When Formal Market is Criminal, is Informal more Moral?

Quick thanks for a tip from a pal via Tweet, here's a thought-provoking article on Informal Trade in East Africa.  Kate Douglas writes in HowWeMadeItInAfrica.com

Wheelbarrows of dollars: Understanding informal trade in East Africa 

"The Hand That Will Rule The World—One Big Union"I'll leave you to read it, it's about the underestimation of the power and importance of "informal" markets in Africa, and how "off the books" trade makes African commerce look smaller than it really is.  That's not a huge surprise - how much of the growth in China's economy came from record-keeping of trade previously off the record?

The thoughts provoked here are based on my sadness and disgust at the levels of corruption I witnessed while living in Africa in the mid-80s.  I remember going through checkpoints in East Zaire (Dem Republic of Congo) which were set up by soldiers on dirt roads in the jungle.  Using a fallen tree to block the road, the soldiers would stop taxivans and demand bribes, while waving machine guns.

When "formal" is run by criminals, the moral market may be the informal.

The good news was that the Congolese soldiers only did this because they'd gone for years or months without pay.  Someone in Kinshasa was probably cutting the payroll checks, but they were winding up somewhere in the Swiss bank account of Mobutu Sese Seko, the aged dictator.  He paid for uniforms and guns, but he stole the payroll.  The other good news, I was told - the soldiers had no bullets, or if they had, they wouldn't waste one on a Peace Corps volunteer.
Mobutu vs. Leopold.  Discuss
“We should not be seeking to stamp out these trade flows. These trade flows provide a livelihood for millions of Africans and they are remarkably innovative, resilient and effective at getting goods to where they are needed.” - Edward George, EcoBank
Colonization was basically exporting nationalism - formal European borders - to societies which didn't yet draw property lines on uninhabited land.   Native Americans didn't get it, the Asians didn't understand it, the Mideast still struggles with the concept.  Lines on maps are a modern invention.

So as Europeans went nuts drawing lines on maps and sending men in wooden boats to put cloth on poles (flags) to coup fourre the lines they drew.  Europeans had guns and diseases and lots of bling, read about Cortez and Leopold, etc.  BullyBoys in Boats.

And all concurrent with modern liberal philosophy.

As if you can't have an EnLightenment without an EnDarkenment to put it in.

Criminals like Mobutu inherited "independence" and basically emulated the behavior NOT of the Englightenment folks back in Europe (who were anti-colonial, pro-independence, democratics) but of the BullBoys in Boats.  I've heard the theory that African tradition prefers "Big Man", the "lion", etc. to explain the sloth of social justice, judicial restraint, etc.   But what the colonized had first hand experience with was Cortez guys, who ran the colonies far out of sight of Europe's own system.

OK, That too oversimplifies.  The missionaries and the social development and international aid folks have been trying for many decades to make things work again, most of the western run agencies appear to be less corrupt than most of the African run ones.  I'm actually as fed up with "colonialism" blame deflection as I am with "formal economy" theory.

It's not about vicarious guilt or inherited innocence. It's just how damn bad the formal sector is.

How can you criticize "the informal sector" when the "formal" sector has been, for decades, run by criminals?

The informal sectorinformal economy, or grey economy[1][2] is the part of an economy that is neither taxed, nor monitored by any form of government. Unlike the formal economy, activities that are engaged in the informal economy are not included in the gross national product (GNP) and gross domestic product (GDP) of a country.[3] The informal sector can be described as a grey market in labour. - wikipedia 2015.11.21

People talk about "informal sector" like it's something shameful.  Douglas's article, good as it is, wanders around in descriptions of "illegal".  But what makes cash trade illegal is a corrupt and powerful government, like Mobutu's, which seeks to put cronies in charge and siphon cash from the good enough, hard working, largely and mostly honest African workers.  The "liability" of working outside the formal sector is "liability" in the latin sense. Sure, there is a lot of cultural inefficiency (saying yes when the answer is no takes a lot of getting used to), but loyalty and integrity are Africa's strongest currency, and those often work better in the "informal sector" than they do in the open.

When "formal" is run by criminals, the moral market may be the informal.

The counterthesis is that you can democratize the formal economy afterwards.  But the inefficiencies of the formal market make it more expensive, and most of the reasons it's more expensive are not product safety, unions, etc. Most of what makes it more expensive is corruption.

"Vicarious liability" is the juju or fetish of guilt-ridden descendants of both Enlightenment and BullBoy ancestors.   In the Ozarks, where I'm from, it's hard to really really know which 'uns of yor ancestor was fighting for the North or the South in the civil war.  I'd rather think my francophone kids descended from Decartes than from Leopold.  But it really doesn't matter what got us here physically, we are where we are and making do, and that's how ethics guides trade in Africa.  If you show integrity for your family, your tribe, etc., it's "brand value" which has better value than the "formal economy", and its these values that flow through the trade zones of Africa, values which do represent money... but like "goodwill" in accounting, they represent something difficult to account for until it is gone.

The total national GDP of EU countries, and its formal and informal (shadow economy) component per capita.[35]
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Just for giggles, I recently took a DNA test.  One of the things I was looking for some long lost Trail of Tears Cherokee DNA that my mom told me about, to help me sleep at night when I was 4 years old and she was telling me about the history of American and what a wholly rotten way the native Americans were treated.

My dad's mothers side of the family (my middle name Freeland) had been in the Indian Service, trying to correct the bullyboy bureaucracy of the calvary (yes, he left a written record, including letters to Washington outing colonels who raped Indians, he had to escape with his family to be reassigned to the Southwest after outing them in the Dakotas).  

My dad's fathers side were north Europeanish, hillbilly farmers, who became Ozark lawyers and historians.  Uncle Elmo Ingenthron's our most famous, wrote several histories on Osage Indians, Ozark civil war battles, etc.

My Mom's side was more hardscrabble.  Smart but lots more illiteracy.  Anyway without going into it, that's where the Cherokee was supposed to come from.

But none showed up in the DNA test.  I was only expecting a half a percent, based on the verbal history.  I know it's also possible to wash out, you might be half a percent blue eyed great grandmother but no blue eye genes to trace, it's more like coin flipping than diluting.

But here's the blog end surprise... the half a percent that DID turn up is sub-Saharan African.  I had .. no .. clue.  It's possible that a negro ancestor was "passing" or being passed as Indian. The only slaves recorded (in one of Uncle Elmo's books, Land of Taney) in the Branson area of the Ozarks was a woman who lived alone with one male "slave", nothing much written about her but he found it in the census records... Could be a relative?

Anyway my larger point is that tracing bloodlines to historical philosophers and bullies is pretty weak juju for vicarious liability or vicarious credit.  In another hundred years, there's going to be so much intermarriage and interracial evoloution that the idea that someone was "colonized" or a "colonialist" stock will be a joke when it comes to excusing behavior.  And the vicarious responsibility on used electronics and metals mined from Africa will be diluted out too.

Oh yeah, one more thing, I'm 99th percentile for Neanderthal.  Go figure.

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