BLACK MARKETS

Definition of  SWAP MEET

: a gathering for the sale or barter of usually secondhand objects
: an event at which people can buy, sell, or trade used items

Deadweight loss is the fall in total surplus that results from a market distortion, such as a
tax. In economics, a deadweight loss (also known as excess burden or allocative
inefficiency) is a loss of economic efficiency that can occur when equilibrium for a good or
service is not achieved or is not achievable

Deadweight loss

A deadweight loss, also known as excess burden or allocative inefficiency, is a loss of

economic efficiency that can occur when equilibrium for a good or a service is not achieved.
That can be caused by monopoly pricing in the case of artificial scarcity, an externality, a
tax or subsidy, or a binding price ceiling or price floor ...

2. embargo
an official ban on trade or other commercial activity with a particular country.
"an embargo on grain sales"
.historical
an order of a state forbidding foreign ships to enter, or any ships to leave, its ports.
"an embargo laid by our Emperor upon all vessels whatsoever"
Are embargoes and sanctions the same?
Casually, the words “embargo” and “sanction” are often used interchangeably. ...
Historically, an embargo connotes a complete ban on all commercial activity between two
nations, while sanctions are more limited in scope and prohibit trade in certain types of
goods or transactions with particular individuals and entities.

Difference between Sanction and Embargo

.difference between. -sanction-and-embargo

Sanction refers to create a barrier in certain trading items. Embargo is a trade barrier that

results in partial or complete prohibition on commerce or trade with either one country or
many countries.

arbitrage
the simultaneous buying and selling of securities, currency, or commodities in
different markets or in derivative forms in order to take advantage of differing prices
for the same asset.
"profitable arbitrage opportunities"
verb
There is no question that arbitrage is legal because the Arber is simply exploiting price
differences in the market, effectively buying and selling (bets) as any trader does. There is
nothing illegal about this
 Why Is Arbitrage Trading Legal? |
Arbitrage is the exploiting of price discrepancies within different markets of a similar or
identical assets in order to generate low-risk to no-risk profits, after accounting for
transaction and information costs.Arbitrage trading is not only legal in the United States, but
should be encouraged, as it contributes to market efficiency.

Arbitrage Examples. Arbitrage is a term used to describe the purchase of a product which

is then immediately sold to make a profit. Arbitrage is popular in the stock market or as a
means to make profit from goods being sold at differing prices in varying markets. A person
who uses arbitrage is called an arbitrageur.

DEFINITION of 'Tax Arbitrage' The practice of profiting from differences between the way
transactions are treated for tax purposes. The complexity of tax codes often allows for many
incentives which drive individuals to restructure their transactions in the most advantageous
way in order to pay the least amount of tax.

Car boot sale definition: A car boot sale is a sale where people sell things they own and do
not want

Bazaar -
In pre-Islamic Arabia, two types of bazaar existed: permanent urban markets and temporary
seasonal markets. The temporary seasonal markets were held at specific times of the year
and became associated with particular types of produce. Suq Hijr in Bahrain was noted for
its dates while Suq 'Adan was known for its spices ..

Traditional markets & souks in Abu Dhabi

Souk is Arabic for 'marketplace.' Historically, dhows from the Far East and India would
offload their cargo and the goods would be haggled over in the nearby souks. Over the
years the goods on sale have diversified dramatically; today alongside the spices, silks and
perfumes you'll find electronic goods, souvenirs, clothing ...

1. exchange
. an act of giving one thing and receiving another (especially of the same kind) in return...

the changing of money to its equivalent in the currency of another country.

A futures market is an auction market in which participants buy and sell commodity

and futurescontracts for delivery on a specified future date.

 futures exchange or futures market is a central financial exchange where people can

trade standardized futures contracts; that is, a contract to buy specific quantities of a
commodity or financial instrument at a specified price with delivery set at a specified time in
the future.

Trade agreements are the product of negotiations between two or more sovereign nations
that dictate the terms of the acceptable exchange of goods and services between the
parties.

laissez-faire

the policy of leaving things to take their own course, without interfering.
In a market economy, who determines the price and quantity 
In a market economy producers and consumers interact to determine what the
equilibrium price and quantity will be. Answer: a. If a good is inferior then it is negatively
related to income, so if income decreases demand will increase.

To what degree can governments control prices or quantities of ...

.But to what degree can they succeed? History has countless examples, but I believe the
answer is nicely illustrated by Nicaragua's “War on Toilet Paper” - in short, not very far.
If government prices for a good or service are set too low, producers will not supply them
(or go out of business in the attempt). Ascontrolled supplies ..

Underground Economy Definition |

The underground economy refers to illegal economic activity. Transactions in
the underground economy are illegal either because the good or service being traded is
illegal or because an otherwise licit transaction does not comply with government reporting
requirements

How does the black market affect the economy?

Just because the black market is full of illegal goods and transactions, doesn't mean it
operates in isolation. Money goes in and out of the black market, so it doesimpact the
real economy. ... Depending on the goods and services, the black market can
also impact supply and demand for an individual firm.
What is an example of a black market?
Drug dealing is one of the most prominent black markets in the United States. In this black
market, people buy and sell drugs knowing that such activity is usually illegal and that
possessing the products themselves is usually illegal.
What are the causes of black market?
Sometimes participants in black markets don't want to act illegally, but because they lack
the ability to work legally and need to make money, they don't report their jobs or income to
the government. ... This secondary market is a black market. Governments can
also cause black markets through overregulation.
underground economy |
Underground economy, also called shadow economy, transaction of goods or services
not reported to the government and therefore beyond the reach of tax collectors and
regulators.

What is the Shadow Economy?

The shadow economy refers to all work activity and business transaction that occur 'below
the radar' – economic activity that is undeclared and for which taxes that should be paid are
not.

What is the Informal Sector?

The informal sector, also known as the underground economy, black economy, shadow
economy, or gray economy, is part of a country's economy that is not recognized as normal
income sources. People who work in the informal sector do not declare their income and
pay no taxes on them. The term includes illegal

Wage employment in informal jobs: workers without formal contracts, worker benefits or

social protection for formal or informal firms, for households, or those employees with no
fixed employer, such as employees of informal enterprises; other informal wage workers
(for example, casual or day laborers); domestic workers ...
An unreported economy refers to an economy that is engaged in
those economicactivities that circumvent the institutionally established fiscal rules as
codified in the tax code. An unreported economy does not report to the tax authority the
amount of income that is to be reported.

Difference between Black Market and Grey Market | Black Market vs ...
grey market usually deals with the genuine goods that are sold and bought through the
unauthorized channel of distribution. ... Key Difference: Black market deals with the
banned, counterfeit or stolen items which are sold in the market illegally. Grey ... Grey
market lies somewhere between the black and white markets.

What is the definition of white market?

The white market, in libertarian economic theory, is the legal, official, authorized, or
intended market for goods and services. ... The rest of the business would (and already
often does) expand off the books with independent contractors who supply, service, and
distribute the finished product
Black Market and Grey Market are related to the illegal facet of the market. Black Market and
Grey market are different from each other. Black market is all about trading in items and
services which are considered to be illegal by laws. These transactions are generally made
on fake or counterfeit products in a black market.

It deals with the trade of stolen items, lawfully banned or counterfeit items. Therefore, these
goods or services are also traded in an illegal manner. For example, weapons and drugs are
two most commonly traded black market items.  Black market is closely related to brand
abuse.

Grey market lies somewhere between the black and white markets. It generally deals
with the genuine commodities. However, they lack the proper authorization or
controlling factors.

A simple example of a grey market is the one which is developed by people who
trade in goods at lower rates than the official rates.  The goods of grey market are
not like counterfeit goods of black market. It typically involves those services which
are not registered legally in order to save taxes from the government. Thus, most
often the distribution channel used is unauthorized or unofficial in the grey market.

White market
The white market, is the legal, official, authorized, or intended market for goods and
services. It is distinct from the black market of illegally trafficked goods and the grey market,
in which commodities are distributed through channels which, while legal, are unofficial,
unauthorized, or unintended by the original manufacture
The Effects of a Black Market on Supply and Demand

When a product is made illegal by the government, often times a black market will
emerge for said product. But how does supply and demand change when goods shift
from a legal to a black market?

A simple supply and demand graph can prove helpful in visualizing this scenario.
Let's see how the black market affects a typical supply and demand graph, and what
that means for consumers.

Typical Supply and Demand Graph

 Black Market Supply and Demand Illustration - 1.

To understand what changes happen when a good is made illegal, it is important to

first illustrate what the supply and demand for the good looked like in the pre-black
market days.

To do so, arbitrarily draw a downward sloping demand curve (shown in blue) and an
upward sloping supply curve (shown in red), as illustrated in this graph. Note that
price is on the X-axis and quantity is on the Y-axis.

The point of intersection between the 2 curves is the natural market price when a
good is legal.

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The Effects of a Black Market

When the government makes the product illegal, a black market is subsequently
created. When a government makes a product illegal, such as marijuana, 2 things
tend to happen.
First, there is a sharp drop in supply as the penalties for selling the good cause
people to shift into other industries.

Second, a drop in demand is observed as a prohibition

of possessing the good deters some consumers from wanting to buy it.

Black Market Supply and Demand Graph

 Black Market Supply and Demand Illustration - 2.

A drop in supply means the upward sloping supply curve will shift to the left.
Similarly, a drop in demand means the downward sloping demand curve will shift to
the left.

Typically the supply side effects dominate the demand side ones when the
government creates a black market. Meaning, the shift in the supply curve is larger
than the shift in the demand curve. This is shown with the new dark blue demand
curve and the new dark red supply curve in this graph.

Now look at the new point at which the new supply and demand curves intersect.

The shift in supply and demand causes the quantity consumed of the black market
good to decrease, while the price rises. If the demand side effects dominate, there
will be a drop in quantity consumed, but there will also see a corresponding drop in
price. However, this does not typically happen in a black market. Instead, there is
normally a rise in price.

The amount of the price change and the change in quantity consumed will depend
on the magnitude of the shifts of the curve, as well as the price elasticity of
demand and the price elasticity of supply.

compounding a crime - Legal Definition. n. The offense committed by a victim of

a crime when he or she fails to report or prosecute the offender or agrees to hamper
prosecution in exchange for a bribe, act of atonement, or making of amends by thecriminal.
 What is meant by compounding a crime?
compounding a crime - Legal Definition. n. The offense committed by a victim of
acrime when he or she fails to report or prosecute the offender or agrees to hamper
prosecution in exchange for a bribe, act of atonement, or making of amends by
thecriminal.
commission-free exchange-traded funds (ETFs) are a growing trend. While many mutual
funds have long been without broker transaction fees, ETFs trade like stocks and most
brokers charge a small fee (often under $10) to buy or sell an ETF.

counterfeit made in exact imitation of something valuable with the intention to

deceive or defraud
1. black moneyincome illegally obtained or not declared for tax purposes.

money laundering
1. the concealment of the origins of illegally obtained money, typically by means
of transfers involving foreign banks or legitimate businesses.
Money laundering is the act of concealing the transformation of profits from illegal activities
and corruption into ostensibly "legitimate" assets. The dilemma of illicit activities is
accounting for the origin of the proceeds of such activities without raising the suspicion of
law enforcement agencies.

What is Money Laundering? -

Money laundering is the generic term used to describe the process by which criminals
disguise the original ownership and control of the proceeds of criminal conduct by making
such proceeds appear to have derived from a legitimate source. The processes by which
criminally derived property may belaundered are extensive.

Market failure,. Aneconomic term that encompasses a situation where, in any

given market, the quantity of a product demanded by consumers does not equate to the
quantity supplied by suppliers
Contraband |r
Definition of contraband for English Language Learners. : things that are brought into or out
of a country illegally.

Trade in human organs is illegal in many jurisdictions in a number of ways and for various
reasons, though organ trafficking is widespread, as is transplant tourism. The data on the extent
of the black market is difficult to obtain. The question of whether to legalize and regulate the
organ trade to combat illegal trafficking and organ shortage is hotly debated.

Iran is the only nation that allows organs to be bought and sold legally. However, it does place
restrictions on the commercial organ trade in an attempt to limit transplant tourism. The market is
contained within the country; that is, foreigners are not allowed to buy the organs of Iranian

citizens. Additionally, organs can only be transplanted between people of the same nationality –
so, for example, an Iranian cannot purchase a kidney from a refugee from another country.[5] The
system is largely charity- and volunteer-based, and those tasked with matching donors and
patients are not paid for their work.[6]

Black Market is a grey term in relation to gold .It ranges from simple Tax evasion to
smuggling . India has import duty on gold of about 10% .This is a huge impetus to
smugglers , smuggle 1 kg of gold and you have saving of nearly 3 lac rupees .
Now there is other type of black marketing where Bullion dealer sell gold to people in
cash , thus there is no trace of this transaction and black money could easily be
hoarded in gold form , which would be handy and inflation protected .

The black market in art consists of one of the most lucrative, yet unregulated, markets in the
world: one in which billions of dollars’ worth of art are stolen every year, according to
estimates by the Federal Bureau of Investigation. This activity is attractive to criminals,
mainly because valuable pieces of art worth millions of dollars are relatively easy to remove
from museums or homes. It is also a crime where there are no victims, unless we consider
the public or the private owner. Evidently, raising awareness of art theft would be a good
starting point in addressing the risk of such practice to the historical and cultural heritage.
Endangered animals get strongest protections ever at wildlife convention

some scientists predicting a sixth mass extinction, the world's protectors of wildlife acted with
a greater sense of urgency at a marathon meeting to toughen regulations against killing such
endangered animals as sharks, manta rays and anteaters and trading their remains.

By the time the gathering in Johannesburg ended a day early Tuesday, the Convention on
International Trade in Endangered Species, or CITES, had issued several trade bans,
including one for the African grey parrot, favored by animal lovers for its ability to mimic
human speech. CITES also moved to shut down the black-market trade of an exotic anteater
called the pangolin, which is killed and sent mostly to China so its scaly skin can be roasted
for traditional medicine

The grim reality is that black markets have a highly organised and extensive web of
shadow partners and clients, who are attracted by the dollar sign, irrespective of their
nationalities, religious beliefs or principles..

How does ISIS sell oil on the black market?

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For the Iraquian Gouvernement the ISIS zone is still official part of their countrie, the public
workers get paid by central gouvernement, people and goods cross daily the border, a
shopkeeper in ISIS zone can still get is supplies from is wholeseller in Bagdad if he need to
and has the money for it, trucks are circulating, ISIS created customs offices at the "border"
and they collect tax on the goods like any other gouvernement. They even let the trucks from
Jordania to go to Bagdad by crossing ISIS zone, of course they collect a tax on it. 
So for the oil it's very simple, they sell it to someone else in the other part of Iraq where oil

business is more "legal", that someone will sell it to some refineries, that refinerie will export
it and you will use it in your car.

They send it by trucks or even pipelines, why official authorities would mind ? After all ISIS
territory is still part of Iraq, business still go on. Realy, that petrol being sold by ISIS or
someone else is just a detail in the petrol economy of Iraq.
Everyone should understand that the ISIS zone has an almost normal economical life, people
from the rest of Syria or Iraq can enter and leave the territory for some business trip, student
to go to pass exems in Damascus or Bagdad (exept for girls), electric and telephone network
is more or less working in all the Syrian territory (No well due to the war). About postal
services I m not so sure but I won't be surprise if a letter sent from Europe would arrive to
Raqqa.

They have a "government", they collect taxes, they import products, etc....My source is my
job, custom broker working for an international freight forwarder, I keep myself well
informed about the situation there. In a recent serious documentary on a french TV chanel,
the journalists went to the south of Turkey where they saw hundred of trucks crossing the
border to Syria, when they investigated it appears that many of thoses trucks where going to
Raqqa the ISIS capital, they had official export customs documents issued by Turkish
customs services with the city Raqqa clearly identificated as destination of the goods. Actualy
there is no embargo to ISIS zone (expect weapons but those are concern by regulation in all
the world anyway and also luxurious goods), business is going on like usual. Turkish truck
drivers go in and out without problems (But it might have changed since few days due to
Turkey starting to bomb ISIS), so smugling petrol is easy, in the Iraquian part it's more easy
because when Turkey is a modern country with real border control and strick customs
regulation, Iraq has no realy a border between ISIS zone and the government controled zone,
sure there are a lot of military check points on the roads around the "border" but there are
here for military reason, looking for terrorists, bombs, etc but not to control all what is going
in and out by truck. Later in that documentary they were showing Jordanian truck drivers
stoped at the boder of ISIS zone by ISIS "custom agent" they had to pay a tax to continue
their trip to Bagdad, they got an official document saying that they paid the tax so in case of
control on some ISIS check point they won't have a problems...
I'm myself a Custom broker working for an international freight forwarder agent, we got not
much restrictions to export to Syria, only hight technology dual use products (satelite phone,
drone, etc... ) and luxury product (caviar, champagne,etc....) are restricted. ISIS territory
being officialy in Syria and Iraq any European company or private person can export almost
anything there, Turkish trucking company are very present in western Europe, I recently
loaded full trucks from France to Teheran in Iran and to Erbil in Iraq using turkish trucking
company, they can for sure arrange a load to Raqqa in ISIS zone if someone want, legaly with
all the documents (This might change a lot since Turkey "declared" the war against ISIS few
days ago.)

Cigarette black market on the rise

are using cigarette sales to launder profits from drug and human smuggling, according to a
report released Monday by the Government Accountability Office.

"ICE officials say that the same transnational criminal organizations that smuggle narcotics
and humans into the United States generate additional revenue streams by legitimately
purchasing low-cost duty-free cigarettes and other items in the United States and smuggling
them into Mexico, and sometimes back into the United States, for black market resale,"
reads the report, which is titled, "Tobacco Trade, Duty-Free Cigarettes Sold in Unlimited
Quantities on the U.S.-Mexico Border Pose Customs Challenges."

According to the report, criminal organizations purchase the cigarettes at duty-free stores,
located along the border. These are stores where shoppers are allowed to buy a limited
number of items, such as booze and cigarettes, tax-free, as long as they are leaving the
country. It's common for U.S. residents traveling to Mexico to buy some of these items at
duty-free stores, before leaving the country. But the GAO report indicates that criminal gangs
have found a way to make money off of the arrangement.

The report says that duty-free stores are failing to report high-volume customers, which
would alert federal agencies. Investigators found the number of high-volume sales at
Nogales duty-free stores rose from 66 in 2010 to 338 in 2015.

The Black Market in Human Beings

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How widespread is slavery?

Though outlawed around the world, slavery has made a disturbing comeback.

The slave trade is now the third largest type of illegal trade in the world, after

drugs and weapons, according to the U.S. State Department. Between 600,000

and 800,000 people are trafficked across national borders each year, the State

Department reports, with up to 17,500 of them entering the U.S. The

International Labor Organization estimates that slave trading generates $31

billion annually. The traders seem to be getting increasingly brazen: In June,

British authorities announced that "slave auctions" were being held in public

places in airports. "This is a new area," says Vernon Coaker, Britain's top

domestic security official. "It's something five, 10 years ago perhaps, people very

rarely talked of."

Why is human trafficking flourishing?

Experts point to several factors, including the end of the Cold War. The economic shocks

that accompanied the demise of the Soviet system thrust millions of Eastern Europeans into

desperate poverty and resulted in an explosion of criminal rings capable of selling women

into slavery. Globalization expanded that phenomenon worldwide. In a world with

increasingly porous borders, the poor are willing to leave their homelands in search of jobs..

Black market

A black market, underground economy, or shadow economy is a clandestine market or

transaction that has some aspect of illegality or is characterized by some form of noncompliant
behavior with an institutional set of rules. If the rule defines the set of goods and services whose
production and distribution is prohibited by law, non-compliance with the rule constitutes a black
market trade since the transaction itself is illegal. Parties engaging in the production or
distribution of prohibited goods and services are members of the illegal economy. Examples
include the drug trade, prostitution (where prohibited), illegal currency transactions and human
trafficking. Violations of the tax code involving income tax evasion constitutes membership in the
unreported economy.[1][2]
Because tax evasion or participation in a black market activity is illegal, participants will attempt
to hide their behavior from the government or regulatory authority.[3] Cash usage is the preferred
medium of exchange in illegal transactions since cash usage does not leave a footprint.
[4]
 Common motives for operating in black markets are to trade contraband, avoid taxes and
regulations, or skirt price controls or rationing. Typically the totality of such activity is referred to
with the definite article as a complement to the official economies, by market for such goods and
services, e.g. "the black market in bush meat".
The black market is distinct from the grey market, in which commodities are distributed through
channels that, while legal, are unofficial, unauthorized, or unintended by the original
manufacturer, and the white market.
Black money is the proceeds of an illegal transaction, on which income and other taxes have
not been paid, and which can only be legitimised by some form of money laundering. Because of
the clandestine nature of the black economy it is not possible to determine its size and scope.

Mercado Negro, so called "Black Market", in La Paz, Bolivia.

The literature on the black market has not established a common terminology and has instead
offered many synonyms including: subterranean; hidden; grey; shadow; informal; clandestine;
illegal; unobserved; unreported; unrecorded; second; parallel and black.[3]
There is no single underground economy; there are many. These underground economies are
omnipresent, existing in market oriented as well as in centrally planned nations, be they
developed or developing. Those engaged in underground activities circumvent, escape or are
excluded from the institutional system of rules, rights, regulations and enforcement penalties that
govern formal agents engaged in production and exchange. Different types of underground
activities are distinguished according to the particular institutional rules that they violate. Four
major underground economies can be identified:[3][5]

1. the illegal economy

2. the unreported economy
3. the unrecorded economy
4. the informal economy
The "illegal economy" consists of the income produced by those economic activities pursued in
violation of legal statutes defining the scope of legitimate forms of commerce. Illegal economy
participants engage in the production and distribution of prohibited goods and services, such
as drug trafficking, arms trafficking, and prostitution.[5]
The "unreported economy" consists of those economic activities that circumvent or evade the
institutionally established fiscal rules as codified in the tax code. A summary measure of the
unreported economy is the amount of income that should be reported to the tax authority but is
not so reported. A complementary measure of the unreported economy is the "tax gap", namely
the difference between the amount of tax revenues due the fiscal authority and the amount of tax
revenue actually collected. In the U.S. unreported income is estimated to be $2 trillion resulting in
a "tax gap" of $450–$600 billion.[6][7]
The "unrecorded economy" consists of those economic activities that circumvent the institutional
rules that define the reporting requirements of government statistical agencies.[5] A summary
measure of the unrecorded economy is the amount of unrecorded income, namely the amount of
income that should (under existing rules and conventions) be recorded in national accounting
systems (e.g. National Income and Product Accounts) but is not. Unrecorded income is a
particular problem in transition countries that switched from a socialistaccounting system to UN
standard national accounting. New methods have been proposed for estimating the size of the
unrecorded (non-observed) economy.[8] But there is still little consensus concerning the size of
the unreported economies of transition countries.[9]
The "informal economy" comprises those economic activities that circumvent the costs and are
excluded from the benefits and rights incorporated in the laws and administrative rules covering
property relationships, commercial licensing, labor contracts, torts, financial credit and social
security systems.[5] A summary measure of the informal economy is the income generated by
economic agents that operate informally.[10][page  needed][11] The informal sector is defined as the part of
an economy that is not taxed, monitored by any form of government, or included in any gross
national product (GNP), unlike the formal economy. In developed countries the informal sector is
characterized by unreported employment. This is hidden from the state for tax, social security or
labour law purposes but is legal in all other aspects.[12] On the other hand, the term black
market can be used in reference to a specific part of the economy in which contraband is traded.

Pricing[
Goods acquired illegally may exchange above or below the price of legal market transactions:

 They may be cheaper than legal market prices. The supplier does not have to pay for
production costs or taxes. This is usually the case in the underground economy. Criminals
steal goods and sell them below the legal market price, but there is no receipt, guarantee,
and so forth.
 They may be more expensive than legal market prices. For example, the product is
difficult to acquire or produce, dangerous to handle, or not easily available legally, if at all. If
exchange of goods are made illegal by some sort of state sanction, such as is often seen
with certain pharmaceutical drugs, their prices will tend to rise as a result of that sanction.
Even when the underground market offers lower prices, consumers still have an incentive to buy
on the legal market when possible, because:
 They may prefer legal suppliers, as they are easier to contact and can be held
accountable for faults;
 In some[14] jurisdictions,[which?] customers may be charged with a criminal offense if they
knowingly participate in the black economy, even as a consumer;
 They may feel in danger of being hurt while making the deal;[citation needed]
 They may have a moral dislike of black marketing;
 In some jurisdictions (such as England and Wales), consumers in possession of stolen
goods will have them taken away if they are traced, even if they did not know they were
stolen. Though they themselves commit no offense, they are still left with no goods and no
money back. This risk may make some averse to buying goods that they think may be from
the underground market, even if in fact they are legitimate (for example, items sold at a car
boot sale).
However, in some situations, consumers can actually be in a better situation when using black
market services, particularly when government regulations and monopolies[which?]hinder what would
otherwise be a legitimate competitive service. For example:

 Unlicensed taxicabs. In Baltimore, it has been reported that many consumers actively

prefer illegal taxis, citing that they are more available, convenient, and priced fairly.[15]

Traded goods and services[edit]

Some examples of underground economic activities include:
]
Illegal drugs[edit]

In the U.S., cannabis has been termed as a cash crop.

Main article: Illegal drug trade

From the late 19th and early 20th centuries, many countries began to ban the keeping or using of
some recreational drugs, such as the United States' war on drugs. Many people nonetheless
continue to use illegal drugs, and a black market exists to supply them. Despite law enforcement
efforts to intercept them, demand remains high, providing a large profit motive for organized
criminal groups to keep drugs supplied. The United Nations has reported that the retail market
value of illegal drugs is $321.6 billion USD.[16]
Although law enforcement agencies intercept in a fraction of the illegal drugs, and incarcerate
hundreds of thousands of wholesale and retail sellers, the very stable demand for such drugs
and the high profit margins encourages new distributors to enter the market without a decrease
in the retail price. Many drug legalization activists draw parallels between the illegal drug trade
and the Prohibition of alcohol in the United States in the 1920s.
Weapons[edit]
Main article: Arms trafficking
A tower of confiscated smuggled weapons about to be set ablaze in Nairobi, Kenya

The legislatures of many countries forbid or restrict the personal ownership of weapons. These

restrictions can range from small knives to firearms, either altogether or by classification
(e.g. caliber, handguns, automatic weapons, and explosives). The black market supplies the
demands for weaponry that can not be obtained legally, or may only be obtained legally after
obtaining permits and paying fees. This may be by smuggling the arms from countries where
they were bought legally or stolen, or by stealing from arms manufacturers within the country
itself, using insiders. In cases where the underground economy is unable to smuggle firearms,
they can also satisfy requests by gunsmithing their own firearms. Those who may buy this way
include criminals to use for illegal activities, gun collectors, and otherwise law-abiding citizens
interested in protecting their dwellings, families or businesses.
In England and Wales, certain categories of weapons used for hunting may be owned by
qualified residents but must be registered with the local police force and kept within a locked
cabinet. Another segment of the population who may purchase weapons on the black market are
individuals who are unable to pass the legal requirements for registration—convicted felons or
those suffering from mental illness for example. In a few jurisdictions, collectors may legally keep
antique weapons made incapable of being readily restored to a firing condition.
Illegally logged timber[edit]
Main article: Illegal logging

The illegal logging of timber has posed as an issue. According to Interpol, the illegal logging
industry is worth almost as much as drug production industry, in some countries.[19][20]
Animals and animal products[edit]
Main articles: Ivory trade and Wildlife trade

In many developing countries, living animals are captured in the wild and sold as pets. Wild
animals are also hunted and killed for their meat, hide, and organs, the latter of which and other
animal parts are sold for use in traditional medicine.
In several of the states within the United States, laws requiring the pasteurization of milk has
created black market situations involving the transport and sale of raw milk, and sometimes raw
milk cheese which is legal in a number of EU countries but banned in the US if aged less than 60
days[21]
Alcohol[edit]
Main article: Rum-running
Broken barrels of liquor after a police raid in 1925, in Elk Lake, Ontario

Rum-running, or bootlegging, is the illegal business of transporting (smuggling) alcoholic

beverages where such transportation is forbidden by law. Smuggling is usually done to
circumvent taxation or prohibition laws within a particular jurisdiction. The term rum-running is
more commonly applied to smuggling over water; bootlegging is applied to smuggling over land.
According to the PBS documentary Prohibition, the term "bootlegging" was popularized when
thousands of city dwellers would sell liquor from flasks they kept in their boot leg all across major
cities and rural areas.[22][23] The term "rum-running" most likely originated at the start of Prohibition
in the United States (1920–1933), when ships from Bimini in the western Bahamas transported

cheap Caribbean rum to Florida speakeasies. But rum's cheapness made it a low-profit item for

the rum-runners, and they soon moved on to smuggling Canadian whisky, French champagne,
and English gin to major cities like New York City and Boston, where prices ran high. It was said
that some ships carried $200,000 in contraband in a single run.
Tobacco[edit]
It has been reported that smuggling one truckload of cigarettes from a low-tax US state to a high-
tax state can lead to a profit of up to $2 million.[24] The low-tax states are generally the major
tobacco producers, and have come under enormous criticism for their reluctance to increase
taxes. North Carolina eventually agreed to raise its taxes from 5 cents to 35 cents per pack of 20
cigarettes, although this remains far below the national average.[25] But South Carolina has so far
refused to follow suit and raise taxes from seven cents per pack (the lowest in the USA).[26]
In the UK, it has been reported that "27% of cigarettes and 68% of roll your own tobacco is
purchased on the black market".[27]
Biological organs[edit]
Main article: Organ trade §  Illegal organ trade

According to the World Health Organization (WHO), illegal organ trade occurs when organs are
removed from the body for the purpose of commercial transactions.[28] The WHOjustifies these
actions by stating, "Payment for ... organs is likely to take unfair advantage of the poorest and
most vulnerable groups, undermines altruistic donation and leads to profiteering and human
trafficking."[29] Despite these ordinances, it was estimated that 5% of all organ recipients engaged
in commercial organ transplant in 2005.[30] Research indicates that illegal organ trade is on the
rise, with a recent report by Global Financial Integrity estimating that the illegal organ trade
generates profits between $600 million and $1.2 billion per year with a span over many countries.
Racketeering[edit]
Main article: Racket (crime)

A racket is a service that is fraudulently offered to solve a problem, such as for a problem that
does not actually exist, that will not be put into effect, or that would not otherwise exist if the
racket did not exist. Conducting a racket is racketeering.[31] Particularly, the potential problem may
be caused by the same party that offers to solve it, although that fact may be concealed, with the
specific intent to engender continual patronage for this party. An archetype is the protection
racket, wherein a person or group (e.g., a criminal gang) indicates to a store owner that they
could protect her/his store from potential damage, damage that the same person or group would
otherwise inflict, while the correlation of threat and protection may be more or less deniably
veiled, distinguishing it from the more direct act of extortion. Racketeering is often associated
with organized crime, and the term was coined by the Employers' Association of Chicago in June
1927 in a statement about the influence of organized crime in the Teamsters union.[32]
Transportation providers[edit]
Main article: illegal taxicab operation

Where taxicabs, buses, and other transportation providers are strictly regulated or monopolized
by government, a black market typically flourishes to provide transportation to poorly served or
overpriced communities. In the United States, some cities restrict entry to the taxicab market with
a medallion system that is, taxicabs must get a special license and display it on a medallion in
the vehicle. In most such jurisdictions it is legal to sell the medallions, but the limited supply and
resulting high prices of medallions have led to a market in unlicensed Carpooling/illegal taxicab
operation. In Baltimore, Maryland, for example, it is not uncommon for private individuals to
provide illegal taxicab service[15] for city residents.
Housing rental[edit]
In places where there is rent control there may be a black market for housing. For instance, in
the UK there is illegal subletting of social housing homes where the tenant illegally rents out the
home at a higher rent.[33] In Sweden, rental contracts with regulated rent can be bought on the
black market,[34] either from the current tenant or sometimes directly from the property owner.
Specialised black-market dealers assist the property owners with such transactions.[35] In India,
places like Chennai, Bangalore, Hyderabad, Mumbai, Kolkotta, and New Delhi where students
are coming from all over India, getting high rented PG (paying guests) or other forms of rented
apartments without any taxation or regulations.
Counterfeit medicine, essential aircraft and automobile parts [edit]
Main article: Counterfeit consumer goods

Medicines and essential aircraft and automobile parts (e.g. brakes, motor parts, ...) are
counterfeited on a large scale.
Street vendors in countries where there is little enforcement of copyright law, particularly in Asia
and Latin America, often sell deeply discounted copies of films, music CDs, and
computer software such as video games, sometimes even before the official release of the title.
A determined counterfeiter with a few hundred dollars can make copies that are digitally identical
to an original and face no loss in quality; innovations in consumer DVD and CD writers and the
widespread availability of cracks on the Internet for most forms of copy protection technology
make this cheap and easy to do.
Copyright-holders and other proponents of copyright laws have found this phenomenon hard to
stop through the courts, as the operations are distributed and widespread,[citation needed] transversing
national borders and thus legal systems. Since digital information can be duplicated repeatedly
with no loss of quality, and passed on electronically at little to no cost, the effective underground
market value of media is zero, differentiating it from nearly all other forms of underground
economic activity. The issue is compounded by widespread indifference to enforcing copyright
law, both with governments and the public at large. To steal a car is seen as a crime in most
people's eyes, but to obtain unauthorized copies of music or a game is not.[36] Additionally, not all
people agree with 'copyright laws', as it unfairly criminalises competition, allowing the copyright-
holder to effectively monopolise related industries. It also authorises copyright-holders to
use region-coding to discriminate against selected populations price-wise and availability-wise.
The comparison to car-theft, although common, is not truly analogous. Automobile theft results in
an item being removed from the owner with the ownership transferred to a second party. Media
piracy is a crime of duplication, with no physical property being stolen. Copyright infringement
law goes as far as to deem illegal "mixtapes" and other such material copied to tape or disk.
Copyright holders typically attest the act of theft to be in the profits forgone to the pirates.
However, this makes the unsubstantiated assumption that the pirates would have bought the
copyrighted material if it had not been available through file sharing or other means. Copyright
holders also say that they did some work for creating their copyrighted material and they wish to
get compensated for their work. No other system than copyright has been found to compensate
the artists and other creators for their work[citation needed], and many artists do not have any alternative
source of income or another job. Many artists and film producers have accepted the role of piracy
in media distribution.[37] The spread of material through file sharing is a major source of publicity
for artists and has been shown to build fan bases that may be more inclined to see the performer
live[38] (live performances make up the bulk of successful artists' revenues,[39] however not all
artists can make live performances, for example photographers typically only have a single
source of income that is the licensing of their photos).
Currency[edit]
Main article: Fixed exchange rate

Money itself is traded on the black market. This may happen for one or more of several reasons:

 The government sets ("pegs") the local currency at some arbitrary level to another
currency that does not reflect its true market value.
 A government makes it difficult or illegal for its citizens to own much or any foreign
currency.
 The government taxes exchanging the local currency with other currencies, either in one
direction or both (e.g. foreigners are taxed to buy local currency, or residents are taxed to
buy foreign currency).
 The currency is counterfeit.
 The currency has been acquired illegally and needs to be laundered before the money
can be used.[40]
A government may officially set the rate of exchange of its currency with that of other currencies,
typically the US dollar. When it does, the peg often overvalues the local currency relative to what
its market value would be if it were a floating currency. Those in possession of the "harder"
currency, for example expatriate workers, may be able to use the black market to buy the local
currency at better exchange rates than they can get officially.
In situations of financial instability and inflation, citizens may substitute a foreign currency for the
local currency. The U.S. dollar is viewed as a relatively stable and safe currency and is often
used abroad as a second currency. In 2012, $340 billion, roughly 37 percent[41] of all U.S.
currency, was believed to be circulating abroad.[42] The most recent study of the amount of
currency held overseas suggests that only 25 percent of U.S. currency is presently held abroad.
[43]
 The widespread substitution of U.S. currency for local currency is known as de
facto dollarisation, and has been observed in transition countries such as Cambodia[44] and in
some Latin American countries.[45] Some countries, such as Ecuador, abandoned their local
currency and now use US dollars, essentially for this reason, a process known as de jure
dollarization. See also the example of the Ghanaian cedi from the 1970s and 1980s.
If foreign currency is difficult or illegal for local citizens to acquire, they will pay a premium to
acquire it. U.S. currency is viewed as a relatively stable store of value and since it does not leave
a paper trail,[dubious  –  discuss] it is also a convenient medium of exchange for both illegal transactions
and for unreported income both in the U.S and abroad.[46]
More recently cryptocurrencies such as bitcoin have been used as medium of exchange in black
market transactions. Cryptocurrencies are sometimes favored over centralized currency due to
their anonymous nature and their ability to be traded over the internet.[47]
Fuel[edit]
In the EU, it is not illegal for a person or business to buy fuel in one EU state for their own use in
another, but as with other goods the tax will generally be payable by the final customer at the
physical place of making the purchase.[citation needed]
Between the Republic of Ireland and Northern Ireland, there has often been a black market
in petrol and diesel.[48][49] The direction of smuggling can change depending on the variation of the
taxes and the exchange rate between the Euro and Pound Sterling; indeed sometimes diesel will
be smuggled in one direction and petrol the other.[citation needed]
In some countries, diesel fuel for agricultural vehicles or domestic use is taxed at a much lower
rate than that for other vehicles. This is known as dyed fuel, because a coloured dye is added so
it can be detected if used in other vehicles (e.g. a red dye in the UK, a green dye in Ireland).
Nevertheless, the saving is attractive enough to make a black market in agricultural diesel. In
2007 it was estimated that £350 million was not gained in profit as a result of this phenomenon,
in the UK.[50]
in countries like India and Nepal, the price of fuel is set by the government, and it is illegal to sell
the fuel over the set price. Due to the petrol crisis in Nepal, black marketing in fuel has been a
common trend, especially during mass petrol shortage. At times, people need to queue for hours
or even sometimes overnight to get the fuel. On the other hand, the petrol pump operators are
alleged to hoarding the fuel, and selling it to black marketers. Black marketing in vehicle/cooking
fuel became widespread during the 2015 economic blockade imposed on Nepal. Even after the
economic blockade was eased, and petrol imports resumed, people are not getting the fuel as
they were supposed to and are resort to buying from the black market.

Organized crime[edit]
Main article: Organized crime

People engaged in the black market usually run their business hidden under a front business that
is legal.
Often, certain types of illegal products are traded against one another, depending on the
geographical location.[51]

Causes[edit]
Wars[edit]
Black markets flourish in most countries during wartime. States that are engaged in total war or
other large-scale, extended wars often impose restrictions on home use of critical resources that
are needed for the war effort, such as food, gasoline, rubber, metal, etc., typically
through rationing. In most cases, a black market develops to supply rationed goods at exorbitant
prices. The rationing and price controls enforced in many countries during World War
II encouraged widespread black market activity.[52] One source of black-market meat under
wartime rationing was by farmers declaring fewer domestic animal births to the Ministry of
Food than actually happened. Another in Britain was supplies from the US, intended only for use
in US army bases on British land, but leaked into the local native British black market.
For example, in the Parliament of the United Kingdom on February 17, 1945,[53]members said that
"the whole turkey production of East Anglia had gone to the black market" and "prosecutions [for
black-marketing] were like trying to stop a leak in a battleship", and it was said that official prices
of such foods were set so low that their producers often sold their produce on the black market
for higher prices; one such route (seen to operate at the market at Diss in Norfolk) was to sell live
poultry to members of the public, and each purchaser would sign a form promising that he was
buying the birds to breed from, and then take them home for eating.
During the Vietnam war, soldiers would spend Military Payment Certificates on maid service
Laws and regulations[edit]
A classic example of new regulation creating a black market is the Prohibition of alcohol.
Similarly when the law disappears, so does the black market, which is why of the arguments for
marijuana legalization is the elimination of the black market, and thus taxes from that economy
being used by the government.
Silk Road was an online black market and the first modern darknet market, best known as a
platform for selling illegal drugs. As part of the dark web,[7] it was operated as a Tor hidden
service, such that online users were able to browse it anonymously and securely without
potential traffic monitoring. The website was launched in February 2011; development had begun
six months prior.[8][9] Initially there were a limited number of new seller accounts available; new
sellers had to purchase an account in an auction. Later, a fixed fee was charged for each new
seller account.[10][11]

History[edit]
Operations[edit]
Silk Road was founded in February 2011.[16] The name "Silk Road" comes from a historical
network of trade routes started during the Han Dynasty (206 BC – 220 AD) between Europe,
India, China, and many other countries on the Afro-Eurasian landmass. Silk Road was operated
by the pseudonymous "Dread Pirate Roberts" (named after the fictional character from The
Princess Bride), who was known for espousing libertarian ideals and criticizing regulation.[3]
[17]
 Two other individuals were also closely involved in the site's growth and success, known
as Variety Jones and Smedley.[18]
Henry Farrell, an associate professor of political science and international affairs at George
Washington University, analyzed Silk Road in an essay for Aeon in 2015.[19] He noted that
Ulbricht created the marketplace to function without government oversight but found it difficult to
verify anonymous transactions. To sustain a steady stream of revenue, he started increasing
oversight to ensure low transaction costs. To do this, he added measures to ensure
trustworthiness with implementation of an automated escrow payment system and automated
review system.
In June 2011, Gawker published an article about the site[20] which led to "Internet buzz"[16] and an
increase in website traffic.[8] Once the site was known publicly, U.S. Senator Charles
Schumer asked federal law enforcement authorities to shut it down, including the Drug
Enforcement Administration (DEA) and Department of Justice.[21]
In February 2013, an Australian cocaine and MDMA ("ecstasy") dealer became the first person to
be convicted of crimes directly related to Silk Road, after authorities intercepted drugs that he
was importing through the mail, searched his premises, and discovered his Silk Road alias in an
image file on his personal computer.[22] Australian police and the DEA have targeted Silk Road
users and made arrests, albeit with limited success at reaching convictions.[20][23][24] In December
2013, a New Zealand man was sentenced to two years and four months in jail after being
convicted of importing 15 grams of methamphetamine that he had bought on Silk Road.[25]
In May 2013, Silk Road was taken down for a short period of time by a sustained DDoS attack.
[26]
 On 23 June 2013, it was first reported that the DEA seized 11.02 bitcoins,[27] then worth a total
of $814, which the media suspected was a result of a Silk Road honeypot sting.[28][29][30]
The FBI has claimed that the real IP address of the Silk Road server was found via data leaked
directly from the site's CAPTCHA,[31] but security researchers believe that the PHPlogin page was
manipulated to output its $_SERVER variable and real IP following site maintenance
reconfiguration.[32]
A darknet (or dark net) is any overlay network that can be accessed only with specific
software, configurations, or authorization, often using non-standard communication
protocolsand ports. Two typical darknet types are friend-to-friend[1] networks (usually
used for file sharing with a peer-to-peer connection)[2] and privacy networks such as Tor.

Uses[
Darknets in general may be used for various reasons, such as:

 Computer crime (cracking, file corruption etc.)

 Protecting dissidents from political reprisal
 File sharing (warez, personal files, pornography, confidential files, illegal or counterfeit
software etc.)
 To better protect the privacy rights of citizens from targeted and mass surveillance
 Sale of restricted goods on darknet markets
 Whistleblowing and news leaks
 Purchase or sale of illicit or illegal goods or services[14]
 Acropolis is a multisig darknet market that allows the sale of
recreational drugs, e-books, bitcoin security solutions, and services. It is not as big as
other major dark web markets but it offers a well-designed and fast site. It also has a
referral program. It is being referred to as a referral only market but we were actually
able to sign up for an account without having to use a referral link.
 Day Out at the Black Market in Venezuela

Scarcity and rationing in Venezuela leads to staple food being sold at markups on the
streets. (Jorge Galindo/Marketplace)

By Scott Tong

For three years in a row, Venezuela has reported the highest inflation rate in the world. The
reported rate is 186 percent, though independent estimates range from 400 percent (by
Johns Hopkins economist Steve Hanke) and 720 percent, a projection by the International
Monetary Fund.

According to the IMF, the country’s economy shrank 10 percent last year and is projected to
contract an additional 8 percent in 2016.

For more of Scott Tong’s reporting from Venezuela, visit Marketplace.org.

And Venezuela’s currency loses value by the day. A year ago on the black market (which
virtually everyone uses), one U.S. dollar bought 200 Venezuelan bolivars. Today, it buys
more than 1,000.

Imagine your grocery bill going up 17-fold. That would come out to something like:

 Loaf of bread: $32

 Dozen eggs: $18
 Pound of coffee: $85

This tries to capture the reality of Venezuela.

“It’s Common to Sleep in Line”

Noslen Ramos, a mother of three, queues up daily in Maracaibo.

(Jorge Galindo/Marketplace)

Single mom Noslen Ramos queues up daily outside state supermarkets in the
western city of Maracaibo, which is two hours from her home. She is a mother
of three and sells empanadas on the street for minimum wage. 

“The situation is critical,” Ramos said. “We need flour and rice. And coffee.
Right now, we have no food for lunch.”

Crude oil prices have crashed, and so has normal life. Around 20 people line
up in front of the store, but 200 more have been shooed around to the back
alley, ostensibly to hide the crisis.

“It’s common to sleep in line,” Ramos said. “If we come at five in the morning,
there’s already a big line. The people in the front, they probably slept here.”

 Venezuelan Crisis Hits Everyone, Soccer Stars Included

On any given morning, there is no guarantee anything will be on the shelves

when shoppers arrive. Even if items are available, each person can only buy
two of any item in a week, said Ramos’s sister Michelle Suarez.

“The problem is, our family has 12 people, Suarez said. “So two bags of rice
lasts just one day. So we go to other supermarkets and shop all day. Some
stores don’t take cash, but I don’t have a debit card. And the bank says there’s
not enough plastic to make more. 

If they don’t find rice here, they’ll buy a bag at a place where they know it’s
available – the black market. The price is steep: a one kilo (1.6 pounds) bag of
rice costs the equivalent of two days of pay. A large can of milk costs one full
week’s salary.

“It’s absolutely the worst ever,” said Caracas pollster and analyst Luis Vicente
Leon of the firm Datanalisis. “It’s amazing.  It’s very difficult to find any country
in the world right now that people cannot find essentials.”

Essentials products out on a table at the black market. (Jorge

Galino/Marketplace)

The Datanalisis index of scarcity, reflecting goods missing from store shelves,
exceeds 70 percent. The reasons are complex. It amounts to economic
multiple organ failure.

First, Venezuela hardly produces anything domestically, besides petroleum

(oil sales are 96 percent of the country’s import revenue).

RELATED POSTS

Price controls destroy the profit motive for domestic makers, who sometimes
sell their products for a loss. And the ruling socialist government has taken, or
expropriated, entire private companies.
  Venezuela Buys Weapons As Food Shortages Become the Norm

“They expropriate the majority of the sugar companies, and you cannot find
sugar,” Luis Vicente Leon said. “They expropriate coffee companies in
Venezuela, and you cannot find coffee. They expropriate Owens-Illinois, and
we cannot find packages.”

So Venezuela imports just about everything. But now there’s not enough oil
revenue to buy imports.

“We are mixing two different illnesses right now,” Luis Vicente Leon said. “The
illness coming from the intervention, and the impact of the oil market.”

And the country has printed so much money, inflation has soared. During my
trip, a national newspaper showed on the front page this graphic of the
country’s ballooning money supply.

“Venezuela’s money supply surpassed 4 billion bolívares in 2016, a 100-

percent increase.” (Marketplace)

Solution: the Black Market in Venezuela

Shortages drive anyone who can afford it to the black market. Mostly, bootleg
sales take place underground: buyers find sellers through friends, or through
closed chatgroups on Facebook or WhatsApp. It is illegal activity, after all.

But in Maracaibo, the black market is an actual place. The contrabando, as

sellers call it, sits on tables out in the open.

 Not Even Social Media Can Find Medicine in Venezuela

The odd part, to an American, is that this contrabando is available every day
at Aisle 3 in my local Safeway: flour, rice, coffee, Tylenol. I went in with
fixer/translator Yesman Utrera and photographer Jorge Galindo, on a specific
mission: to find infant formula for our driver’s baby. By the time we found two
cans to compare prices, both were sold.

At a couple points, I lost track of translator Yesman, when he started shopping

himself for coffee and medicine. “Got to get it where you can,” he said.

We didn’t linger too long: Yesman and Jorge noticed the illegal sellers were
nervous, and there is always a risk in Venezuela of violence and kidnapping.
Back in the car, we jotted down the prices, comparing the state regulated price
with the black-market price. Here’s that page from my notebook:
The average markup, by our quick-and-dirty math: 17 times.

 Not everyone can afford these prices, of course. An elderly woman selling plantains at the
market said she couldn’t find milk for her grandchildren at the official stores. And she
couldn’t pay the scalper price, so she cobbled together her own milk substitute – from
plantains.

“I open up the fruit and take the seed out – otherwise it hurts their tummy,” the woman said.
“I cook it and blend it. Then I cook it again for 5 minutes, stir and add a little sugar. It’s the
economy, you know?”

Back in the grocery line, the two sisters weren’t just hungry and frustrated about the
shortages and black-market prices. They were furious — at people they considered
profiteers in this crisis. Noslen Ramos said she assumed some of food missing from store
shelves slipped out the back door.

[adrotate group=”8″]
“Every day when I walk to work,” Ramos said, “I see trucks loaded with flour, sugar, rice,
shampoo, milk, driving to Colombia to resell them. I want to take a picture, but I’m scared
what might happen to me.”

Michelle Suarez said she once hitchhiked on a truck loaded with basic consumer goods. At
each military check point, she said, the driver bribed a soldier to go on through toward the
border.

Before we left, Ramos cited a Bible scripture about a famine prophecy coming true. Things
will likely get worse, unless oil prices miraculously skyrocket. By one estimate, the available
petrodollars to buy food and medicine will shrink in 2016 by two-thirds.

Black market
The best market in Cuba is black
About 90% of the Cuban economy is unofficial. Although official channels have a
very limited offer on their shelves, the black market provides almost everything. This
leads to an interesting error of judgment most tourists make. We think when we hear
that the average salary is about 20 $ and something costs 10 $ that the average
Cuban will have to work 15 days to buy it. Sounds logical, doesn’t it?

Well, thanks to the black market (la bolsa negra), things do not add up that way.

How to survive in Cuba

To live, Cubans in Havana need about 150-200 $ a month (outside Havana half that
amount). If your salary is 15 and you need 200… you have to make some money on
the side… The money you make “on the side” is your main income.

Every Cuban is forced to be active on the black market somehow. And they all are. This
renders the “official salary” a useless way of measuring prices and spendable income. Real
incomes are higher than you are told, and real prices are lower than you think.

Thanks to the black market in Cuba, people can survive, make money, buy goods and since
this is not in the official statistics, we make a very wrong estimation of the real situation.

Find the black market

For a tourist, this black market is sometimes hard to find. Yes, taking an illegal taxi is easy,
but finding an iPad or a fish tank will be very hard for you… Cubans are always on the
lookout for contacts that can supply them stuff or that can become customers for the stuff
they happen to sell. Their networks are very efficient, and that makes for a very effective
black market. To complicate things, not everything on the ‘informal’ market is black :-) 

STAGES OF EVOLUTION OF CUBA

Pre-Revolution, 1952–1958

In the 1950s, the Cuban people suffered under great oppression from the country’s military
dictator, Fulgencio Batista. The great majority of Cubans at that time lived in fear and
welcomed regime change. That change came from Fidel Castro and a small band of rebels
in 1959. Although the rebels were poorly armed, poorly trained, and by no means expert
military strategists, they had a distinct advantage: The Cuban people would get
behind nearly anyone who would oust the tyrannical Batista.

The Soviet Years, 1959–1989

Following the revolution, Mister Castro went to New York and appealed to the US
government to recognize his leadership. Unfortunately, Mister Batista had been a US
government toady and the Mafia was heavily invested in Havana hotels and casinos. Mister
Castro had destroyed those cosy relationships, and the US was unquestionably not going to
give him its seal of approval.

At that time, Mister Castro was not a communist. In fact, he followed no particular philosophy
of governance whatsoever. He merely sought power and was open to whatever offers were
on the table that might ensure it.

But he didn’t have to wait long. The USSR realized that Cuba was a real plum,
geographically, and, in trade for Cuba declaring itself to be communist, the USSR provided
considerable military support. The Soviets also offered to buy Cuba’s main export product—
sugar—at three times the going rate. Cuba then entered into an unsound economic system.
Although it would lose the productivity of the free-market system, the government would gain
the benefits needed by Mister Castro to solidify his power base. (It’s important to note that,
although political victimisation still existed, it was below what had existed prior to 1959.)

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Under the new collectivism, the possession of US dollars was punishable by up to two years
in prison. Foreign exchange stores were only for foreigners and the politically well-
connected. But whenever a government places a wet blanket on the free market, a black
market arises in proportion to the suppression of the free market.
It’s often been assumed that political oppression in the Soviet period must have been
severe, or the people would have overthrown the government. But this is not so. The reason
why Cubans were largely accepting of the system was that the black market functioned well.
Bureaucrats embezzled funds under an inefficient system, state-owned goods were routinely
stolen, underground entrepreneurships flourished and, in general, life was better than it had
been prior to 1959. In addition, literacy and health care became free to all, a fact that’s
cherished by Cubans to this day.

The “Special Period,” 1990–1999

But, with the collapse of the USSR, all bets were off. The false economy crashed with a
bang. Mister Castro euphemistically declared a “special period,” in which education and
health care would remain as major priorities, but poverty would become rampant. I can
remember that, in the 1990s, no dogs or cats were seen on the streets of Havana, as meat
was so scarce that a pet in the stewpot was considered a luxury.

Early in this period, a major attempt was made to create an international tourist market.
College professors, doctors, and engineers were pleading for permission to quit their
professions to become bus drivers, tour guides, and waiters. At that time, a tour guide or
hotel bartender might comment to me that he’d gain more in tips in one day than he’d earn in
a month from his government-provided salary as a surgeon or attorney.

But, as much as the government sought to oppress such exchanges, a new class arose in
Cuba. Those who received tips, or ran off-the-books businesses in tourism, soon were
moving into better homes, buying more and better goods for their families, and, most
importantly, growing the economy. As poverty was otherwise so dire, the “new rich” could
now afford maids, nannies, and gardeners—job descriptions that had fallen out of existence
in the Soviet era. The black market, in fact, became the dominant market and, in effect, an
ad hoc free market, as it operated without regulation and by supply and demand—the
cornerstones of any free market.

Anyone who embezzled state-owned goods, sold his paintings on the street, or rolled cigars
for tourists was living better than degreed professionals. So, why then, was this new class
not crushed by the government? Well, the average bureaucrat had the opportunity to provide
permission, look the other way, or divert state-owned goods and himself become one of the
new “rich.” The black market benefitted virtually everyone.
This brought about a profound change in the Cuban people. The older generation, who
remembered the Batista days, often remained dedicated to “the revolution,” but younger
Cubans were less interested in revolutionary platitudes and collectivist rhetoric and were
more interested in the new prosperity, no matter how moderate it was by international
standards.

The Recovery, 2000–2013

Conditions improved over the decade of the Special Period but expanded dramatically when
failed Venezuelan revolutionary Hugo Chávez came to Cuba in 1997. He was treated as a
hero on his arrival and was promoted unceasingly by Mister Castro. In gratitude, when
Mister Chávez became president of Venezuela in 1999, he provided much needed oil and
goods to Cuba and the Cuban economy.

This did not eliminate the black market. It enriched it. Like never before, the economy
expanded and, by the time Fidel Castro handed the reins of state to his brother Raúl, the
writing was on the wall. Over the years, such a large percentage of Cubans were operating
off-the-books businesses that they became the backbone of the economy. Increasingly, free-
market suppression was lifted to allow these cuentapropistas to operate legally, since, if they
were licensed, they could be taxed, thereby funding the state, which up until this time had
not been getting a cut from the black market.

The Renaissance, 2014–

After the younger Castro took office, more restrictions were lifted and soon, the
main legalized economy was being created by the cuentapropistas—the inventive
restauranteurs, the entrepreneurs who were running their own taxi companies, and the
owners of the casas particulares—private houses that were offered for rent to tourists.

Today, unlike so many countries in the world, the regulations are diminishing in Cuba rather
than expanding, and the economy is being driven by a black market that’s in the process of
being converted to an increasingly legal free market.

It should be noted that this was in no way brought about by the “historical” visit by US
President Obama. If anything, his visit was an attempt to ride the new wave of freedom now
being born in Cuba. His demands of Raúl Castro that he “play ball” with the US were
rejected and, as the US continues to decline under oppressive regulation and indebtedness,
Cuba will continue to rise out of its long collectivist slumber.
The takeaway here is that, whether it be Cuba, Zimbabwe, Argentina, or Venezuela, over-
regulation by any government causes a black market to be spontaneously created by the
people of a country. Eventually, even top government leaders come to rely on the black
market, as it works better than an oppressive system, and, at some point, the black market
becomes legalized and morphs into a free market.

And, in any country, the very lifeblood of prosperity is a free market. No amount of political
rhetoric or collectivist ideology has ever, or will ever, change that essential economic fact.

Editor’s Note: During any economic collapse, a handful of people still find a way to flourish.
They come out the other side wealthier, despite (and often because of) the chaos. Today,
we’re sharing their secrets in our Guide to Surviving and Thriving During an Economic

WEIRD THINGS SOLD IN THE BLACK MARKET

SUGAR,ALMONDS,LAUNDRY DETERGENT,RHINO HORNS,SEA CUCUMBERS

HUMAN HAIR,BABY FORMULA,HOLY WATER,FLIGHT ATTENDANT UNIFORMS

7 strange or illegal things you can buy on

the 'darknet'
Johannesburg - In the deepest, darkest recesses of the internet, where your Google
searches and normal web browsers don't go, underground markets for drugs,
weapons and other oddball or illegal goods are thriving.

This "dark net" is a part of the internet that the average person can't access without
specific software.  

A large part of this shadow internet deals with all manner of illegal activity, like
terrorist chatrooms where quick tips on getting uranium can be found.

What we have done is scoured some of the dark web's online markets to bring you a
list of some of the weird, wacky or downright illegal things that can be purchased.

Ross Ulbricht, the founder of Silk Road, which was at one stage the biggest online
drug market in the world, was sentenced by a US judge last month to life
imprisonment.

More often than not, the markets are used to sell drugs: from a little bankie of swazi
to liquid LSD or blocks of cocaine or heroin.
The majority of these dark online markets use Bitcoin (BTC), which is a type of digital
crytocurrency.

Note: News24 does not recommend searching for or purchasing anything on the
dark net. Most of the items mentioned here are illegal or just simply shameless.
1) A custom-made South African driver's license
".

2) Quaaludes (Mandrax)
One of the most widely abused drugs in South Africa, can now be shipped to
anywhere in the world... from South Africa.

4)  An AK47
Need the right weapon for your coup de tat or to rob a bank? An original Avtomat
Kalashnikova for $4 The world's most widely used assault rifle is also the must have
accessory for this season's faux communist revolutionary hipster - especially if it was
authentically used in liberating a small South American village. 

5)  Credit card details

For those who want to buy stuff for "free", while letting some other schmuck foot the
bill, a trove of credit card details will be your new best friend.

This way you can buy legal things illegally over the net, or maybe just go on a long
holiday while the real card owner sits in their cold and damp office doing silly stuff
like "working".

Just be warned, you could find out that you are the "silly patsy" whose credit card
details are on the list.

6) Twitter followers
Are you an up-and-coming journalist looking to get a book deal? Does size really
matter to you?

Or are you sick and tired of being lonely in the big bad world of social media, while
all your friends are more popular?

Have no fear! For only $25 (about R325) you can instantly receive 2500 Twitter
followers. If you really want to make waves, a mere $185 (about R2 300) will get you
50 000 followers.

Now everyone will think you are popular.

7)  A guide to change your identity

Are you on the run? Or are you tired with your life and want to mix-it-up a little? How
about creating a new identity?