Steven Greenhut on California Regulations and Black Markets

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V. Visu/flickr

One of the most notorious features of the Soviet Union as it limped toward collapse were black markets. Rather than deal with that nation's myriad regulations and restrictions in the official economy, Russians relied heavily on these markets to survive. A close look at the United States economy also points to a large and growing underground economy — not just for illegal goods and services such as drugs and prostitution, but for legal ones such as cigarettes and construction. Indeed, the more heavily taxed and regulated the activity, the more likely black markets will arise. It's no surprise this is common in heavily regulated California, writes Steven Greenhut,

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