Thursday, 25 July 2013

The Money Parade/Cybereconomicpunkland

Mona Lisa White Rabbit Blue : Makeshift Studios 2012

The Money Parade/Cybereconomicpunkland

Money is, actually – nod your head knowingly – worthless. It is, after all, cheap paper, though, we, as sentient individuals, invest it with meaning. Hence it possesses power and a double angle as a means of exchange and as a measure of value.

It also replaces the old barter system where, for fixing a leaky roof on your neighbour's mud hut we receive in return a bottle of, on offer, merlot from the local supermarket. (Note : we are stretching things here a little as the barter system was used in a time before Tesco/Walmart – though it may yet return!!)

Coinage jingles in our pockets, dollars, pounds sterling and euros fit neatly and snugly into our expensive designer label leather wallets – if we are lucky to have any cash and our wallets are not fake Guci as opposed to the real Gucci.

We purchase goods and services and pay with paper and coins as an intermediary resource for buying and – again if we are lucky – receive change in return, which then joins the coins in our pockets or the bills in our Guci or Gucci wallets.

We might feel a glow and stand back and admire our trading activities, chasing ‘designer’ brands at the centre of some screenpaly fantasy – I am sure you have seen the clever marketing and adverts, like we are seeking the proverbial crock of…gold…at the end of the consumer rainbow. Or, alternatively, if we are impoverished and poor we might dabble in the world of hand made fakes and counterfeits from under the table of the Saturday afternoon stallholder at open markets (no imaginary fantasy ad worlds or subliminal marketing needed here only real fake Guci).

A cul-de-sac of the massive underground or shadow economy which eventually finds its way back into the mainstream economy and, as commentators are quick to point out, helps keep the 'visible', regular economy from dipping under the financial waterline. Think about it, but please don't mention to George Osborne or Angela Merkel!

This world is often the habitat of those who are finding it very difficult to make ends meet, but it is only one small corner of that massive underground economy.

In difficult times people find it extremely difficult to find and maintain full-time, permanent, well-paid employment with, as we have hinted at before, substantial hours, and access to pension rights, sickness and holiday benefits. Often, such people are trapped in a system that they feel doesn't work for them and turn to work which might be cash in hand with no questions asked, no income reported or taxes paid - very ironic.

According to economist Edgar Feige of the University of Wisconsin, the shadow economy in the USA has doubled since 2009 and is now estimated to be worth $2 trillion (that is a heck of a lot of lost tax from the system). In real terms this amounts to something like 8 per cent of US GDP.

We also find that the loss of revenues to the US government is considerable and increasing. In 2001 it was estimated that $375 billion was lost in taxes unpaid by those working in the shadow economy, while over $500 billion was lost in 2012 because of unreported wages.

I find this fascinating. It is an area of the economy which kicks in with, is entertwined with and works alongside the mainstream economy and an area rarely visited. It is a bit like the interface between the contemporary economic universe and the digital, wired cybereconomicpunkland, that place we have yet to reach but are rapidly approaching - lower the undercarriage.

A truly huge and burgeoning and fertile landscape for exploration...but that's for another day...

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