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The Informal economy is a name given to Free Trade, unregulated by governments. It has virtues, ones which were applauded by Adam Smith, the author of The Wealth of Nations. His thesis was that economic progress depends on a trinity of individual prerogatives, to wit the pursuit of Self-interest [ or even perhaps Enlightened self-interest ], Division of labour & freedom of trade. He wrote this in 1776 and has been honoured in the breach ever since.
In fact free trade is subjected to industrial sabotage by governments world wide. Various regimes attack using police and legal systems. A major reason is Tax, their major source of finance. Another is the desire to meddle with peoples' affairs. It translates into a tool for imposing special interests. Health Fascists are one problem. They brought us Prohibition, a ban on alcohol to America. It was called the Noble Experiment among other things, one that created an industry. Speakeasies flourished. Criminals like Kennedy & Bronfman got rich.
The whole thing drove quality down as prices went up. The same is happening today with the War on Drugs, one that cost billions, killed thousands, brought war to countries, been used to destroy Liberty.
One crime they have invented too is Money Laundering. Governments force banks to spy on customers' transactions, to betray them so they can be prosecuted. One answer is using cash. Another is Hawala, the Islamic banking system which predates the Western system or Wadiah. Free traders are forced to use security measures which vary from the basic to the sophisticated. Bribing policemen is another technique. Big Business is different; it bribes politicians. Political party donations are the public face of manipulating the system.
Informal Economy ex Wiki
QUOTE
The informal sector or informal economy is a broad term that refers to that 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.Other terms used to refer to the informal sector can include the black market, the shadow economy, the underground economy and System D. Associated idioms include under the table and "off the books".
UNQUOTE
The Wiki does not mention free trade; instead it goes with the idea of government regulated free trade, which not the same thing.
Free Trade ex Wiki
QUOTE
Free trade is a policy by which a government does not discriminate against imports or interfere with exports by applying tariffs (to imports) or subsidies (to exports) or quotas. According to the law of comparative advantage, the policy permits trading partners mutual gains from trade of goods and services.[citation needed]]]Under a free trade policy, prices emerge from supply and demand, and are the sole determinant of resource allocation. 'Free' trade differs from other forms of trade policy where the allocation of goods and services among trading countries are determined by price strategies that may differ from those that would emerge under deregulation. These governed prices are the result of government intervention in the market through price adjustments or supply restrictions, including protectionist policies. Such government interventions can increase as well as decrease the cost of goods and services to both consumers and producers.[citation needed] Since the mid-20th century, nations have increasingly reduced tariff barriers and currency restrictions on international trade. Other barriers, however, that may be equally effective in hindering trade include import quotas, taxes, and diverse means of subsidizing domestic industries. Interventions include subsidies, taxes and tariffs, non-tariff barriers, such as regulatory legislation and import quotas, and even inter-government managed trade agreements such as the North American Free Trade Agreement (NAFTA) and Central America Free Trade Agreement (CAFTA) (contrary to their formal titles) and any governmental market intervention resulting in artificial prices.[citation needed]
UNQUOTE
- Trade of goods without taxes (including tariffs) or other trade barriers (e.g., quotas on imports or subsidies for producers)
- Trade in services without taxes or other trade barriers
- The absence of "trade-distorting" policies (such as taxes, subsidies, regulations, or laws) that give some firms, households, or factors of production an advantage over others
- Free access to markets
- Free access to market information
- Inability of firms to distort markets through government-imposed monopoly or oligopoly power
Politicians are driven by a desire to meddle, using other peoples' money which is why they do not like free trade.
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Updated on 20/11/2019 21:43