The Global Rise of the Informal Economy by Robert Neuwirth

In "Stealth of Nations," Robert Neuwirth offers a fascinating tour of System D, a world largely ignored by academics and government officials but a world familiar to anyone who has visited developing countries. Step outside your beachfront resort in Cancun and you can't miss it. Usually foreign visitors treat the participants in this unofficial economy with either pity or distrust: pity because they assume that System D workers are on the verge of starvation, distrust because familiar guideposts—regulations, licenses, credentials—are lacking.

Often neither prejudice is correct. Mr. Neuwirth introduces us to a woman named Jandira who for a decade has peddled coffee and homemade cakes to the unlicensed vendors at São Paulo's early-morning wholesale market for pirated movies. Her street-corner business, she proudly tells him, has enabled her to buy two cars and a house and to pay her children's fees at private school. Another of Mr. Neuwirth's sources, Chinese handbag designer Ethan Zhang, prefers to stay illegal. For him it's a matter of costs and benefits: "If I want to get a license, then I will need a bank account and an office in an office building." These are not people who lack the skills to survive through legal employment; they just see no good reason to join the legal economy...[continue reading]

Here, in the squatter community of Makoko, one of the waterside shantytowns of Lagos, Nigeria, Ogun Dairo smokes fish. Without a license, on land that she doesn’t own, she has created her economic future. The fish is imported from afar, caught in the North Sea, frozen and shipped to the cacophonous port city on the Nigerian coast.

After several hours in the concentrated smoke of her scorched sawdust --- the strong fumes have stained her wax-print dress, dulling the extravagant colors -- she packs the fish in boxes, readying them to be retailed for a tiny profit on the roadsides of this West African megacity.Economic development in Africa can be found all over, hidden in plain sight. It evades our gaze because our notions of growth and development are conditioned by Western rules. We expect development to be highly organized and regulated, to involve government, and to be anchored by big corporations. In Makoko, as in most of the developing world, the great engine of economic progress is different. It is unstructured, unofficial and, to most people, unfathomable.Academics call this sub-rosa sphere the informal economy, an attempt at objectivity that unfortunately links unlicensed markets with drug dealers and gun runners. But Ogun Dairo and the billions of other unlicensed businesspeople around the world are not criminals. So I propose a new name.Sculpted From French

In French, people who are particularly effective and self- motivated are known as “debrouillards.” Former French colonies have sculpted this word to their economic reality. People doing business on their own, without registering or paying taxes, are part of “l’economie de la debrouillardise” -- or, sweetened for street use, System D.