Inside the Trillion-Dollar Underground Economy Keeping Many Americans (Barely) Afloat in Desperate Times

Yves Smith refers to Inside the Trillion-Dollar Underground Economy Keeping Many Americans (Barely) Afloat in Desperate Times by Sarah Jaffe. This part of the US economy is estimated to be growing at 5% p.a..

Millions have dropped out of the job hunt and are trying to find other ways to sustain their families.

That's where the underground economy comes in.…—in 2009, economics professor Friedrich Schneider estimated that it was nearly 8 percent of the US's GDP, somewhere around $1 trillion.…Schneider doesn’t include illegal activities in his count-- he studies legal production of goods and services that are outside of tax and labor laws. And that shadow economy is growing as regular jobs continue to be hard to come by—Schneider estimated 5 percent in '09 alone.

This underground activity is still seen as Capitalist in that the same mode of production is used: people with money hire other people to work for them.

…Lisa Dodson stressed the way communities came together to help one another through tough times, often through off-the-books economic activity, in her book The Moral Underground: How Ordinary Americans Subvert an Unfair Economy.

In one passage, she tells the story of arriving in a small-town farmer's market in Maine, only to overhear a discussion between locals on “neighbors and the market erosion of common fairness.” She wrote:

Just then a middle-aged woman, who had been talking to friends, suddenly turned around to face other shoppers and asked, 'What’s happening to us? Why doesn’t the government do something?' A local farmer, sorting vegetables nearby, responded immediately, 'The government is the same as the oil companies. There’s no difference. We can’t wait for them to do anything.' A young mom holding a baby as she stood in line said, 'So what do we do?' There was no single response, but they were looking at each other to find it.

So, the US workers have a learned helplessness from the Capitalist system. They have been trained to look to the Capitalist class for initiatives. They do not realise that they the power in their hands. That is where wealth comes from—the hands of the workers.

No wonder the Capitalist ideologues ridicule the Labour Theory of Value. They realise that the status quo depends on the workers being aware of their considerable power.