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Everyday forms of popular resistance
Monthly Review, Nov, 1988 by Don Nonini
It is an illusion that the major effects of' the underground economy derive largely from barter between affluent professionals, e.g., physicians trading medical examinations with accountants in return for tax advice. Although the per capita value of such bartered services may be high, the 'number of people involved is relatively few. Instead, the vast majority of people involved in the legal-source income part of" the underground economy are not professionals but working-class people, and their work within the underground economy provides a crucial element in their personal or family budgets,
Economists include within the legal part of the underground economy such practices as working "off the books" or
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moonlighting," do-it-yourself repairs, bartering of goods and services among workers, working while collecting disability or unemployment insurance, working for unreported tips, covert rentals, and even growing one's own fruit and vegetables for personal consumption or sale, whenever taxes are not paid. Examples of benefitting from these activities given in the literature appear far more often to be those of working people than of professionals or managers. Thus, we read of waiters or waitresses failing to report tips, carpenters working weekends doing house repairs for cash, unemployed writers doing freelance editing, or retired couples renting out rooms to borders. The largest forms of sales from so-called "Informal suppliers," according to the IRS, reflect home repairs, food, child care, domestic service car re air, sidewalk vending, flea markets, lawn maintenance, etc.-amounting, by the way, to an estimated $41.8 billion nationally in 1981.'
Thus much of the legal part of the underground economy represents a set of' institutions that constitute the "poor persons's' tax dodge," which explains why there has been so much animosity toward it within the capitalist state and the largescale corporate sector. The importance of this form of passive and nonconfrontational resistance should not be underestimated, for this evasion of so-called "responsibility" for funding the North American garrison state, militarism, and the repressive institutions of "friendly fascism" within this country allows poor people to retain more of their own scarce resources, and avoids the more regressive effects (c.g., sales taxes) of the federal and state tax codes. This will be evident from an estimation of its financial scope: for the years 1974-1981, conservative estimates by economists of the legal-source underground-economy portion of the national economy Indicate that it has increased rapidly in absolute numbers over this period, and that it has ranged somewhere between 4 and 8 percent of the annual Gross National Product,-' Moreover, it appears to have been increasing at as high or higher rates than the GNP; and according to the IRS, it has grown even when inflation is allowed for. Although the underground economy cannot by itself retard the development of the war economy, it reduces the potential effectiveness of another partial solution to the longterm deficit crisis of the state-that is, significantly increasing regressive taxes on working people. Insofar as this specific crisis is clearly related to the deepening general crisis of late twentieth-century monopoly capitalism, the effects of resistance within the underground economy should be taken more fully into account in radical analyses of the general crisis.
