The definition of the Black Market & it’s origin:
As stated in Amy Fontinelle article, Black Market “is a forum whereby goods or services are exchanged illegally.” In the US English of Oxford dictionary it means “An illegal traffic or trade in officially controlled or scarce commodities”. Another definition in Oxford reference Black Market Refers to a “Trading (such as cigarettes, prescription drugs) or (drugs & prostitution) which violates rationing or price control laws, usually both. Black markets can by definition exist only when governments attempt to control prices or ration quantities.” Despite some slight differences when it comes to their meanings in various dictionaries , there is one common word you’ll always find at the beginning or at the end of your reading that is the word illegal, and for all we know the word illegal Does not bode well. There are other names for Black Market that you might also find in several books and articles like Shadow Market, Grey Market, and Underground Economy. But where did this term (Black Market) really come from? Unfortunately there’s no clear information about how it all started and by whom. However, Churchill once said “if you destroyed free market you create a Black Market.” And according to Truman article & the world war history documentary, Black market emerged during World War Two as a response to rationing. There was a black market in stamps in the U.S. “While illegal, the black market became a driving force in the Home Front especially in the cities – for those who could afford the prices” (Trueman). (rationing) didn’t end even when World War two came to an end. The consumption of sugar and meat greatly rose not to mention Life returned back as normal. Black Market moved then to more destitute countries such as Bolivia, Georgia an, but not necessarily disappeared from the U.S. In fact Friedrich Schneider said in his book The Shadow Economy and Work in the Shadow that “Switzerland and the United States, two countries that are widely regarded as among the most developed, tend to be among the lowest-ranking countries in terms of informal economic activity”. This depends on one thing : The size development of the shadow economy of hundred countries almost 165 between 1999 and 2007.
Why is it called the Black Market?
Amy Fontinelle also mentioned in her article what makes the market “black”, saying that it can “either be the illegal nature of the goods and services themselves, the illegal nature of the transaction or both”. Here are other answers relating to this question too that have been collected from different writers, and surprisingly all of their responses fall in agreement, in which they said that it has something to do with their ‘hiding’. Since their transactions are hidden from the government’s sight and the authorities which makes them extremely hard to find. It all works like this almost everyone who has a connection to the Black Market either works with the federals or famous companies. It is a perfect coverage in front of all even their own families so no one can suspect them. But behind these nice backgrounds they are just a bunch of fraud sellers with a stolen million inside their accounts. It makes sense when they, called the market Black which it’s similar to the term dark. We all know the dark blind us from seeing whatever that’s around us so the name and that’s exactly what (Black Market) is. Another considerable reason for its name is that it is related to racism. It’s a kind of a belief which spread among the white Americans in the 17th century after the European colonization of North America. because of this Black Market began human trafficking activity where they used to perform it on black people, according to Dianne who holds a Master’s Degree in Criminal Justice ” It was the fastest growing black market trade”. They were sold to be slaves for the richer people, and they were forced to do all kinds of humiliating work regardless of their age, also were tortured for their silliest mistakes. Even today human trafficking is still being carried out in some countries like Mexico where many children and teenagers were kidnapped from the street to be sold. But you’ll never see this kind of cases in more developed countries.
After all even with us being absolutely clueless about the mentioned reasons, the name is quiet clear by itself, danger, threat, and risk, it’s all that we receive just by looking at the market’s name.
How did the Black Market change over the years?
What people thought would be over turns out wrong. Even after WWII was over in 1945, and the country gradually started to retrieve its strength again after the horrible event, Black Market didn’t withdraw their transaction But instead continued. And over the years the market changed where it wasn’t the same as it first started. How exactly? Year after year the Black Market supplies turn to be the most dangerous weapons in the US. Most laws that was set by the governments in order to cut off some supplies from all markets were simply not enough for all residents, and you cannot know for sure who deserves more than others to grant him/her the product. But most importantly because they have serious risks on the human health, so these laws basically protects people from harm: “The safety of the people shall be the highest law.” (Cicero). The examples of the products that endanger the human health are Ketamine, Amphetamines, which are dangerous drugs, also Carolina reaper, and Real Absinthe “it’s the ultimate psychoactive and hallucinogenic drink which can cause hallucinations to muscle spasms to seizures” (Bocco). Black Market took advantage in the lack of these products not to mention the forbidden ones and included them in their transactions despite of their harmful effects. This market helped people especially the Jews during the year 1945 by providing them with the essential goods and food like bread, meat, fruits and vegetables but it seems today the US citizen, the world creatures and the US economy are put to extreme danger because of it. The Shadow economy became bigger & bigger to the point where other countries have been affected by it. With the increasing number of richer people going to the market . Also with more immigrated workers coming from the outside to work there, there is no doubt for the market’s growth.
The kinds of supplies they sell in the Black Market & their prices:
$625.63 billion a year that’s how much the United States alone trade behind the governments back which is a lot of money. Not to mention of course, taxes free. But you will get even more money than the CGP of a few countries when you multiply it to six. Whether movies or body parts that are being traded, and it doesn’t seem to stop . According to figures reported by Statisticbrain.com taken from sources including the FBI and the United Nations “these eight industries are the most prolific on the United States Black Market.” All of what is mentioned actually depends on the trends that a certain product presents. But not any trends, for what it means here are the trends of the supply & demand. If you would like a turtle egg for instance, that would only cost you one dollar, because it’s easy to get unlike ivory, which costs about 1,300 dollars, or marijuana that is between 20 dollars and 1,800 dollars. You can also get human organs and you will be surprise how they get it. The doctors passively let patients die in order to use their organs. The liver is the most expensive organ you’ll find in the market since the order is pretty much higher than the other organs, and it’s about 157,000$. Moreover the market won’t only provide you products but with services too. For example some people have a certain person in their heads that they wanted them to be dead, Instead of them committing the crime to achieve their goal, they go to the Black Market and hire a hitman to kill the person for 25,000$. It’s clear that most of the stuff in the market are really expensive, but the purpose of making their prices like that is only to attract people with real money.As we can see here, Black Market does not sell the most necessary things in life, but they are selling poison to people, which in the end are going to destroy their health, they’re lives and the US economy. Down below in figure (2) & (3) are pictures of some animals that have been illegally killed in Africa for the use of their skin, also for their horns to be bought and sold in the market.
The Black Market impact on the U.S economy:
The Black Market does effect the real economy because money goes out of it to this market. The most common ways is through employment. In which some estimates place in the United States employment in the black market at 18%-33%. Part of this percentage is Immigrants who sometimes find themselves working for money in the Shadow economy. It is a small percentage comparing to China and India where the employment in the Underground Market reaches beyond 50%. If we could imagine that many people were unemployed throughout the United States. We would see that there would be some malfunction, due to alter of the quantity of trade in the black market which it transferred to the normal economy. It would also leave a lot of people not working so, the problem is still going to be there. “No government, no global nonprofit, no multinational enterprise can seriously claim to be able to replace the 1.8 billion jobs created by the economic underground. In truth, the best hope for growth in most emerging economies lies in the shadows” (Neuwirth).
The market’s transaction is the second way for money to go into. The purpose of these off-the-record transactions is to avoid the numerous taxes, which need to be paid to the government. Every year the government tend to lose because of this, amounting to millions of dollars. It’s a huge lose for this money would have been used for the benefit of its citizens & the country itself. Figure (4) clarify the United States GDP rate from 2012 to 2014 which, we can see a great red decline in 2014, not gradually going down but sudden. Also in figure (5) we can the employment rate went a lot down starting from 2010 to 2014 the exact year when the financial crisis occurred in America and it is mostly because of the Shadow Market. But can this happen again?
After years the united states was finally able to prevent their economy from falling. In which the government made number of steps to get more of the underground economy into the real economy and to solve the problem, at least partially. Examples of what the government did is lowering the income tax rates to encouraged people to report income more precisely and more efficient way or by raising the tax evasion penalties to stop encouraging underreporting. The third way is through legalization of the Black Market activity. Of course, a stronger economy overall with more good payment jobs also helps to dwindle the underground economy’s activities.
Are there solutions for the Black Market activities to stop?
With all the bad and harmful effects of the market, people are still spending their money on it. According to a White House study “Americans spent $109 billion on illegal drugs in 2010, roughly the same as the $108 billion they spent on illegal narcotics in 2000”. And According to the economist Edgar Feige “the estimated underground economic activity in the U.S totals $2 trillion in 2012, approximately 12% of GDP at the time.” As the IRS reported also “nearly $500 billion in taxes were lost in 2012 due to unreported wage.” That’s a lot of money coming from the people’s wallet. The US governments can’t entirely blame the market for all the damages that were done in the country. If people did not throw their money in the underground economy, and also if the government warned their citizens from the beginning, they just might have avoided the old crises however, we can say they have learned their mistake.
Now you’ll find all kinds of media talking about this issue such as the newspaper, television, and in the internet, to raise more awareness among American Society. But did that help the trading to stop? The answer is no and here is why, the government sometimes supports the Black Market, by pushing some people to smuggle crude oil for their country. It was once written in the New York Times newspaper about a dozen of stolen oil from Iraq and some politicians are not afraid to tell the truth about this matter and so does other people for there is no need for a real brain to know who did it. Of course who else send hundreds of soldiers every year to Iraq to the point where it actually became their second home. No matter how much they tried to cover up their story, people are still going to know that is America “we’ll make it legal to buy natural resources, essentially from anyone who can control them by force” (Magistad). In fact how can the US expect from the underground economy to gradually shut down if the government itself is corrupted! “Corruption is a cancer: a cancer that eats away at a citizen’s faith in democracy, diminishes the instinct for innovation and creativity; already-tight national budgets, crowding out important national investments. It wastes the talent of entire generations. It scares away investments and job” (Biden).
For all that was mentioned there are basically no solutions for the Black Market activities to stop, but as Biden also said ” Fighting corruption is not just good governance. It’s self-defense. It’s patriotism.”