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When we hear the phrase “the economy,” often the first images that pop to mind are crisp bills being printed in a government treasury, or suited traders wheeling and dealing on the floor of a stock exchange, or a mall where suburban shoppers buy T-shirts and sneakers before grabbing a Cinnabon. But as journalist Robert Neuwirth pointed out at TEDGlobal 2012, while the luxury economy is responsible for $1.5 trillion a year, there are currently 1.8 billion people across the globe toiling in the informal, unregulated economy.
“If it were united in a single political system — one country, call it the United Street Sellers Republic, the U.S.S.R., or Bazaaristan — it would be worth $10 trillion every year. That would make it the second largest economy in the world after the United States,” said Neuwirth in his illuminating talk. “All of this is happening openly and aboveboard — there’s nothing underground about it. It’s our pre-judgment that it’s underground.”
For his book Stealth of Nations, Neuwirth spent four years researching what he calls “System D,” spending time with street hawkers, wholesale shopkeepers, smugglers, and sub-rosa import/export firms. To hear the details of what he found, listen to his talk. Below, check out six more talks that explore different corners of the informal economy.
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Vinay Venkatraman: “Technology crafts” for the digitally underserved
In most parts of the world, buying the latest iPhone isn’t an option. However, as designer Vinay Venkatraman noted at TEDxSummit, there is a growing economy of salvaged computer and phone parts, as well as tinkerers who know how to work with them, cropping up in markets around the developing world. In this talk, Venkatraman explains his work with “technology crafts,” using the parts and skills available in tinkerers’ stalls to make useful products — like a digital projector for a village school made from a lunchbox, or a medical triage device constructed from an alarm clock.
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Robert Neuwirth on our “shadow cities”
In this talk given at TEDGlobal 2005, Robert Neuwirth peeks into the enormous squatter cities growing in Kenya, India, Brazil, Turkey and many other countries around the world. Rather than simply places of squalor, Neuwirth says, these cities are also hotbeds of innovation, where people set up restaurants, markets, salons and clinics, effectively self-organizing without the constraints of government control.
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Steven Levitt: The freakonomics of McDonalds vs. drugs
Believe it or not, drug dealers don’t actually make a lot of money. They generally only earn minimum wage, says Freakonomics author Stephen Levitt, who, with the help of a fearless grad student, spent 10 years researching the financials of inner-city gangs. In this fascinating talk from TED2004, Levitt delves into the informal — and illegal — economy of crack cocaine.
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George Ayittey on Cheetahs vs. Hippos
In this impassioned talk from TEDGlobal 2007, economist George Ayittey gives a rousing critique of government corruption in Africa, which he says costs the continent $148 billion a year. Ayittey explains that there are three sectors to the African economy — the modern, the informal and the traditional. While aid pours into the modern sector, run by elites, the people of Africa — who overwhelmingly deal in the informal and traditional sectors — are left behind. Ayittey sees the future of Africa in the young movers and shakers who are focusing on improving Africa’s indigenous institutions like farms, markets and the ship-building industry.
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Misha Glenny: Hire the hackers!
Journalist Misha Glenny makes a plea at TEDGlobal 2011 for companies and governments to recruit hackers — who are often teenagers developing their moral compass — and guide them toward using their skills for productive ends rather than having to treat them as criminals later. Glenny stresses that the world’s most famous hacker collective, Anonymous, doesn’t mobilize for financial gain. However, he also describes the economy of “carders,” who use illegal online marketplaces to buy and sell credit stolen credit card details.