System D Economics

Winter                                  Moon of the Winter Solstice

(San Blas woman selling mola’s in Panama City colonial district. cbe)

System D economics.  Never heard of it?  Read Wired magazine’s print edition this month. System D economics, named by an economist who studies system D, are the economics of the gray and black markets.

“System D is a slang phrase pirated from French-speaking Africa and the Caribbean. The French have a word that they often use to describe particularly effective and motivated people. They call them débrouillards. To say a man is a débrouillard is to tell people how resourceful and ingenious he is. The former French colonies have sculpted this word to their own social and economic reality. They say that inventive, self-starting, entrepreneurial merchants who are doing business on their own, without registering or being regulated by the bureaucracy and, for the most part, without paying taxes, are part

(Panamanian vendor along ocean. cbe)

of “l’economie de la débrouillardise.” Or, sweetened for street use, “Systeme D.” This essentially translates as the ingenuity economy, the economy of improvisation and self-reliance, the do-it-yourself, or DIY, economy…

The total value of System D as a global phenomenon is close to $10 trillion. Which makes for another astonishing revelation. If System D were an independent nation, united in a single political structure — call it the United Street Sellers Republic (USSR) or, perhaps, Bazaaristan — it would be an economic superpower, the second-largest economy in the world (the United States, with a GDP of $14 trillion, is numero uno).”  Freakonomics, quoting the Wired article.

Visiting South America introduced us to System D economies, especially in Ecuador, Peru and Brazil.  The most memorable instance was the shuttle service to the Rio International Airport.  As soon as we began moving away from the beaches, vendors began to show up.

At a particularly valuable location, a small v of land jutting out into two streams of traffic, four lanes on one side, four on the other a man stood with cups and bottles of an orange drink.  He sold cool liquid to drivers and passengers of vehicles slowed or stopped by rush hour traffic.  He was doing very well.

As we moved further away from the city, the action got stranger.  On the divided highway
(seaweed collector, Trujillo, Peru. cbe)

(at least 4 lanes each way) leading directly to the airport, kids sold popcorn and nuts.  They vended their goods by standing in the small shoulder between the lane closest to the concrete divider and the divider itself.  As traffic came to a standstill from time to time, they would dart out into the traffic and sell a bag of colorful popped corn.

There weren’t just a few of them either.  Perhaps the oddest part of this came when Kate leaned over and said, “Look, there’s a guy a wheel chair over there.”  And, sure enough, there was, a vendor in a wheel chair.