By lambert strether
Here’s a TED talk by Robert Neuwirth on “The power of the informal economy.” Like most TED talks on political economy, the ideas are intriguing but, if true, are unlikely to impact any of the listeners in the audience. Nevertheless, clocking in at a little under thirteen minutes, it’s definitely worth a listen. As Neuwirth says (my transcription):
[NEUWIRTH]If [System D] were united in a single political system, one country, call it The United Street Sellers Republic, the USSR, or Bazarristan [laughter], it would be worth 10 trillion dollars every year, and that would make it it the second largest economy in the world after the United States.
So what is “System D”? From Neuwirth’s article in Foreign Policy:
System D is a slang phrase pirated from French-speaking Africa and the Caribbean. The French have a word that they often use to describe particularly effective and motivated people. They call them débrouillards. To say a man is a débrouillard is to tell people how resourceful and ingenious he is. The former French colonies have sculpted this word to their own social and economic reality. They say that inventive, self-starting, entrepreneurial merchants who are doing business on their own, without registering or being regulated by the bureaucracy and, for the most part, without paying taxes, are part of “l’economie de la débrouillardise.” Or, sweetened for street use, “Systeme D.” This essentially translates as the ingenuity economy, the economy of improvisation and self-reliance, the do-it-yourself, or DIY, economy [for example]. A number of well-known chefs have also appropriated the term to describe the skill and sheer joy necessary to improvise a gourmet meal using only the mismatched ingredients that happen to be at hand in a kitchen.
I like the phrase. It has a carefree lilt and some friendly resonances. At the same time, it asserts an important truth: What happens in all the unregistered markets and roadside kiosks of the world is not simply haphazard. It is a product of intelligence, resilience, self-organization, and group solidarity, and it follows a number of well-worn though unwritten rules. It is, in that sense, a system.
Now, in some ways this is a very attractive picture to me. It reminds me of how Unix is architected — *nix being the operating system that’s under the hood on my Mac, runs my server, and probably your server too:
There have, historically, been two competing models of operating systems development. There’s the UNIX mentality, of small pieces loosely joined. That is, you have a whole bunch of little, stand-alone applications that all work together to accomplish more complex tasks running atop a svelte kernel that doesn’t know — or need to know — about the pieces its running. Then you have the “everything and the kitchen sink” mentality, used by Microsoft. All versions of Microsoft Windows have huge dependency chains, and what is rightly called “Windows” is a dizzying amalgamation of interdependent pieces of software, none of which can do much on their own. If you’ve ever wondered why your Windows-powered web server included Windows Media Player, or Solitaire, that’s the reason: the “stuff” that makes up Windows is highly interdependent.
Now — and this not the Mac permathread, and not the Windows vs. Unix permathread, so please don’t go there, I’m just making a loose analogy! — the political economy in which I am deeply intertwingled today is a lot like the Windows operating system, in that its components are dizzyingly interdependent. I need a card from my bank to shop on the web; I need an ID from the DMV to vote; if I want to travel on the bus down to Boston without an ID I need to write a letter to the bus company in advance; I need to pay the town for a permit to run my minuscule business; if I put a sign up for my business someone has to measure it; and so forth. There are days, many days, when all of these requirements for compliance seem very much like including Windows Media Player in my server software.
By contrast, System D, “the informal economy”, like Unix, is “small pieces loosely joined”:
[NEUWIRTH] In System D, this is a store. And what I mean by that is that this is a photograph I took in Makoko, a shanty town in Lagos, Nigeria. It’s built over the lagoon, and there are no streets where there can be stores to shop, and so the store comes to you.
And as it turns out, her boat (one small piece) and her paddle (another small piece) are made in her neighborhood, and her fish (another small piece) comes from the North Sea, and ends up being sold “for a tiny increment of profit on the streets of Lagos.” Neuwirth doesn’t say where the blue buckets in which she keeps her fish come from, but I bet they come from another vendor just like her (and not from the Nigerian equivalent of Wal-Mart.
[NEUWIRTH] Something like this is totally open. It’s right there for you to find. All of this is happening openly and above board, there’s nothing “underground” about it. It’s our prejudgment that it’s underground. … [System D means] the econommy of self-reliance, or the DIY economy. Governments hate the DIY economy….
I observed something very like System D when I visited Bangkok. Bangkok has an awesomely dense economy of street food vendors. Philly’s Center City, for example, may have a cart on every other street corner, and they all sell hot dogs and whatever else they can throw on the grill; they seem to compete mostly on their relish. Bangkok, on the same corner, would have ten carts, all competing on different specialties of delicious food. (Thai culture is serious about food.) Here’s Sukhumvit soi 38 at night; the blur rather gives the flavor of intensely practiced biz:
Before night fell and the dinner hour which lasts until four in the morning began, I watched a food cart vendor do set up. She and her helper brought the cart, the menus, and the ingredients: The meats, the vegetables, the sauces. Everything else was “small pieces loosely joined.” A pickup truck came with bags of rice, which the vendors shouldered and took back to their carts. Propane tanks were delivered by motorbike. Sodas were delivered by another motorbike; ice by another. Even small change was a “small piece”; a man came up, my vendor handed him a bill, and he gave her back a neatly tied baggie of coins [arcane boomer reference].
Soi 38 embodies a gorgeous, dynamic commercial architecture, a model of stripped down, just-in-time relationships, and the food was astonishingly good. Granted, I was in trendy hi so Thong Lo; the system was the same elsewhere, but the food wasn’t so good, and I didn’t trust the ice. Granted, these vendors had permits, but the architecture is exactly as Neuwirth describes it: Elegant and very, very powerful. Imagine these transactions thrown out like a net over the entire city, and how fine the mesh would be!
And yet…
Let’s stick with Thailand, since I have no knowledge of Lagos at all. I don’t think Neuwirth’s characterization of System D as DIY is completely accurate, at least in the American sense of, say, a homeowner building their own deck instead of hiring a carpenter. To slip into campaign mode for a moment, “You didn’t do it yourself.” Rather, given a tiny bit of capital, you can bootstrap a number of well-understood components, each of which fits smoothly with the others (as if there were an API), into a tiny going concern. However, that means the barrier to entry is very, very low, and that is why Neuwirth speaks of “tiny increments of profit.” Further, the real value of the store, given the low barriers to entry, isn’t in the cart, the recipes, or even in the regular clientele: It’s in the permit that gets them their slot on the street. (Location, location, location.) That permit is a rent, and where you have rents, you have rentiers. I would be very surprised, for example, if Neuwirth’s waterborn store owner were not under the protection of the local big man, exactly as she would be in Thailand. And the words “rentier economy” just don’t have the “carefree lilt” and “friendly resonances” that “System D” does.*
Rentier economy, of course, brings me right back to the United States. I’ve always wondered — and for some reason, our famously free press hasn’t covered this story — just what the 17.9% of the American population that’s disemployed is doing to survive. Surely, some of them have entered System D. (Bloggers who take contributions via PayPal are part way there already, as are eBay resellers. And as are other indviduals who do work under the table, become growers, or manufacture meth. Neuwirth celebrates the poet Alan Ginsberg for arriving in New York with nothing but his “good looks.”
To negotiate one’s affection: That too, is débrouiller.
NOTE * For example, was I the only one who wondered if the exchange of a bill for coins also included a “tiny increment” of money laundering?
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‘Philly’s Center City, for example, may have a cart on every other street corner, and they all sell hot dogs and whatever else they can throw on the grill; they seem to compete mostly on their relish. Bangkok, on the same corner, would have ten carts, all competing on different specialties of delicious food.’
Probably in Philly, as in NYC, the ‘one every other corner’ rule for food carts is enforced by municipal permit. Whereas the ten-carts-per-block phenomenon in Bangkok is also enforced so that vendors can keep their slots, but probably by the vendors themselves or an outsourced ‘security’ arrangement.
In Buenos Aires, ‘Système D’ features chefs serving private dinners for 10 to 20 people in their apartments. There is no advertising — you call them to make reservations, and receive a multi-course prix fixe meal and meet interesting people. And for the chefs, no need to navigate the nightmarish municipal permitting bureaucracy.
One of the best novels ever about BKK is The Windup Girl by American author Paolo Bacigalupi. It’s set in a near-future Thailand affected by global energy and food shortages. Bacigalupi knows his way around Bangkok, and his acute observations of the ethnic mix are well reflected in his vivid characters.
http://www.amazon.com/The-Windup-Girl-Paolo-Bacigalupi/dp/1597801585/ref=sr_1_sc_3?ie=UTF8&qid=1347190425&sr=8-3-spell&keywords=bacigulupi
An Argentine chef I met in Costa Rica confirms your observation.
I met an American chef that makes house calls. Or more likely McMansion calls.
…we don’t call it catering anymore?
He was “upscale”, but you are right. There is that other kind too.
Here is a group of Philly gypsy food trucks. They are organized and move around individually, and on occasion, in groups as part of neighborhood street fairs. They fed about 45,000 paid music fans in front of the Art Museum during a recent MADE IN AMERICA concert.
http://www.phillymfa.com/video-meeting.html
http://www.uwishunu.com/2012/08/night-market-returns-to-germantown-avenue-in-mt-airy-this-thursday-august-16/
You won’t see this and other kinds of street economy, it is not visible from Amtrak or I-95 etc. but people for years have labored to earn a living, outside of the direct view of the taxman, the business community at large. And of course, women and more today than before, men, work to make homes for their families, without pay, for others which include pay for cooking, sewing, child care, repairs, dealing with the paper bureaucracy for those not internet savy or patient enough to deal with.
So, you have an explicit economy and an implicit economy, with a constitutional looking glass between them, and the more the explicit side tries to order out the implicit side, the more the npv window becomes a mirror. on the explicit side, above the line is the capital rail. below the line is the middle class rail, in a rail of rails…
so, you have a fulcrum, which is a battery, which is a ff reactor, which is either in time or on time…
so, on one table is fish, on another is a fishing pole, and on another is various parts, recycled…
If you are a banker, the whole world is a bank, and if you believe the fed is all powerful, the fed is all powerful, but if you are not and do not..
what happens when the front tail risk/reward is removed from the certified perception in best business practice? what happened to the corporate minority under the constitution?
Sudhir Venkatesh’s (sic?) book “Off The Books” is an intimate look at an American black market economy. It details several years he lived as a sort of street anthropologist in a Chicago ghetto. Very much worth the read: compassionately written without a hint of sentimentality.
The Bears, the Salmon, the Rats, the Beavers the Geese: none of those were invited to the Convent Shion.
But, they survived …
The fish is from the North Sea? Isn’t that a long way away? How does it get to Lagos?
>>The fish is from the North Sea? Isn’t that a long way away? How does it get to Lagos?<<
In a modern steel trawler equipped with GPS, Loran, and Sonar with an onboard processing, packing and refrigeration plant. Try *that* in an informal economy. Hell, even the plastic bucket presents a major challenge.
I bet that fish lady has a cell phone too, and I'll bet her village has a few solar panels and maybe even a diesel generator that's waiting for parts.
Listen to the video, and you’ll hear how they handle cell phones. System D, naturellement.
And just to close the loop, I once met a guy whose job was welding things down on giant mining trucks. Steel plates over the windows, spot welded. Likewise the doors, fuel cap, hatches, basically anything that could be removed. Coincidently, the trucks were shipped to Nigeria and the reason for all that welding was so they’d arrive in one piece. They had the worst time with tires though. Seems people liked to cut sandals from the treads, so those had to be shipped separately with a guard.
Question: Does the informal economy supplement the formal, or does it merely cannibalize it?
I think I want to review some old System D movies, “Mad Max”, “A Boy and His Dog”, “Zardoz”, etc… before I conclude that System D is the preferred way “forward”.
In “A Boy and His Dog”, IIRC, the dog was telepathic (and a tad radioactive – that happened in movies back then) which solved the whole cellphone issue.
Maybe not preferred, but human. Historical.
And, perhaps, inevitable.
Did I mention unstoppable?
Hence, the Russian Mafia.
Exactly.
Somewhat lacking for those interested in poverty and/or market ideologies and economic development.
Isn’t this the ‘informal sector’ in English?
Isn’t debrouiller about ‘managing or doing something with some skill or experience or ingenuity or knowledge…or even without any idea to begin with but somehow managing the thing/business/project/repair’ in sense of ‘handyman’ or ‘jack-of-many-trades’…besides just DIY?
(Informal–Meaning outside the ‘regular’ or formally taxed/registered businesses and, naturally, governments try sometimes to control/tax/monitor and/or protect consumers from bad practices that can harm them.)
What’s the point of this talk…I was writing this while listening and just got the celebratory aspect of considering these in it with/without any bureaucrats. Am I wrong?
The people who are in or might join this sector are often the targeted populations for the wave of microfinanance evangelists….
What about the Bateman critique of this as a very limited or even dead-end economic development strategy?
And about cooperation as a major element of many kinds of market systems see Charles Lindblom’s “The Market System” that celebrates this aspect of markets, balancing it with pointing out the problems with decentralized voluntary market systems that have an oligarchy on the other end of the scale working to create an economic-political elite amalgam that may be destroying democracy.
In Nigeria this inequality between top and bottom is destroying chances for substantive democracy to develop. Not unusual of course.
If I can suggest something respectfully…this talk could improve with a broader range of reading by Mr. Neuwirth about informal sectors. Debrouille-toi, s’il vous plait! A la francaise, maybe look at the French-created post-autistic economics movement that critiques economists’ excessively mindless celebrations of free markets…esp. those mainly dominated by elites, i.e. the other side of the story of ‘entrepreneurialism’.
Well, however you put it–this is where we are going if for no other reason that regulations and laws are losing their moral authority. If people at the top can commit practically any crime they want to then where is the moral imperative to go by the rules? Only enforcement will keep people in line–and, as economies become more austere enforcement becomes too expensive. I believe we will, eventually, all be in an “alternative” set of networks as yet undefined and this will make up the new neo-feudal punk-sci-fi economy we’re headed for.
What would the response have been if, instead, the movement had been called “post-gay economics,” or “post-Latino economics”?
Here is a letter from 2008 to the editors of the Post-Autistic Economics Review on the issue:
http://www.brocher.com/Academic/pae.htm
And here is something about how dire the situation is in France re: autism and autistics:
http://www.wrongplanet.net/article421.html
See also:
http://www.bbc.co.uk/news/magazine-17583123
http://shamefuldocumentary.com/
Yeah…. very…..
Yeah, that name is obscenely offensive. Autistic people, who are not alert to social cues, actually do much *better* economics than the current crop of *brownnosers* who do whatever they think will get them ahead.
I’d like to see post-brownnosing economics.
It seems to me that this aspect of what make the economy on the whole,is just a “norm”.I would even say it is something Americans have always done..from the immigrant kitchens to the frontier supply stores to the mechanic doing side jobs to the moonlighting teacher….or the kid who sells dope to pay for his head bag.We all do it in some form or some way…just as these transactions are small and outside that which is counted,they happen all the time….Some operations aren’t even thAt small.It seems though in the thinking about what makes an economy,these aspects are just assumed,and being smallish,are not worth trying to keep track of for taxation..
For people just struggling to get by,to keep up,the prospect of making something more substantial is just a pipe dream.first things first,you do what you have to to survive now.the universe keep anything from working out anyway,so why not do whatever works for now.this is life on the edge.there is less than any gaurentees.Its all likely to end poorly,someday..but for now,carpe diem.
In a reasonable economy,those with easy lives and good jobs should let these people be.the big money should take care of the state.if it can’t,too many people are skimming off too much off the top.
And that is where the eyes ought to be looking.
And this is how the free market philosophers plan to avoid taxes altogether. Human enterprise is not a new phenomenon. Nations are a new phenomenon. Political organization toward achieving organized goals. This isn’t disentanglement, it’s total disorganization. Hey cool – soon the water and hose vendor will come by and sell you a nice 5 minute shower and an exchange of dirty pots and pans for clean ones… once a week. And just think of all that untapped revenue the big water corporations are going to make on all these flea infested little entrepreneurs. What this world needs is something else. We need lots of “low productivity jobs of high social value.” Recycling could produce many of them – but not this way.
Lambert,
Seems to me your worthwhile post is really about and could lead to a broader series that discusses steps one might take at the individual/small group level to disintermediate and minimize the role of the rentiers, their sistema, and perhaps even their “money” from one’s life economically, yet generate sufficient resources to live a fulfilling, healthy and ethical life if one so chooses. Big challenge. Thank you.
Robert D. Kaplan’s “The Coming Anarchy” tipped their hand. It’s now “Mission Accomplished” for the .01% + .99%Agency: they are inside the moated castles and the “stretch limos” and we have been kicked to the curb to struggle, starve, and die APART from them. Expect heroin by the ton: “Opium Wars” Redux, as you starve and die a slow, miserable death while your sons/daughters get reamed.
Think Mexico City. Think Mumbai. “America the Beautiful.” Think: Resources.
“THE IRON HEEL” by Jack London. Again.
Reminds me of a terrific BBC documentary of a couple of years ago called “Welcome to Lagos”. You can still watch it on Youtube, if you have a better download speed that I do.
But I’m not sure that System D is what the participants really want. It also reminds me of the movie “Empire of the Sun”, and the POW-camp economy sketched there. People traded and improvised and got by because they had to, not because that was their ideal economy. All this “hungry” and “lean” and “flexible” talk reminds me of the morality of the slave-driver.
TED seems to me to be very hip and subtle propaganda for the world the 1% want us to live in. Call it a hip French name all you want–it’s just a 3rd World economy. I for one want my first world economy back and I am not interested in re-branded 3rd world poverty. Of course they are re-branding the race to the bottom. It’s what our “masters” do.
Bascially, the informal economy — System D — is what arises naturally when the formal economy, as run by the formal political powers, breaks down and stops serving its primary purpose, i.e. supplying everyone with a decent standard of living and a fair set of rules
It’s what people resort to when the “formal economy” has failed.
*Everyone* prefers a formal economy which *works*. By sabotaging the rule of law *and* denying the middle and lower classes any chance of getting ahead, the current elties have *guaranteed* that the informal economy will be preferable.
Once the elites are beheaded by some clever warlord, that warlord will start working on establishing a working formal economy, a slow process of formaliziong the existing informal rules, and then reforming them,… and people will love the warlord for doing so, for establishing the rule of law. This is the cycle of history — the law-giver is loved because he replaced a messy chaotic period, but the messay chaotic period was preferable to the corruption which came before it.