Lessons From An Underground Economy by J.G. Martinez D for The Organic Prepper
How is it possible to survive a nation with inflation rates of 20%/month and 1700%/year? The answer? The underground economy. This is the level of hyperinflation we have found ourselves with here in Venezuela, and considering the spread of inflation worldwide, it would be well worth the prepper’s time to glean what we can learn here.
Virtually everything you read dictates inflation on this scale necessitates civil war.
Yet Venezuela hasn’t seen this. Why not? Why are the streets not being taken by armed civilians?
While the main reason revolves around 20 years of disarmament and anti-self-defense teachings, I would argue that there is a second reason we haven’t delved into full on anarchy as well: our underground economy.
Underground economies keep people fed.
I’ve lived in four different and fallen South American countries, and it’s been the underground economy which has kept people going in each case.
When I used to work in the Venezuelan oil industry, our salary was taxed heavily just like everyone else’s. As expected, these taxes can quickly make it hard for a family to pay its bills.
But the underground economy? It’s completely unregulated.
I know guys with a hot dog cart who make much more money than engineers down here. And this isn’t new – our world has been like this for many years now. The guy working with the hot dog cart doesn’t pay taxes. He doesn’t pay rent. And usually, (and this is a now an “accepted” practice) these street vendors will run a wire from some nearby pole for their music and lights.
This man is a member of the underground economy. And he is just one of many.
Our stated hot dog vendor is not an isolated case either. He is part of what is keeping this country alive. In all probability, it is the men of this underground economy who likely comprise over half of our GDP here in Venezuela.
More than half of the money generated here is a result of men such as our hot dog vendor. Of course, much of this money also comes from the cartel and Russian mafia, but the point remains: it is the underground economy which is keeping the people of Venezuela (somewhat) fed.
More overreach, more underground.
One thing is for sure. The larger and more bloated the government control is, the greater the underground activity. “Irregular” business is the answer to these controls. It’s simply to be expected – especially in Latin American countries.
I believe I don’t need to explain why.
The government has seized the right to own foreign currency, trapping you in your hyper-inflated national fiat currency? A booming forex black market will spring up, regardless of how hard one attempts to stamp it out.
Store shelves are empty? Well, I know a guy who knows a guy that can get you a 20 kilo pack of cornmeal flour for a bit of arepas (a Venezuelan bread). (You should also check out our FREE Quickstart Guide to help you figure out how to keep a properly stocked larder to help your family ride out troubled times…)