Thursday, May 31, 2012

The informal economy

Sharon Astyk linked to a rather great article about the informal economy recently, which is worth a read. In case you don't know, the informal economy is any economic activity which isn't reported to the government. Like the barter I made the other day with my friend--she brought me some big pots for planting, and I let her go through the stuff my brother-in-law left with us and take what she wanted. (Not that either of us thought of it as "bartering" then--I think we were both just relieved to get rid of stuff we don't need and don't have space for.) Or when people here "shop" at the transfer station. Or my little brother's summer "job"--chopping up the trees my parents had taken down at their place (for fear they'd fall on the house during a storm--a distinct possibility) and selling it for firewood. (He won't make enough just from that to report it to the IRS.) Babysitting counts. Having a friend repair your sink/vehicle/bike/toilet counts. Giving away your zucchini/eggs/knitted sweater counts. Even volunteering counts as part of the informal economy, which is sort of crazy to me but it does make sense.
Sharon Astyk claims (and from her, there's probably lots of facts to back this up but I don't know where they are) that the informal economy makes up over twice the activity of what the formal economy does, worldwide. Regardless of whether that's true or not, it does make up a significant portion of worldwide activity. Think just of the barter economy worldwide--it's huge. In communist Russia the underground economy was what kept people from starving to death in greater numbers. And it always goes up when the economy gets worse, or when there are outside hardships imposed such as rationing.
Think about the people you know, and how much you might be contributing to the informal economy. Remember, it doesn't have to be something you do for money. Maybe you watch a neighbor's kid for a few hours while she takes her baby to the doctor. Maybe you barter with friends (hello, jewelry swap!), or make Halloween costumes for the kids you know. It's rather staggering when you total it all up, isn't it?
In a lot of ways, I think it's impossible (and needless to say, stupid) to completely avoid the informal economy. Not that I think you should "steal" money from the IRS by not reporting income when you legitimately should, but it seems to me to be more an indicator of community involvement than anything else. If you're not involved with those around you, even just neighbors, then of course you'll go to the store and buy something new rather than asking around to see if you can borrow or barter for it first. When you're involved in your community, however, you learn where to look for something used, or who to ask if they might have something. I needed a stud finder for a project at home and borrowed one from J, rather than buying one myself. It's something he needs, but doesn't use constantly and is easily portable. Why should I buy my own?
Moving toward a more communal mindset of what you "need" will be a great thing if we can make it into a national paradigm shift. There are so many things that we "need" only a few times, or once each week. Like the stud finder. Or even bigger things--do you need a lawnmower of your very own, or could you set up a communal one with your neighbors? What's the point of having four houses with four lawn mowers that need to be stored rather than used a majority of the time? What if instead you set up a schedule (the internet would make this so easy) and had people sign up for time slots instead, and shared one? Less money, less hassle, and less maintenance for each individual involved.
In some ways this type of community sharing is growing. Think of community gardens--they're popping up everywhere, even here. There's a new one at the university, on the defunct Fairbanks Street bridge. A community garden is the perfect use of that space--it was a road until the bridge fell below code for use by vehicles. It was closed off and turned into a walking path instead, with grass where there used to be pavement. And now there's a community garden on one side to make it even more productive and useful. The shared space has taken on new meanings. Would people have thought of doing something like this when times were good? Probably not, because there would be no need. If there's one thing humans are good at, it's focusing on the immediate needs and wants rather than the long-term goals and needs. But the bad times have upsides to them--this community garden created a dual purpose for a shared space, which will increase the efficiency of land and production, as well as increase the use of that space. People who might not have had a garden before, because of a lack of land (apartment dwellers) or not having the right area for a garden (one of my coworkers snagged a raised bed because her yard has too many trees and nothing but lettuce grows in her yard) are now able to produce their own nutritious food.
I'm sure there are people--even lots of people--who think that the underground or informal economy is bad or evil. But it brings more efficiency and sustainability to our system than the formal economy ever has, and for that reason alone I'm proud to say I'm part of it. I'm "bartering" more of my brother-in-law's abandoned kitchenware (and a tub of ice cream, but my friend doesn't know that yet) for pet-sitting when we go to Hawaii. :)

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