Underground: The Road to Freedom?

Originally published at RevoluTimes on December 10, 2011

With real unemployment nearing a staggering 22% and prices rising throughout the country, many Americans have left the regular market in search of jobs and lower prices. They’re going underground. Many argue this undocumented “shadow” economy is on the rise due to the severe recession of the last few years. The Christian Science Monitor reported in 2009, it was estimated this unspoken market represented nearly 8% of the gross domestic product, amounting to almost $1 trillion. In 2010 it was reported the underground economy was growing faster than the ‘legitimate” economy, at a rate of 5-6% per year. Unfortunately, few realize why this is occurring and even fewer view it as a positive. Many would presume that such a trend would prove detrimental to any hope of economic recovery and some would even go further to the point of calling it criminal; when in reality it’s essential to recovery and the antithesis of a crime.

Contrary to what many would expect, the underground economy is much more than the drug trade or prostitution, (although neither of these are true crimes) but encompasses a multitude of goods and services provided without regulation, or being reported to the IRS. It’s no wonder why businesses and consumers are resorting to such methods when the burden of taxation and government regulations are considered. According to Americans for Prosperity, a recent studyfinds the costs placed on the average American family as a result of higher unemployment, higher wages and production costs due to government regulations are around $15,000. This should be no surprise when viewing the “informal” economies that have formed in the wake of Europe’s economic struggles.

Writes professor of economics, David Howden,

“While the Greek economy has the largest underground estimated at 25.2 percent of GDP, the PIGS countries (Portugal, Italy, Greece, and Spain) average 21.7 percent of their economic activity hidden from the official statistics. For comparison, 14.7 percent of German, and 7.8 percent of American output is estimated to be confined to the underground.”

Concluded Howden,

“The growth of unofficial employment is an entrepreneurial response to unnecessarily rigid labor markets and excess regulation.”

Though America isn’t quite facing the circumstances seen in Europe yet, we’re certainly heading that way; and regrettably, embracing the underground economy hasn’t caught on with most Americans—but it will.

Sadly, many still view the development of a marketplace outside the purview of government as a hindrance to society. In an article published by New America Media, Andrew Leonard writes,

“There are many different names for the realm where taxes aren’t paid, labor laws are ignored, and cash is king. But on at least one point most observers agree: the shadow economy — in the U.S. and abroad — is growing. And that’s not healthy. In a shadow economy, workers are often unsafe and ruthlessly exploited, while governments are deprived of crucial revenue — yet still forced to foot the bill for essential services.”

Such talking points are to be expected from left wingers but even many Republicans share these sentiments. 2012 Republican presidential candidate and so-called conservative, Michelle Bachmann stated in a Las Vegas debate several weeks ago that in regards to taxes, “everyone should pay something.”

But when did you become a servant of government? The notion that not paying taxes is a cost to government is not only fallacious, (as government has no wealth of its own, all expenditures are actually paid for either directly or indirectly by taxpayers) but deeply disturbing. To offer another perspective, when asked his thoughts on the fact that nearly 50% of Americans don’t pay taxes, GOP presidential contender, Congressman Ron Paul answered, “Good, we’re half-way there.”

Leonard’s conclusion that the underground economy’s growth “is not healthy” says it all. Rather than being excited to hear Americans are finding work and buying cheaper goods, he’s more concerned that the State isn’t getting what is owed to it; namely the product of your labor. It’s not only presumed that Americans want services provided by the State (despite the fact they also claim Americans must be compelled to pay for it by force), but furthermore that without the wise minds of Washington, the “necessary” functions of society would fail to exist. For this reason, you are duty bound to sacrifice your income for the “greater good.”

Left-wing statists often claim to be the protectors of the worker and consumer from exploitation; but how is denying someone work or depriving someone from a good or service beneficial? If I offer to pay someone below minimum wage or just in cash for landscaping; how are they being exploited? If a higher paying job were available to them, wouldn’t they have taken it? Wouldn’t forbidding them from earning an income altogether prove to be more harmful? Who was harmed? Did we not both benefit from this trade?

It would be nice to believe only the left has economic statists, but the right has abandoned its laissez-faire roots as well. Aside from its unlawful and futile attempts to legislate virtue by prohibiting the use of drugs or prostitution, many on the right seem to have adopted the dogma of left-liberals that they as Americans have a “right” to a job. This underlying belief comes to light under the guise of illegal immigration “taking American jobs”. To be sure, an individual benefiting from the welfare state without paying taxes is unjust to say the least; but the cause of this problem is the welfare state and taxation, not illegal immigration. For all their talk of revering free markets and property rights, conservatives seem to throw them out the window when it comes to the idea of illegal immigrants being hired for jobs because they’ll work for lower pay. Is this not the most fundamental principle of capitalism; being free to contract? No one has a “right” to a job. Yet again, government intervention in the form of minimum wage laws and payroll taxes drive businesses to look for employees under the table; as is their right. Though few conservatives would admit it, the concept that immigrants “steal their jobs” is predicated on the same collectivist notion as the left’s desire for the “greater good”. This is the notion that you are to serve the State and its stipulations.

In a truly free market of tax-free and unregulated trade, individuals come to agreements voluntarily only because the trade benefits both parties; otherwise why would they do it? This enables entrepreneurship, wealth creation, job opportunities and increased production. So why is this black market opposed so strongly by much of society, and particularly government?

It’s because it creates competition against government institutions or subsidized businesses that are politically-connected. A classic example of this is the case of American legal theorist, political philosopher and entrepreneur, Lysander Spooner who in 1844 began competing with the United States Post Office. The American Letter Mail Company successfully provided mail at lower rates and more efficiently, until the U.S. government forced Spooner to stop operations in 1851.

Most importantly however, the truly freed market is considered deplorable by the establishment because it undermines the authority of the State. If individuals not only have the right but the ability to trade and contract freely, the apparatus of government bureaucracy, corporatism and State dependency becomes irrelevant. The escalating police state and debasement of the dollar are leading many to look for alternative currencies and even some to providing their own forms of local defense and arbitration.

Rather than entrusting a system that deliberately plunders and persecutes its own people; a growing number of Americans are investing and trading in precious metals, and creating community-based solutions to resolving disputes and providing goods and services—without permission.

The ability to trade promotes independence, individual sovereignty and empowerment in a peaceful, productive and socially cooperative manner; and for those reasons it poses the greatest threat to the power of the State.

Anarchy in Carolina

There are few things in life that satisfy my thirst for relaxation like a day at the beach. This is probably no surprise. Who doesn’t enjoy a few hours in the sun with freshly soaked sand beneath their feet? My tastes have changed over the years of course. No longer do I crave an overcrowded shoreline crawling with underage drinkers on a Spring Break bender. No I prefer the calm of a secluded cove or scarcely visited coast, armed with only a cold brew in my hand and Bob Marley in my ear; hidden from the rigors of a regimented society.Though the seductive breeze of a summer afternoon at high tide never fails to woo me, it is the blissful experience of self-organization that wins me over.

As I walked down Kiawah Island Beach this weekend, (a short drive from Charleston, SC) I took in the seemingly chaotic nature of the scene. There was no central planning. Hundreds of strangers sorted their way along the water’s edge, until finding the perfect spot to settle in. Parents marched along carrying bags, coolers and chairs, with their kids in tow, as young couples strolled among them, holding hands. All colors, creeds and socio-economic backgrounds were co-existing peacefully; each seeking their own self-interest and yet building upon each other. 

New friendships were made as neighboring children began to build sandcastles together. Was I witnessing the beginnings of a future architect? Who knows? An elderly couple enjoying retirement gazes as young teens prance by, enthralled with youthful love and excitement; no doubt reflecting on their early years. And yet no one was directing any of this.

I finally found my place as I meandered through a maze of beach towels and smells of tanning lotion, when I noticed a sign posted just to the left with the warning:

NO GUARD BEYOND THIS POINT

At last, Freedom! I was even beyond the jurisdiction of the lifeguard, as were dozens of others. And still, no one was directing anything as children covered themselves in sand, only to brush it off and reach for a bag of chips. But who will make them wash their hands?! Who will balance out their meal with a side of broccoli?

Ships were visible in the distance, small crabs lurked under rocks, waves rushed in higher upon the shore-and still no one was regulating the amount of swimmers in the water. Birds flew in circles overhead, occasionally swooping in to scoop up some indiscernible grub, and no one seemed to harm them. But I saw no presence of the EPA. And worst of all, I was enjoying an ice cold Heineken and not a soul had bothered to ask for my ID.

How is it that I not only witnessed this apparent state of lawlessness thrive for more than two hours without so much as a baby crying, but that it occurs on a daily basis around the world among millions of people?

The fact is society is self-organizing. Some may object that it is only because of government that such pleasures as a day by the ocean is possible but of course this is absurd. Contrary to what we’re led to believe by the media and policy-makers in D.C., legislation and bureaucrats possess no magical powers. No matter how many decrees they may make, there are no incantations that can enforce them everywhere, all of the time.

 Certainly there are laws in existence that protect person and property, and indeed they should exist-but by no means must they be administered by the state. There are thousands of ‘laws’ issued by regulatory agencies such as the FDA, EPA, etc. but where were these enforcers this weekend? Why were there no gun fights and massacres instead? Because individuals have an incentive based on self-interest to cooperate with one another peacefully and respectfully.

None of us on that beach could have claimed property ownership over the particular spot we held, and yet everyone minded their own business. There was no lack of commerce, commerce flourished-not because of government-but in spite of it. The few rules that need be enforced for protection of person and property could easily be dealt with on a voluntary basis with competing private agencies.

 Consider the lifeguard; typically, a privately hired individual is hired to carry out this job. And unless someone actually needs assistance, he or she stays put on lookout. The lifeguard has far more important things to be concerned with than what you’re pouring into your plastic cup, how close you are to a neighboring family or whether or not you’re a licensed professional swimmer.

Now consider if a government bureaucracy were entrusted with carrying out the same position. Is it difficult to imagine the debilitating and obnoxious regulations and arbitrary rules that would be enforced? Virtually no one would want to go to the beach.

This is precisely why I believe so many people long for a weekend in the sun. Of course the natural beauty is a major factor but there is also an inherent desire to break free from the shackles of the structured and rigid world we’re accustomed to. Whether you’re seeking a week-long party with college students or a soothing release from your day job, guarded from the outside world-crashing waves will always provide a cure.

What keeps calling me back to that chair or towel on hot sand is not just that it’s pleasing to the eyes, but the euphoric sense of autonomy. While I love the scent of saltwater, and the slight burn of summer’s first tan, I love the peaceful and exhilarating serenity of freedom more.