light himself on fire--was extreme, particularly if, as de Soto reports, he doused himself with paint thinner and lit the match only one hour after a local cop confiscated his goods. That's hardly enough time to engage in an official appeal.

Still de Soto is not wrong when he writes that "governments have been toppled, but the underlying economies still remain." He adds: "we found hundreds of small enterprises like Bouazizi's, run by Tunisians with no legal identity, no legal address, and no legal right to their shack or market stall. Without legal documents, their ability to make the most of their assets is limited, and they live in constant fear of being evicted or harassed by local officials. According to our research, around half of the entire Tunisian workforce is employed by extralegal businesses of this kind. Around the region, the number is far larger -- over 100 million."

Indeed. System D--or the informal economy--has the combined economic might of a superpower. If the millions of merchants cited by de Soto--each of them tiny entrepreneurs like Mohamed Bouazizi--would join with others in cooperative action, they would be a force to be reckoned with. Together with squatters and others who are disenfranchised by the free market, they will change their countries and the world.

[***Thanks to Emeka for forwarding the link.***]

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