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The Real Free Market

And Why You're Going There Whether You Want to or Not

Tyl Eulenspiegl

Of late many in the freedom movement have been lamenting how hard it is to make a living in the underground economy. Nobody's getting rich, that's for sure.


What about the drug trade? According to some estimates the traffic in illicit recreational chemicals forms the economy's largest single sector. If you take the Western hemisphere as a whole it almost certainly is. Nobody getting rich? Loads of people getting rich. Way rich. The recreational-chemical trade bought the presidency of the United States for an unknown hick-state governor whose main distinction was his years as Orval Faubus' bun-boy. Twice. For more info, try a Web search, keyword Mena.

What about prostitution? Don't you think a few bundles are made in that line?

Don't tell me you can't make money on the black. It's silly wrong.

Here's the rub: do not expect to land a fortune, or even scratch a living, from your macramé or organic massage. It's not going to happen. If they sell kits for it at Michael's, or videotapes on how to do it on infomercials, you will not be able to sell it to anybody else--unless your abilities as a salesperson are transcendent, in which case you can make a killing on the black, or any other market--and don't need me to tell you how.

Perhaps drugs and prostitution are too icky for you. Your call. Indeed I only mention them to ram home a point. Should you wish to enter those enterprises there's already plenty of how-to info available, to the extent it's necessary (prostitution not being known for its steep learning curve). You might also object those occupations are too dangerous. You may want to reconsider. First of all, going on the black is no guarantee of profitability. You are competing with aboveground providers of the goods and services you purvey. If you perform an otherwise licit service, such as roofing repair, on the black, your competitive edge is that you have less compliance overhead than aboveground providers: you're not paying those taxes, nor to make your john "accessible." You can undersell "legitimate" competitors and still profit (which is why they'll rat you off in a heartbeat). The other way to profit on the black is when, as with recreational chemicals, there are no legal providers. In that case, danger is what you're paid for.

Moreover, when we speak about dealing in the underground economy--the black market, as the statists rejoice to call it--we're talking breaking the law. It's definitional. It's the point. Whether it's taxation, you're trying to avoid, or licensure, or regulation, or plain government snooping--or, like a true freedom-lover, all of the above--you're an outlaw. As an economic outlaw, a dropout from the tax-regulate-license (and let's not forget subsidize) scam, you pose a far greater real danger to government, all government, than any mere terrorist. Indeed, the flight to the black economy is how government will be brought down. Right now economic outlaws aren't as media-sexy as Osama bin Laden or Tim "the Patsy" McVeigh. Let the government start feeling the pinch--and it will--and suddenly we'll all be hearing the phrase economic terrorism 24/7. Bite this bullet: if you enter the underground economy, sooner or later you will see a movie on HBO in which you are the bad guy. And if the government spots you, meet Lon Horiuchi. A lot of toe-dippers in the freedom movement want freedom without risk. Freedom without risk is not possible. It is that simple. That applies fully to trading on the only real free market: the black.

The secret of making it on the black market is the same as making it in the free market in general. You must:

1. Provide something -- services or goods -- somebody really needs. Or
2. Provide something -- services or goods -- somebody really wants. Or
3. Be a wizard seller.
Here's something else you probably don't want to hear: not only is the third choice by far the most powerful, even if you've got #1 or #2 nailed you probably won't get anywhere without a healthy dollop of #3.

A lot of sensitive artistic types look down their noses at self-promotion. A lot of them actively dread it, as do many techies. But self-promotion is probably the single best predictor of success in any endeavor (the second: persistence); and it is virtually impossible to be anything but a wage serf without doing some of it. Come to think of it, you have to peddle yourself to be a neoserf too: think résumé and job interview. So what are you scared of? The point of this piece is not to scare you away from trying to live on the black. I want you in the underground economy. In fact chances are good you'll soon have no choice about entering the black market. You can do it. Anybody can.

But you must go in with clear eyes or you will lose. Effective selling is beyond this article's scope. Read Dale Carnegie's How to Win Friends and Influence People. Seriously. Robert Ringer's books are also useful for any would-be entrepreneur, even those foolish enough to persist in trying to make it aboveground.

So what do I mean by finding goods or services people really want or need? If dope and hookers seem too outrageous, try tobacco and guns. A lot of people really want tobacco. A lot of people really want guns, and there are those who will argue -- and I'm among them -- that they really need them as well. Both of those commodities are on their way to being banned outright by legislative action and executive fiat, or being effectively outlawed through all legitimate providers being driven out of business by the shiniest new weapon in statism's arsenal, the government-engendered lawsuit.

There's two more ripe back market opportunities: peddling smokes or smokepoles. Risky? Sure. In either trade the government will probably kill you if they catch you, or at least confiscate everything you have. But what's not risky? In my town the City Council recently voted itself the "right" to seize your house if a teenager gets caught swilling a beer in it. Vicki Weaver got her brains blown out by an android sociopath in large part because she wrote a letter to the editor that offended some bureaucrat's wife (see Alan Bock's Ambush at Ruby Ridge). Think about all the people just in the last year who have died in their beds or on their stairs because the rabid dogs of the War on (some) Drugs smashed in the wrong door. Even the most abject compliance doesn't guarantee your safety from your own government.

As to how-to hints: you might be able profitably to raise your own tobacco with a Gro-Light in your closet, like marijuana; I flat don't know. Smuggling and distribution are likely easier ways to go.

Concerning guns, there's a lot of them out there already, certainly. But many are in the hands of those who don't want them and might be willing to sell them to you, to resell at a profit to those who, yes, want or need them. Others have guns that aren't operable, but with a little knowledge and elbow grease can either be restored to function or cannibalized for parts. Guns are inherently robust; there are plenty, possibly millions, made in the 1800s which work fine today. And here's a secret they really don't want you to know: they aren't terribly hard to make. Obviously, the higher the quality you're after, the more skill and effort they require, just like anything else. A usable, if inaccurate and not very safe zip gun could probably be made with things you have in your house right now. You could make a high-quality modern-type weapon, even a fully automatic one, with little more than hand tools, although probably not profitably. But consider: you, and almost certainly you and your circle of friends, likely have access to better and more powerful tools than John Moses Browning did when he got started. It's amazing what you can do with just a modern drill press. It's an article of faith among gun-grabbers, including apparently military and police personnel you'd expect should know better, that rifling a barrel--cutting a spiral groove inside it to stabilize a bullet by making it spin--is virtually impossible to home industry. 'Tain't so. People were rifling barrels in the 1500s. It's not easy now without specialized equipment. But, y'know, think about it.

The real chokepoint, by the way, is ammunition, without which any gun is just a club or paperweight. That's a lot tougher nut for the black manufacturer to crack. But there are solutions. Working them out I leave as a test of your own entrepreneurship.

These commodities may not suit you, either. You may believe trafficking in guns or tobacco makes one a merchant of death. And for now at least they are comparatively high-risk areas. But the above discussion on the home gun trade points to some fundamental principles of black entrepreneurship--pretty much the same as for any other kind. To make anything, whether fortune or just your daily bread, inevitably takes:

Precise proportions vary. But almost any endeavor you choose will require at least some of all of the above. And don't forget selling, as mentioned earlier. I suspect the biggest sticking point for most would-be free-marketeers are skill and getting your hands dirty. But if it's easy, if everybody does it, why would anybody pay for it?

Granted, what I've discussed so far entails hard outlawry as well as hard work. That might be a little rich for your blood. No problem. The easiest and perhaps most practical entry to the black market is the mixed option. It can take two forms: a sideline to your everyday occupation, or a portion of your open business conducted on the black.

The Sideline can be quite low-pressure: you're not relying on it to survive. That eliminates certain distractions. It can also be the lowest risk, not necessarily because the government won't be mad at you if they catch you, but because they're not likely to bother to look. This option is your best shot at actually turning a profit on your macramé or organic massage. People do make money on their hobbies. But remember: just about everybody in America wants to make money on their hobbies. Competition's not stiff, it's rigid. But there are ways. We should add an ingredient (what, another?) to our can't-do-without mix: ingenuity.

I know of a person who buys used golf clubs, wherever they can be found: flea markets, junk stores, pawn shops, garage sales. You can sometimes dig them out of dumpsters. In ones or twos they're cheap. Collect enough and you will begin assembling complete sets of clubs. Complete sets command a big premium over stray clubs. Having acquired sets, this person then hangs around golf courses (inconspicuously because the person's an avid golfer) looking for players using loaners or rentals. Hey, wouldn't you like a set all your own? For lots less money than you'll pay at the store? … Cash, that is. (Of course, you could also shop the sets on E-Bay. While you're at it, you could email the IRS details of your transaction. They might get it one or two seconds quicker.)

Here's a great example of turning a hobby into cash--that is, into black-market profit. But break it down. It does take skill: I couldn't tell you even what constitutes a complete set of golf clubs, much less which brands are more valuable. It takes time to accrue those prized complete sets. It takes getting your hands dirty, because you're a lot more likely to get people to pay for shiny, clean clubs than ones that look like you picked them out of a dump, especially if you did. It takes investment to buy or scavenge the clubs. And of course you have to gather courage to make your approach and to seal the deal: to sell. How much does this person make selling used golf clubs? I have no idea. And that fact contains important multiplex lessons about black-market dealing. When somebody tells you how impossible it is to make a living in the underground economy, consider: first, few people welcome added competition. Second--think about it, is somebody really going to say, Oh, yeah, I've made a real killing in the black market; got great big bags of gold buried in m' back yard... ?

Sure. It should be obvious that anybody who'd say any such thing is either a fool or a snitch, or both. Either poses serious danger.

Here's a lesson I've learned first-hand: everybody poor-mouths. The exceptions are braggarts at best. If you're dealing on the black, far better than the poor mouth is the closed mouth. Say nothing beyond that necessary to seal the deal. Tell no one--including family and friends--you don't have to. Obviously you have to let somebody else in on your secret to transact a trade; that's the irreducible minimum of risk, and it's a substantial one. Indeed, realistically, to make any kind of go you will need some number greater than one of trading partners. And yes, each greatly enhances risk. That's the biggest danger in the black market. But having assumed the unavoidable risks, won't you be wisest to avoid every risk you can?And for Lysander's sake, don't go blabbing on the Internet.

Doing a portion of your existing business on the black makes it easier, or in any event less stressful, to broach the subject of breaking the law to your customer. The approach can be summed up in two words: cash discount. Pretty innocuous, no? Indeed: no. It's already illegal in some jurisdictions to say those two little words, and anyone you say them to might just choose to pick up a reward for ratting you off to the tax man. But they don't ring alarm bells. They can be slipped into normal dealing without disturbing the waters. It's the opposite, psychologically at least, from sidling up to your mark in a trenchcoat or trying to convince passersby to buy something out of the trunk of your car. Doing a portion of your existing business on the black, or entering a business you can partially conduct underground, offers many other advantages than the ability to do it without being obvious. You can work into it gradually, rather than dive headfirst into Public Enemy status. You can advertise openly. You can also account to the Man for your continuing ability to buy food and pay your mortgage.

If we are to be free, someday a lot of us are going to have to be willing to stand on our hind legs and defy the Power. That's just a fact. But just as it's still too early to shoot the bastards, open defiance at this point is not optimal; it's asking to be made an example of. The best resistance is covert. Doing a little business on the black, and gradually, discreetly increasing the proportion, is a powerful strategy and, in the long run, powerfully subversive.

And here's an interesting fact: most businesses you see on the street already conduct some business on the black. Everybody does it, to some degree. It's virtually impossible not to, especially for a small business. Here are some enterprises I know people are making money in, partially or wholly on the black market. Some of them are making lots of money. Some are not.

These activities are pretty tangible. They mostly involve hard work, knowledge or skill, and sweat. They may be abhorrent to the sensitive of nature. But you can profit from them, aboveground, underground, or in combination, reliably and generally pretty well, because people always need them and aren't likely to stop needing them soon. One vast and surprisingly unexploded area of opportunity lies in making things. Everyday things--things people need. Especially things to make things. Does that seem unreachable? Seem to require belching smokestacks and noisy grease-slick shop floors? Conjure images of dark, Satanic mills (which in the poem are actually, appropriately, public schools, but that's another rant)?

Welcome to the best kept secret of the 21st century.

The digital revolution is real, to be sure; it's created a vast amount of actual wealth--and we're not talking about the dot-coms, products primarily of hype and, of course, hidden inflation. It will create more. But everybody knows this, and is accordingly trying to get in on the action. Competition is tough and will only get tougher. Ah, but we're all, still, living in the material world. So consider being material boys and girls. Even in some cyberpunk near-future where everybody gets vicarious experience piped directly into their brains, somebody's gotta make the cables, plugs, and sockets to stick in your brainpan. And nobody's going into the dirty business of making actual things. Want to immigrate and not even have Red Pat Buchanan want to burn your house? If you're a trained machinist they roll out the red carpet for you and your pet cow. A hundred thousand or more foreign machinists coming into the country each year can't touch the shortfall in how many we need--and that's with the huge cut in grunt-level machine-operator jobs the CNC revolution is bringing about. What's doubly ironic is that the CNC revolution is reaching the street. You can get into all kinds of serious manufacturing processes--machining, casting, heat-treating, many others--in your garage, back yard, or on your kitchen table. Sure, it costs money--but you can get going for a few thousand dollars (as in less than $5K). What it really takes is skill, knowledge, and--again!--selling. Hunting out markets, convincing people you can do the work, then doing it.

And if the above suggestions make you turn up your nose in Platonic disdain for the merely practical--that's your right. Just be sure you afford that kind of class-consciousness, because the bottom line is that no one is going to pay you wads of money because of how metaphysically advanced or beautiful you are. On the black market or any other. Not without guns pressed to their heads--which of course explains the overwhelming support government enjoys among the academic and artistic-wannabe sectors.

Now here's what underlies the bottom line.

As mentioned before, you may soon not have a choice about working underground. Every day the government makes it harder for anyone to make an "honest" living--that is, a living on the "white," open, regulated, taxed, and minutely scrutinized market. And each and every day it makes it impossible for many individuals. How many? Who knows? Bet the Department of Labor doesn't publicize such statistics, if it bothers to amass them. Think about how many businesses the Ferals seize every day. How many plants are shut down for "environmental" crimes? How many driven to dirt by fines or simply the costs of regulatory compliance? Laws and regulations are so legion and complex that no one can possibly comply with them, both because no one can humanly know them all and because many are flat contradictory: lose-lose situations.

For every economic or ecological or thought criminal hauled off in chains to the plaudits of government's television sphincters, for each factory the EPA closes down, for each strip-mall business the local terrorcrats padlock, more people, several, dozens, hundreds, are cast out of work. And don't forget litigation. The lawsuits against the tobacco and firearms industries are only signs pointing the way the country is heading. In all seriousness, no matter what business you or your employer are engaged in, I can dream up some "harm" it does for which it might plausibly be sued into receivership. So could you, or anyone with a scrap of imagination. Now, I know it's gratifying for us to flatter ourselves at how stupid our foes--lawyers, bureaucrats, politicians--are. Often it's true. But remember what serious money awaits those who dream up arguments sufficient to persuade judges and juries both generally hand-picked by the plaintiffs' bar these days. Individual attorneys have made billions off tobacco suits. That kind of juice can make even the dimmest bulb generate a lot of light.

The odds are better than you want to believe that whatever aboveground business you're employed in will be destroyed by litigation or government action. Sooner rather than later, given that the people who actually run this country--which group will change but imperceptibly no matter who wins this or any election--are unalterably hostile to private enterprise. In purest practicality you would be well advised to start figuring out how you'll make it when the shop shuts down.

Is that news all bad? Only for the complacent. Financial freedom guru Doug Casey likes to point out that the Chinese ideogram for crisis comprises the characters for both danger and opportunity. The government every day renders it impossible for numerous everyday people to make their livings legally. But all these people must make a living still. And there's only so much room at the public trough. Indeed, trough-room must inevitably at some point begin to diminish as loyal, law-abiding tax-payers are squeezed out of employment, and hence their ability to keep paying taxes no matter how servile they are. (Have we reached that point already? Again, who knows? But realistically, it must happen. And at some point after that, the effects will begin to be felt.)

The government, in other words, is cutting its own throat. Simply to survive, more and more of these people it's throwing out of work will move to the underground economy, because they must. And thus into economic outlawry, de facto opposition to government, without the necessity of accepting or even having heard a single "libertarian" principle. That's good for freedom: it will eventually mean the end of the State. It's also good for the black economy. It takes two--or more--to trade. Sure, there'll be more competition for black market profits. But there'll be more black market profits. The bigger, broader, and deeper the black market is, the more robust, profitable, even safer (by reason of numbers) it becomes.

Meanwhile, each new law and regulation creates new black market opportunities. Think Prohibition. Think the War on (some) Drugs. Think about the wars on tobacco and guns, just commencing in earnest, and the wars right around the corner, on meat, sugar, caffeine, non-insipid entertainment, whatever. People will still want those proscribed services or goods, so that each new prohibition hugely inflates the profits for providing them. We know this; we've seen it happen before, we see it happening now. And remember, it's not just outright bans that create such opportunities, such profits. It's anything that restricts economic activity and choice in the aboveground, "white" market. And those restrictions are falling from the sky like an anvil cloudburst.

When it's raining anvils aboveground, it's raining soup below.

Don't whine. Get out your bowls.

Tyl Eulenspiegl is a freedom-movement rabble rouser with a bad attitude. Tyl's hobbies include helping the State to self-destruct.

(c) 2000


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