Crisis and the emergence of illicit markets: A pragmatist view on economic action outside the law

Matías Dewey

No 14/6, MPIfG Discussion Paper from Max Planck Institute for the Study of Societies

Abstract: Although illicit exchange has also been an organized, silent, and ever-present response to harsh economic crisis, only protest and social movements have captured scholars' attention. In order to fill this void, this paper analyzes the emergence of illegal markets under situations of social breakdown. I claim that an illicit market emerging under socio-economic crisis conditions might be understood as the result of a constant valuation process and the intervention of what Herbert Mead called generalized others. In the new arena of exchange, individuals are able to anticipate the reactions of others, inhibit undesirable impulses, and guide their conduct accordingly by visualizing their own line of action from a generalized standpoint. This approach to illicit markets is based on a critical reading of two other approaches: the anomie theory and the field of organized-crime studies. Both perspectives, according to the argument, operate with a model of action characterized by fixed ends and means, a priori assumptions that hinder the ability to perceive the gradual and transforming dynamics of a crisis situation. The paper also offers empirical evidence on the process of the emergence of an illicit market under a crisis situation. By referring to La Salada market, an arena of exchange which emerged during the 1990s in Argentina, I describe a process characterized by an intensification of communicative activities, the adjustment of mutual expectations, the search for definitions that legitimate expectations, and role-taking in the market.

Date: 2014
New Economics Papers: this item is included in nep-hpe
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