ESSAYS rod roth

The Time for System D is now
—Robert Neuwirth

Tamales, she sells. From a shopping cart, standing in front of a downtown Manhattan deli. And Mole Poblano, which, you understand, is a sauce of divine origin. In the 16th century, the story goes, an angel visited desperate nuns at the convent of Santa Rosa in Puebla de Los Angeles during an all night prayer vigil, inspiring them to create a dish that would spare them from the mortification of having only a tough old turkey to serve when the Archbishop came the next day to visit.

It is no wonder Genoveva sells out two hours after she sets up. Two or three days a week, from the tiny kitchen in her apartment, to the shopping cart, to the larders of the cognoscenti who make up her clientele. She makes $800-1,000 a month, which supplements her husband’s income from his job. No fuss, no muss, no permits, no taxes. Genoveva, who arrived informally in the country a few years ago, is in the informal economy.

Kate is also in the informal economy, but, unlike Genoveva,  Kate originally hails from Maine, is white, and highly educated. She is a jewelry designer, and a graduate of the Rhode Island School of Design. Kate bakes unusual pastries using olive oil in her own home for sale in the trendy Manhattan coffee shop of a friend. It is an important source of income for her. Genoveva operates an illegal, unregulated, unlicensed business. Kate does the same thing, but refers to it as income patching.

Euphemisms notwithstanding, both women are bit players in an economy that is anything but small potatoes. Journalist Robert Neuwirth cites studies in Stealth of Nations, the Global rise of  the Informal Economy that estimate the global informal economy at $10 trillion. It would be the second largest economy in the world, after the US. Virtually all of it goes unreported to governments and unnoticed by mainstream economists. It is the only economy that is growing. It has exploded since the financial crisis of 2008. Half of the global population now works in the informal economy. The OECD estimates that by 2020 two thirds of the workers of the world will be employed in unregulated, untaxed businesses.

In street terms, the phenomenon is known as  System D, a slang phrase pirated from French-speaking Africa and the Caribbean. The French call particularly effective and motivated people debrouillards. Hence, the term Sisteme de Debrouillards, shortened to System D. One such businessman describes it as a business that exists solely on individual effort, with no help from the government.

Not surprisingly, underdeveloped nations have been the locus of  most of System D. In Africa, the percentage of GDP in System D ranges from 30 to 60%. The same is true in Latin America. In Russia, System D accounts for over half of the total economy. So far, System D business is only 20% of the US economy, but there is good reason to expect it to be the greatest, perhaps only the only source of economic growth for some time to come.

System D emerges when people who have been passed over start to act. This is such a time in the nation’s history. World 3.0 is doing a number on the educated American middle class. Thirty years ago, new college graduates were besieged by employment offers from American industry. It was a question of sorting out which corporation offered the best retirement plan.

Not so, today. The jobs are fewer and the qualification requirements are greater. Everyone knows kids that come home after graduation and lay on the couch for a while before they get situated. Shhh, don’t say a word, but they are the luckiest crop of graduates since the Great Depression. They have been saved from entering American industry to serve out their working lives in soul killing jobs that offer little job satisfaction and virtually nothing in the way of a life after work.

They will hang out until they get sick of daytime TV. Then they will go out and try something and fail. Then they will try something else. And, if history is any guide, they will, out of desperation, figure it all out and become debrouillards, non pareil.

How lucky can you get?

Cheers,

Rod