Stunning New European Strategy Against the Shadow Economy: Study It More

Julien Jorge

Yet another European chattering society chimes in with a report on the shadow economy—business and work performed out of sight of the authorities to escape burdensome taxes and intrusive regulations. This time, the European Economic and Social Committee, "a bridge between Europe and organised civil society," complains that the shadow economy has become so big, so accepted, and so integral to life in European countries. The solution? Well, it's certainly not to lower taxes and repeal regulations. Instead, the EESC wants to study the phenomenon some more.

The group leads its press release on the new report with its complaints:

The EESC has dedicated yet another opinion to combating the shadow economy and undeclared work. Both topics are highly delicate, not least because their extent and impact on the economy differs enormously among Member States and regions, ranging from below 10% to more than 30% of total output. They also vary considerably from one economic sector to another. 

"Unfortunately too many people still view the shadow economy as a normal part of society and lack any remorse about using the 'black market' either to hire/provide cheap workers or buy/sell goods while circumventing taxation. Furthermore, many countries still lack a clear stance on the shadow economy and undeclared work ", says Stefano Palmieri, rapporteur for the own-initiative opinion 'A strategy against the shadow economy and undeclared work'.

The EESC's recommended solution is "adopting the Italian methodology to measure the scale, impact and development of the shadow economy and undeclared work."

Well, that'll learn those bureaucrat-dodging entrepreneurs.

The report itself, A strategy against the shadow economy and undeclared work, has yet to be translated into English, but a perusal of the French version (Une stratégie de lutte contre l'économie souterraine et le travail non déclaré) using my rusty language skills reveals little more than verbiage and charts expanding on the above. The complaining does sound prettier in French, though. The charts are sourced from researchers like Friedrich Schneider, who specializes in studying shadow economic activity. Which is to say, this is not an entirely neglected field of study.

That's fine. Better to have the indignant busybodies unnecessarily crunching numbers that have been crunched many times before than actually hassling people trying to make a buck without being strangled by red tape.

Find a full range of Reason's reporting on issues economic and shadowy here.

Comments

[Rich]

"Unfortunately too many people still view the shadow economy as a normal part of society and lack any remorse about using the 'black market' either to hire/provide cheap workers or buy/sell goods while circumventing taxation."

"Unfortunately" for whom, exactly?

[SweatingGin]

Apologies if this has been covered elsewhere, $dayjob got in the way of H&R, as it does occasionally.

Orwellian text message in Ukraine

It looks (from a live stream a couple of hours ago) that they're in full revolution with barricades, fires, etc.

"Dear subscriber, you are registered as a participant in a mass disturbance."

Doesn't that pretty much force the protestors to take it all the way? No power sharing agreement or anything, it's not a disturbance anymore, now it's a revolution. The state/telecom told the protestors "I know where you live". What other option is there besides winning at that point? Win, or gulag.

Am I over-reacting to this?

[Warty]

No, that's pretty much an open declaration of war.

[Sevo]

"Am I over-reacting to this?"
Dunno. When the USSR collapsed, various E-Europe thug govts made threats they were (finally) unwilling to enforce.
Dunno about the Ukrainian govt.

[jesse.in.mb]

It depends on if enough of them see it that way to tip the scales. If enough people get skittish and go home it won't matter.

[KalkiDas]

The commie chick Natasha comments on that article that the problem is capitalism. She believes in "helping" people, albeit mostly likely using other people's money.

[Redmanfms]

I wonder if this has something to do with why Groovus went missing in action?

The protests were just starting when he disappeared last year, maybe they were/are a whole lot worse than we think.

Anybody in email contact with Groove?

[The Rt. Hon. Serious Man, Visc]

"Unfortunately too many people still view the shadow economy as a normal part of society and lack any remorse about using the 'black market' either to hire/provide cheap workers or buy/sell goods while circumventing taxation...

This is hilarious. These European bureaucrats cannot understand how people are able to work together and accomplish stuff without government sticking its hand in somehow.

But it is also very disturbing that they obviously regard such behavior as anti-social and view themselves as the embodiment of what society is. If they weren't so incompetent it could lead to some scary outcomes.

[sarcasmic]

Freedom means asking permission and taking orders.

[The Rt. Hon. Serious Man, Visc]

What kind of monster doesn't feel remorse for bypassing laws and regulations solely intended to make-work for bureaucrats and justify the expansion of the state in the economy?

[sarcasmic]

What kind of uppity peasant does work and then doesn't report it to his masters?

What kind of uppity peasant buys or sells goods without giving his master his cut?

I'll tell you! An uppity one!

[Episiarch]

The gayest monster since gay came to Gaytown?

[sarcasmic]

Don't you mean Provincetown?

[All-Seeing Monocle]

Freedom means asking permission and taking orders.

I read that as femdom, in which case it's quite a bit more accurate.

Geez, I need to watch more porn. Yeah, that's right, I said MORE.

[sarcasmic]

You don't understand. It's all about responsibility. True freedom is freedom from responsibility.

When you ask permission, then the person who gives permission is responsible.

When you obey orders, then the person who gave the orders is responsible.

Never mind that people in government never take responsibility for anything.

[MikeP]

A strategy against the shadow economy and undeclared work

Arbeit macht frei?

[RishJoMo]

Now that sounds like a solid plan dude.

http://www.AnonWork.tk

[Rufus J. Firefly]

Over the last 25 years or so of my reading about and visiting Europe one thing remained a constant - Italy's (and France for that matter) black market was always estimated to be anywhere from 35% to 50% of GDP.

[Sevo]

Are these amounts included in the GDP calcs or are they in addition to the claimed GDP?

[Rufus J. Firefly]

From what I understood calculated separately. Could be wrong.

[Sevo]

If it's outside the 'official' GDP, it has the attraction of not being distorted by government spending.

[Aloysious]

Let me see if I can think like a leftist:

Massive amounts of law and regulation created a shrinking of the official economy, and a growth of the shadow economy... I give up, the problem is too difficult. We need more laws and regulations to control those shadow economy people.

Job well done, leftists. Job well done.

[sarcasmic]

Let me see if I can think like a leftist:

Let me help.

First you must conflate intentions with results. Since no one writing these laws and regulations intends to shrink the economy, there is no way that that could possibly be the result. How could it? It wasn't their intent.

(Notice how when leftists point out the results of their opponents policy, they always attack the intentions? Because intentions are all that matter. To admit that their opponents may have been well intentioned with bad results is to admit their team could do the same. Not allowed. Must. Focus. On. Intentions.)

hth

[Rufus J. Firefly]

I notice the book 'The Shadow Economy' pegs Southern Europe's BM at 20-30%.

[Dweebston]

Unfortunately too many people still view the shadow economy as a normal part of society and lack any remorse about using the 'black market' either to hire/provide cheap workers or buy/sell goods while circumventing taxation.

You mean to suggest that entrepreneurial self-preservation trumps your fictitious, heavy-handed civil conscience? Unthinkable!

Furthermore, many countries still lack a clear stance on the shadow economy and undeclared work.

They would collapse, you tit. Why do European economists remind me of nothing so much as Keynes himself advocating for a world economic order forcing all citizens to knuckle under?

[cavalier973]

Don't you understand? When there is unreported work being done, it means that workers are being exploited by greedmongering businessowners! How can we know if they are being paid a living wage and whether or not they have adequate health care if we cannot monitor their work?

[BigT]

You are previewing the US Medical System circa 2022.

[GILMORE]

I was reading stuff about the MMT/Chartalist theory that seems so popular now with proggy-'llectuals. It seems to be the basis for a lot of these neo-communist types thinking as well. It strikes me as more an 'accounting' gimmick than economic theory, but whatever. basically, they think political control of the Fed would allow for near-unlimited money printing, and debt/deficits are basically a meaningless fiction.

http://rogueeconomistrants.blo.....alism.html

One smart fellow seemed to pop their bubble with a concise point =

"Such printing would fail the market test, and as such the monetary unit would only retain its value through ever increasing resort to force by authorities. Thus MMT well explains a police state."

I see this same thread here re: Europe. A 'control economy' necessarily produces incentives to escape control, and the 'controllers' increasingly see a need to reach deeper and deeper into human activities to maintain their blessed system's viability. inevitably, Police State. Albeit, in their view, a *benign* one.

remember the communist? He doesn't *want* Gulags! Its just those pesky people who don't *play along* who demanded them...

[Sevo]

"Such printing would fail the market test, and as such the monetary unit would only retain its value through ever increasing resort to force by authorities. Thus MMT well explains a police state."

It's been tried. I happen to be reading Pipes "The Russian Revolution" ( http://www.amazon.com/Russian-.....revolution )
"[in 1919] "treasury operations" - in other words, the printing of money - consumed between 45 and 60 percent of budgetary expenses"...
From a 1913 value of 1.0, prices reached 648,230,000 in 1923.
It doesn't work, and per Tony Judt, it 'leads to centralized murder'.

[AlmightyJB]

"Study it more"

Yeah, they'll study it like a pedophile studies a playground.

[GILMORE]

also..

"..the European Economic and Social Committee = "a bridge between Europe and organised civil society"

Organised! With an Ess! oooh, so Euro.

Is it me, or does that not make any sense unless you are saying, 'Europe is not really an Organised Civil Society *Without Us*'

They is teh Star Chamber?

[Jull]

Unfortunately most of the world is in crisis and people try to preserve their hard earned money for their own needs. If the governments fail to provide decent existence for their citizens and even in Britain which is the world's 6th economy now people not only have to apply for UK loans for people with bad credit to keep afloat, but also freeze to death being unable to pay their gas bills. Who cares? Unfortunately our politicians only care about their own pockets.

[WM1000]

"Unfortunately too many people still view the shadow economy as a normal part of society and lack any remorse about using the 'black market' either to hire/provide cheap workers or buy/sell goods while circumventing taxation."

Yeah, it is so unfortunate that people still avoid government extortion. Why should I be remorseful for not paying the aggressor who is demanding to take a percentage of my income?