Thursday, February 14, 2013

Entrepreneurial Stealth

Average citizens have the means of expressing disapproval should they believe their government is corrupt or over-taxing them.

 In Spain, there is a growing stealth economy, that is, out of government sight. Clandestine restaurants are springing up in hidden places, such as basements, garages, lofts and warehouses.

In one case, the proprietor buys his supplies in bulk from friends in wholesale markets. All transactions are in cash. Diners are warned, should the police raid the place, to clap hands and sing Happy Birthday, thus creating the illusion of a gathering of friends. To enhance the deception, family photographs grace the walls, and there's a toothbrush in the bathroom. He numbers among his clientele bargain-hunting police officers.

Other Spaniards have converted their apartments into jazz clubs. They have no listed address, and are found only through word of mouth, Facebook or Twitter.

Economists estimate these unlicenced places are depriving the already financially battered government of some 30 billion Euros ($50 billion) in taxes each year. That amounts to 20 percent of Spain's gross domestic product.

Meanwhile, in tax-strapped Greece, citizens have resorted to scavenging for wood for their fireplaces. All that to avoid the taxes on heating oil which the government increased last fall by 450 percent. It's not working as planned. Heating oil sales have plunged 70 percent from a year earlier. The cost to the government is about $190 million.

This has spawned a new businesses of selling wood.The source of some of the wood is illegal logging in national parks, and thefts of trees and limbs from city parks. Air pollution has been measured at three times normal levels. The deforestation is occurring at a rate not seen since the German occupation in the Second World War. (Source, The New York Times, Feb. 10, 2013)

In less harassed France, le systèm D thrives. "D" for se débrouiller which means to work it out for yourself. The citizenry do it in spades. Inventive Parisians we once knew did it this way.

To avoid paying for a licence for his television, the existence of which was disclosed by an aerial on the roof, (or possibly to avoid the cost of the aerial itself), the owner installed a wire mesh covering the entire ceiling of his bedroom. Somehow, this gave him adequate reception.

Another "D" neighbour,  from time to time drove to Germany to purchase exotic fish eggs. These he hatched in his apartment by placing the eggs in receptacles that filled almost every flat surface of his home. When grown, the fish were sold to local collectors, for cash, of course.

Meanwhile, his wife operated a knitting machine. The clothing she produced was exchanged for groceries with the merchant down the street.

The neighbour across the street worked for the post office. I regularly saw him stop his post office truck, and deposit his wife and a load of groceries.

And so the big wheel keeps turning under the government radar.

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