[credit provider=”Youtube | jlandryst7 ” url=”http://www.youtube.com/watch?v=FKHS7LiQ5sw”]
The idea that an itinerant New York City candy vendor pulls in $150 a day ought to have spawned one of the great feel-good financial news stories of 2011.Here are the details: for almost a decade and a half, Alex McFarland, known as “Tracks” to his buddies, has been an underground man, a subterranean entrepreneur, roaming through the subways catering to people’s need for a sugar buzz at a dollar a pop. Alex’s daily haul would put his gross yearly salary at between $40,000 and $55,000 (depending on whether he takes weekends off) — which means he earns as much as an assistant store manager at Walmart or Target.
Alex’s story, told in a video by Bianca Consunji (and shown below), slipped onto the web in October — and this tale of bootstrap economics inspired additional reports on the CBC (Canada’s public broadcasting system) and even on a Taiwanese news blog. But here in the U.S. of A., though New York Magazine and Gothamist offered links to the video, most of the MSM met the story with a great wall of silence.
Youtube credit: jlandryst7
Yet this tale of one savvy sub-rosa merchant carries some serious global significance. Alex is part of what is commonly called the informal economy — a realm where businesspeople don’t get licensed or registered and, because they are paid in cash, often don’t pay taxes. More than half the working stiffs on the planet — 1.8 billion people — earn their money like Alex, selling legal products in a quasi-legal way, and their efforts account for perhaps $10 trillion in economic activity. The U.S. alone generates 10% of that, or approximately $1 trillion in off-the-books economic activity.
These kinds of business practices are all around us. Think of the construction laborers who lurk for work in the parking lots of Home Depots and Lowes and the contractors who hire them. Think of the merchants who man flea markets and swap meets in all 50 states — many of whom don’t report their full income to the government. Ditto for some of the buyers and sellers on eBay and taskrabbit. And global multinationals are in the mix too, for instance when they exploit loopholes in the law to exempt their income from taxes.
Governments routinely argue that merchants like Alex are criminals — no different from drug dealers and pimps. But that’s simply untrue. When half the workers of the world aren’t included in the legally defined economic system, the proper response is not to question their motives, but rather to question the system. We can start by looking at history. Here in the U.S., the underground has always been the incubator economy. It was roving salesmen like Alex — historians dubbed them Yankee peddlers — who kept the pioneers alive, going from homestead to homestead selling products from the packs on their backs. Even Dick Sears and Frederick Stanley, who founded two massive firms that are still with us today — Sears Roebuck and Stanley Tools — started in business as unlicensed peddlers.
Alex, then, is part of an honorable tradition. In the underground, he’s a free man. He’s his own boss. He’s not forced to punch a clock or wear a uniform or obey annoying corporate work rules. He can pick his own route, do his own market research (Peanut M&Ms, he says, are the key to his success), and thrive during dark economic times. What would happen if we allowed small and mid-sized start-ups like his five or 10 or even 15 years before expecting them to become formal entities? What would happen if we offered them tax forgiveness if they reinvested more of their profits in their businesses? What if, instead of treating people like Alex as criminals, we saluted their resilience and ingenuity and encouraged their entrepreneurial spirit?
Wouldn’t these actions help grow the economy and save the American Dream?