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Encyclopedia > Black market

The black market or underground market is the economic activity involving illegal dealings, typically the buying and selling of merchandise or services illegally. The goods themselves may be illegal to sell (e.g. weapons or illegal drugs, etc.); the merchandise may be stolen; or the merchandise may be otherwise legal goods sold illicitly to avoid tax payments or licensing requirements, such as cigarettes or unregistered firearms. It is so called because "black economy" or "black market" affairs are conducted outside the law, and so are necessarily conducted "in the dark", out of the sight of the law. Wikipedia does not have an article with this exact name. ... This box:      The underground economy or shadow economy consists of all commerce that is not taxed. ... Face-to-face trading interactions on the New York Stock Exchange trading floor. ... The bayonet is used as both knife and spear. ... Retail selling Street selling is the bottom of the chain and can be accomplished through purchasing from prostitutes, through cloaked retail stores or refuse houses for users in the act located in red-light districts which often also deal in paraphernalia, dealers marketing merriment at night clubs and other events... A tax is a financial charge or other levy imposed on an individual or a legal entity by a state or a functional equivalent of a state (for example, tribes, secessionist movements or revolutionary movements). ... A smoking symbol. ... This article does not adequately cite its references or sources. ...

Contents

Underground market price

Goods acquired illegally can take one of two price levels. They may be less expensive than legal market prices because the supplier did not incur the normal costs of production or pay the usual taxes. This is usually the case in the underground market for stolen goods.


Alternatively, illegally supplied products may be more expensive than normal prices, because the product in question is difficult to acquire or produce, dangerous to deal with, or may hardly be available legally. This is usually the case in the underground market for goods that are illegal to possess.


Even when the underground market offers lower prices, however, many people are likely to continue to purchase the products in question from legal suppliers, for a number of reasons:

  • Some consumers may feel that the black market supplier conducts business immorally (although this criticism sometimes extends to legal suppliers, too).
  • The consumer may — justifiably — trust legal suppliers more, as they are both easier to contact in case of faults in the product and easier to hold accountable.
  • In some countries, it is a criminal offense to handle stolen goods, a factor which will discourage buyers.

In the latter case of an underground market for goods which are simply unavailable through legal channels, underground markets will thrive if consumer demand nonetheless continues. In the case of the legal prohibition of a product viewed by large segments of the society as harmless, such as alcohol under prohibition in the United States, the black market will prosper, and the black marketeers often reinvest profits in a widely diversified array of legal or illegal activity well beyond the original item. Underground markets can be reduced or eliminated by removing the relevant legal restrictions, thereby increasing the supply and quality of formerly banned goods. People who advocate this may believe that governments should recognize fewer crimes in order to focus law enforcement effort on the most treatable dangers to society. However, this can be seen by some people as the equivalent of legalizing crime in order to reduce the number of "official" criminal delicts — in other words, an immoral concession that in their view only makes matters worse. Removing legal restrictions will usually reduce the price of the goods in question, resulting in more of them being bought and sold. For example, if illicit drugs were to be legalized, their price would drop and many would likely abandon their black market sources in favor of their more trustworthy legal sources.


Alternatively, the government could attempt to decrease demand. However, this is economically out of fashion and not as simple a process as decreasing supply.


The term "Underground Market" also applies to illegal monetary exchange outside the authorized institutes (Banks or Legal Exchange Offices).


Examples of black markets

Wars

Black markets flourish in most countries during wartime. Most states engaged in total war or other large-scale, extended wars must necessarily impose restrictions on domestic use of critical resources which are needed for the war effort, such as food, gasoline, rubber, metal, etc., typically through rationing. In most (or perhaps all) cases, a black market develops to supply rationed goods at exorbitant prices. The rationing and price controls enforced in many countries during World War II encouraged widespread black market activity (see Spiv, Wide boy). For other uses of War, see War (disambiguation). ... Total war is a military conflict in which nations mobilize all available resources in order to destroy another nations ability to engage in war. ... Look up war in Wiktionary, the free dictionary. ... Gasoline or petrol is a petroleum-derived liquid mixture consisting mostly of hydrocarbons and enhanced with benzene or iso-octane to increase octane ratings, used as fuel in internal combustion engines. ... Latex being collected from a tapped rubber tree Rubber is an elastic hydrocarbon polymer which occurs as a milky colloidal suspension (known as latex) in the sap of several varieties of plants. ... Hot metal work from a blacksmith In chemistry, a metal (Greek: Metallon) is an element that readily loses electrons to form positive ions (cations) and has metallic bonds between metal atoms. ... Rationing is the controlled distribution of resources and scarce goods or services: it restricts how much people are allowed to buy or consume. ... Rationing is the controlled distribution of resources and scarce goods or services: it restricts how much people are allowed to buy or consume. ... In economics, incomes policies are wage and price controls used to fight inflation. ... Combatants Allied powers: China France Great Britain Soviet Union United States and others Axis powers: Germany Italy Japan and others Commanders Chiang Kai-shek Charles de Gaulle Winston Churchill Joseph Stalin Franklin Roosevelt Adolf Hitler Benito Mussolini Hideki Tōjō Casualties Military dead: 17,000,000 Civilian dead: 33,000... Spiv is a British slang word for a person (invariably male) who makes a living by shady dealings, usually by selling goods of dubious provenance. ... The term Wide Boy first appeared during the second world war in the UK. Some enterprising people took it upon themselves to exploit rationing and do deals with American servicemen to supply locals with much needed luxuries like chocolate and stockings. ...


Prohibition in the United States

The Prohibition period in the early twentieth century in the United States is a classic example of the creation of a black market, its activity while the affected good has to be acquired on the black market, and its end. Many organized crime groups took advantage of the lucrative opportunities in the resulting black market in banned alcohol production and sales. Since much of the populace did not view drinking alcohol as a particularly harmful activity (that is, consumers and its traders shouldn't be treated like conventional criminals), illegal speakeasies prospered, and organizations such as the Mafia grew tremendously more powerful through their black market activities distributing alcohol. The term Prohibition, also known as Dry Law, refers to a law in a certain country by which the manufacture, transportation, import, export, and sale of alcoholic beverages is restricted or illegal. ... Organized crime or criminal organizations are groups or operations run by criminals, most commonly for the purpose of generating a monetary profit. ... Functional group of an alcohol molecule. ... Crime is the current Good Article Collaboration of the week! Please help to improve this article to the highest of standards. ... This does not adequately cite its references or sources. ... The Mafia (also referred to as Cosa Nostra or the Mob), is a criminal secret society which first developed in the mid-19th century in Sicily. ...


Illegal drugs

Main article: Illegal drug trade

Beginning in the 19th and 20th centuries, many countries began to ban the possession or use of various recreational drugs, such as the United States' famous "war on drugs." Many people nonetheless continue to use illegal drugs, and a black market exists to supply them. Despite ongoing law enforcement efforts to intercept illegal drug supplies, demand remains high, providing a large profit motive for organized criminal groups to ensure that drugs are available. The United Nations has reported that the retail market value of illegal drugs is worth 321.6 billion dollars. [1] While law enforcement efforts do capture a small percentage of the distributors of illegal drugs, the high and very inflexible demand for such drugs ensures that black market prices will simply rise in response to the decrease in supply—encouraging new distributors to enter the market in a perpetual cycle. Many drug legalization activists draw parallels between the United States' experience with alcohol Prohibition and the current bans on cannabis. These lollipops were found to contain heroin when inspected by the US DEA The illegal drug trade is a worldwide black market consisting of production, distribution, packaging and sale of illegal psychoactive substances. ... Alternative meaning: Nineteenth Century (periodical) (18th century — 19th century — 20th century — more centuries) As a means of recording the passage of time, the 19th century was that century which lasted from 1801-1900 in the sense of the Gregorian calendar. ... (19th century - 20th century - 21st century - more centuries) Decades: 1900s 1910s 1920s 1930s 1940s 1950s 1960s 1970s 1980s 1990s As a means of recording the passage of time, the 20th century was that century which lasted from 1901–2000 in the sense of the Gregorian calendar (1900–1999... Recreational drug use is the use of psychoactive drugs for recreational rather than medical or spiritual purposes, although the distinction is not always clear. ... Massive mark-ups for drugs, UK Govt report Prevalance of drug use 1991-2006 The War on Drugs is an initiative undertaken by the United States with the assistance of participating countries, which is intended to combat the illegal drug trade —to curb supply and diminish demand for certain psychoactive... Organized crime or criminal organizations are groups or operations run by criminals, most commonly for the purpose of generating a monetary profit. ... The prohibition of drugs through legislation or religious law is a common means of controlling the perceived negative consequences of recreational drug use at a society- or world-wide level. ... Functional group of an alcohol molecule. ... The term Prohibition, also known as Dry Law, refers to a law in a certain country by which the manufacture, transportation, import, export, and sale of alcoholic beverages is restricted or illegal. ... A dried flowered bud of the Cannabis sativa plant. ...


Prostitution

Prostitution is illegal in many nations and regions throughout the world. However, as market demand for the illegal services of prostitutes remains high, black markets are usually found catering to such demands. Prostitutes in such areas generally operate with some degree of secrecy, sometimes negotiating price and activities through codewords and subtle gesture. Additionally, in areas such as the Netherlands where prostitution is legal but carefully regulated, illegal prostitutes exist whose services are offered without regard for legal requirements or procedures. Image File history File links Wiki_letter_w. ... Whore redirects here. ... A code word is a word or a phrase designed to evoke a predetermined meaning to certain listeners while disguising the speakers true meaning by allowing them to use a word that sounds much more acceptable to an average listener. ...

Firearms

In certain countries firearms remain illegal to own and/or use by civilians and even police officers. So many people who want one of these items must buy them illegally through Black market channels. Image File history File links Wiki_letter_w. ...


However, in some countries firearms are legal, although a specific licence may be required to own them. So, if the right licence can not be obtained for any reason, people will go into the black market to obtain their desired items.


The black market firearms trade remains high due to the high demand by gang culture and illegitimate collectors, etc.


Alcohol and tobacco

Black markets can also form near when neighboring jurisdictions with loose or no border controls have substantially different tax rates on similar products. Products that are commonly smuggled to fuel these black markets include alcohol and tobacco. It has been reported that smuggling one truckload of cigarettes within the United States leads to a profit of $2 million. [2] A skirmish with smugglers from Finland at the Russian border, 1853, by Vasily Hudiakov. ... Species Nicotiana acuminata Nicotiana alata Nicotiana attenuata Nicotiana benthamiana Nicotiana clevelandii Nicotiana excelsior Nicotiana forgetiana Nicotiana glauca Nicotiana glutinosa Nicotiana langsdorffii Nicotiana longiflora Nicotiana obtusifolia Nicotiana paniculata Nicotiana plumbagifolia Nicotiana quadrivalvis Nicotiana repanda Nicotiana rustica Nicotianasuaveolens Nicotiana sylvestris Nicotiana tabacum Nicotiana tomentosa Ref: ITIS 30562 as of August 26, 2005...


Copyrighted media

Street vendors in many areas, particularly in countries with loose enforcement of copyright law, often sell deeply discounted copies of movies, music CDs, and computer software such as video games, sometimes long before the official release of a title. Innovations in consumer DVD and CD burners and the widespread availability on the Internet of cracks for most extant forms of copy protection technology allow anyone with a few hundred dollars to produce DVD and CD copies that are digitally identical to an original and suffer no loss in quality. The copyright symbol is used to give notice that a work is covered by copyright. ... For other uses see film (disambiguation) Film refers to the celluliod media on which movies are printed Film — also called movies, the cinema, the silver screen, moving pictures, photoplays, picture shows, flicks, or motion pictures, — is a field that encompasses motion pictures as an art form or as... For other uses, see Music (disambiguation). ... CD may stand for: Compact Disc Canadian Forces Decoration Cash Dispenser (at least used in Japan) CD LPMud Driver Centrum-Demokraterne (Centre Democrats of Denmark) Certificate of Deposit ÄŒeské Dráhy (Czech Railways) Chad (NATO country code) Chalmers Datorförening (computer club of the Chalmers University of Technology) a 1960s... Computer software (or simply software) refers to one or more computer programs and data held in the storage of a computer for some purpose. ... Namcos Pac-Man was a hit, and became a cultural phenomenon. ... DVD (commonly known as Digital Versatile Disc or Digital Video Disc) is an optical disc storage media format that can be used for data storage, including movies with high video and sound quality. ... CD may stand for: Compact Disc Canadian Forces Decoration Cash Dispenser (at least used in Japan) CD LPMud Driver Centrum-Demokraterne (Centre Democrats of Denmark) Certificate of Deposit ÄŒeské Dráhy (Czech Railways) Chad (NATO country code) Chalmers Datorförening (computer club of the Chalmers University of Technology) a 1960s... Software cracking is the modification of software to remove protection methods: copy prevention, trial/demo version, serial number, hardware key, CD check or software annoyances like nag screens and adware. ... Copy prevention, also known as copy protection, is any technical measure designed to prevent duplication of information. ...


Such operations have proven very difficult for copyright holders to combat legally, due to their decentralized nature and the cheap widespread availability of the equipment needed to produce illegal copies for sale. Widespread indifference towards the enforcement of copyright law on the part of law enforcement officials outside of First World countries further compounds the issue there. The terms First World, Second World, and Third World were used to divide the nations of Earth into three broad categories. ...


See also

Spiv is a British slang word for a person (invariably male) who makes a living by shady dealings, usually by selling goods of dubious provenance. ... The term Wide Boy first appeared during the second world war in the UK. Some enterprising people took it upon themselves to exploit rationing and do deals with American servicemen to supply locals with much needed luxuries like chocolate and stockings. ... This article or section does not adequately cite its references or sources. ... Business ethics is a form of the art of applied ethics that examines ethical rules and principles within a commercial context, the various moral or ethical problems that can arise in a business setting, and any special duties or obligations that apply to persons who are engaged in commerce. ...

Compare

This box:      The underground economy or shadow economy consists of all commerce that is not taxed. ...

External links

  • War on Junk: Black Market Satire
  • The Effects of a Black Market Using Supply and Demand
  • Information on Black Market products

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