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A Losing Bet: Price Controls In Urban Survival Scenarios
A possibility that should not be overlooked in the framework of study of urban survival: Governments may turn against their own people
Survival Tips For Economic Disasters
Is patriotism good for survival?
Survival Weapons: How To Use Them To Actually Survive
Jungle Factories: The Local Production Of Expedient Weapons
Some Stories Of Bootleggers, Smugglers And Entrepreneurs Of The Black Market
Extreme Cooking Tips And Advice: Keep Culinary Hygiene Using Fire
Extreme Cooking Tips And Advice: Mate Tea In Your Camp
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One of the consequences of the prolongation of any sort of state of exception or survival is the apparition and development of the black market; survivors and survivalists should know what it is and how to operate because having to participate in it may be a probable scenario.
The name of this economic modality has negative connotations; however, the black market could be like a good thing, literally, when it becomes the only source of freedom among virtually enslaved people or it could turn to be really evil, like it happens in the case of the market of illegal substances, illegal weapons and even modern slavery. Whether the black market is good or bad is a thing that can only be decided by looking at the context in which it develops because if it would depend on absolute, almost Cartesian definitions, we would end up putting drug cartels and warlords at the same level as the children that delivered food to the black market of the Warsaw ghetto (See The Skowronek Bankers in the XX Century).
So, it is important to define the black market properly and the best way to do so is probably to attempt to define it in the simplest terms that are possible: A black market is a close relative of the ideal self-ruling, totally-free capitalist market, with only one significant difference. In an ideal free market there isn't necessarily a confrontation between economic actors and the government of the jurisdiction in which that economic system functions. In a black market, by definition, there is one. If there was none, then the black market would not exist because black markets evolve as a response to the needs of people that are left behind - so to speak - by governments that either by mismanagement or some sort of political decision, impede the access of certain goods and services to the public. Obviously, drugs are bought in the black market - and a highly developed one at that, indeed - and that has to do with legal and moral decisions taken by the legal representatives of citizens in most t countries, while the black market of the Warsaw ghetto appeared as a consequence of the Nazi extermination policies that before resorting to systematic, industrial mass murder, resorted to famine among those considered expendable or dangerous by their ideology.
Another of the characteristics of the black market is the higher perception of risk. Risk is a well-understood concept in the world of finances: Credit ratings express those different perceptions, and something similar happens in the case of the black market although for different reasons: Black marketing means operating illegally, according to the applicable laws at the time and moment, be them fair or unfair rules. Added to that, the scarcity of products and services that originates the black market in the first place contribute to the development of prices much higher than those announced in the official or legal market. More over: Often those prices reflect no reality, they are simply fakes for goods that do not exist in practice but are announced for purely propagandistic or political reasons, or maybe the goods are there but common people cannot ain access to them due to regulations, prohibitions or any other sort of practical impossibility.
The third significant characteristic of the black market is centred on the means of exchange used: Official money may or may not be accepted and only sometimes customers do get some sort of credit account, so participants in these transactions may use foreign currencies or even bartering. In some cases this also lead to the creation of true black market bank notes used as currency.
As we said, the black market operates essentially against official policies and the legal economy - no matter what "legal" means -, and governments may decide to take any of the following steps:
Fight it ruthlessly: This seldom eliminates it completely but can make prices soar. In North Korea there is almost total control in this regard. The drug market among western societies is another example.
It tolerates it to some degree: It does so as a practical recognition of the impossibility of controlling the black market.
Rule and profit from it: It takes over the control of the black market by indirect means: During his twelve last years of power, Saddam Hussein took control of the black market in Iraq.
The most benign form of black market is the second one because basically government officials just pretend to look away whenever any sort of black market transaction takes place. The most perverse one is the last one, in which a dictator takes over a lucrative exchange activity even if it means going the official rules imposed by himself, and the worst for the survivor is the first one, not only because it means more risk for him when buying, selling or bartering, but because prices may become virtually impossible to pay.
One of the characteristics of the black market - yet not one of the most significant despite appearances to the contrary - is that merchants dealing within it don't pay taxes for their activities as such. However, they usually have to pay tall bribes to keep themselves in business and they might also pay taxes for their legit commercial deeds, because often, black market activities become an extension of legal commerce. A pretty classical example in this regard is that of the foreign exchange market in countries where local governments apply operative restrictions, limiting the amounts that investors may buy or sell at any given time, for whatever reason. In such a scenario, banks and financial institutions that do the legal trading often end up offering "backstore cash" to their known customers, at a different price, of course. But in some cases these black market exchange rates become more relevant than the official ones in which nobody believes because they don't represent reality or due to the fact that foreign money may not be practically available. Another reason that migrates investors to the black market in foreign exchange is the perception of government control: Nobody wants to be controlled by interventionists or authoritarian leaders. Within the black market, demand for news services or products arise all the time and sometimes these are far removed from what you would expect in normal circumstances: At the end of WWII and in the immediate post-war period in central Europe and particularly Germany, lots of people began requesting false or fake documentation and forgerers flourished. Among these individuals were, of course, war criminals but also people that pretended to escape from eastern European countries under the new aegis of the Soviet regime. Often mistaken for nazi sympathisers, people from countries like Poland, Lithuania, Estonia and others, with no connection to the Germans or the nazis just began seeking the same sources as the escaping criminals in order to get any sort of false or fake document useful to show a false identity. Considering that all sorts of records had been destroyed during the war, it was relatively easy to forget a check, a bill, an invoice or whatever kind of document that would persuade anyone performing an ID check. Since these papers, often used in routine activities and day-to-day chores are not created following the same controls seen in the case of passports and official, government-issued ID cards, given a high demand, manufacturers and distributors began to sprout almost everywhere.
Of course, even today fake IDs are sold and purchased for many reasons. I don't need to explain that faking and ID or stealing the identity of someone else is a crime, but there are such cases, especially in countries lie the U.S. where the use of true ID cards is relatively limited. Another case is that of impostors that try to impersonate someone else with various goals, such as fooling authorities in order to cash in the money of rich, deceased people that apparently left no heirs. Some suspicious activities lead to the conclusion that even today there might be - for example - people trying to pretend that they are the legitimate heirs of rich people that died in WWII. I have studied such a possible case that affected my family (See Hena Skowronek).
Not only fake IDs are sold in the black market, but also fake histories. In the ofsshore financial market, which is located in a grey zone in terms of legality, it is possible to find that complete "cold storage" firms are offered for those willing to pay the price in order to elude or evade taxes, hide their assets and so on. These stored companies are true corporations, LLC and the kind, that were created at some point in the past and are kept inscribed in public records, often with no commercial activities but having all the papers meticulously put in order. Law firms that do the paperwork for offshore banking accounts and such stuff often have a full catalogue of these companies, with fancy non-descript names that can be used for almost any purpose. They keep them in order to sell on a case-by-case basis, being the antiquity of the company one of the most important parameters determining the price. Older companies tend to cost more. There is a rather large, speculative market for such turn-key companies.
Then, people interested in creating a corporate identity out of nowhere, purchase these companies that are not really fake, because they do exist legally speaking, and then use things like the creation date of the company in order to make others believe that they have a commercial history as well as a legal one. That is, of course, not the case, but once the company is taken out of cold storage and actually used, it may become extremely difficult to prove its true history.
A similar argument goes for the use of the identities of deceased people. Today it is more difficult than before but essentially, this consists in taking some true data of people who actually existed, but for whom other records are incomplete or very hard to find, and appropriate that identity for making false documents, impersonating heirs and so on. Let's say, someone might go to a graveyard located in some far away place, in a country where there are little formalities, seek for the name of some dead children who was born about the same time as the person in question, and then, only a couple of things have to be falsified because in principle, the story might be credible, especially if there are no surviving relatives around.
A different thing would be to try to impersonate someone who has died, or some mysterious descendant of someone who died long ago, when there are actually surviving relatives and heirs, because not only they will know their familiar history and quite likely have documents proving identities, will executions and so on, but can provide DNA samples for testing.
Indeed, these things are easier said than done, and attempting to prove that someone descends from a rich banker or a king via a mysterious genealogy will probably not work because the formal and legal requisites used today in many countries, especially in such cases, are hard to circumcent with fake papers, and of course, because families such as those of royals, nobles, millionaires and the like are well documented for many different reasons, including the desire of taxation by governments.
That is, since authorities want your money, the more information the have the better, and those that governments perceive to be their targets for taxation due to their wealth are often kept under deeper scrutiny that commo mortals. Thus, there is always more info about such people and hence, for scamsters it may be more difficult to pretend that they are part of such families with tricks like inventing a genealogy in which true heirs are displaced and assumed not to be the direct heirs of a deceased rich person, and to put themselves in their place. That will simply not work because governments, insurance companies and the like can check any alelged evidence presented and find pretty soon that the documents are false or that there are other heirs, and things like that (See Hena Skowronek).
Black market activities also sometimes reach such a level that complete clandestine industries or jungle factories, as we called them in another article, surge apparently from nowhere. In these factories everything can be produced, from cigarettes to firearms and even midget submarines, as history proves. Quality usually is lower in such products, when compared to those attainable in any free, legitimate market, but they can be effective nevertheless. Frequently, the participants in those clandestine factories are trained people - engineers, for example - that were left jobless by the same causes that originated the appearance and prosperity of the black market. Such people, when confronted with the need to survive, jump into the bandwagon when people begin demanding what they can produce. Honesty of participants in such markets is indeed, dubious and it is always preferable to deal in the open legal market rather than this one except when there is no other choice for the survivor. However, in long-standing black markets reputation also begins to count and you should look to make business if that is the case, with already-established black marketers wit some sort of commercial structure already in place. These tend to be the most trusted; also, references can help you as well.
In many occasions the black market becomes an almost normal thing: None of these little marketplace shops in a poor neighbourhood pay any sort of taxes to the local government, yet they operate in open daylight.
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