This week, Nathan tells us about Ahmed and explains why we hardly know anything about our economy, and why we probably never will...
Ahmed knows the streets. He can scan a corner in a glance, eye the market and the competition. He can read you down to the change in your pocket.
He knows his product, he knows how to move it, and if a cop tries to step in, Ahmed shuts him down – or slips him the dirty tax. He’s been doing this a while, and he’s good at it.
He’s part of a criminal industry that rakes in billions a year while the government turns a blind eye. Ahmed and his fellow criminal scum operate with a level of organization and efficiency that makes your average legal company look like a preschool bake sale. They work in an atmosphere of constant uncertainty, never knowing when the law’s going to crack down, but business stays steady and even grows when the rest of the economy is going to hell.
They’re everywhere. On your street. Outside your house. Inside your house. If you’re an Egyptian, odds are they’re you. They’re the shadow economy, and they work outside the law – no licenses, no taxes, no rules. These sick sons of bitches sidestep the ocean of red tape and bureaucracy that law-abiding citizens are proud to choke on and call themselves entrepreneurs. Or they would, if they could pronounce it.
Ahmed’s a shoe vendor, and that filthy criminal scum breaks the law every time he hawks a pair of fake Adidas. Every night this menace strews his obscene wares across a plywood table like a smorgasbord of sin. Each misspelled logo may as well be printed on a dime bag of blow or tramp-stamped on a sharmuta.
“Gezaam, habibi, gezaam! 50 guinea!” And your soul.
The law’s helpless to stop Ahmed; there’s just too damn many of him. Thisa in’t just street vendors and coffee shops. Egypt’s calcified shell of regulation and bureaucracy has smothered enough manufacturers, supermarkets, and restaurants that they’ve fled to the shadows, tossing it all away to take up a life of crime. Ahmed’s everywhere – he’s cooking your food, he’s building your house, he’s fixing your car.
No one knows how big the criminal underworld is (how the hell are you going to count it?), but most estimates put it at a third of the entire economy. It employs more people than either the government or the private sector. A study in 2004 set the total value for all the lawless businesses in Egypt at about $400 billion in today’s dollars, which according to economists is precisely one metric fuckton.
This is kind of depressing for those of us whose job it is to stare at economic data all day. It means that the system we think we’re analyzing is really a hollow mimicry of the real economy. We pretend that the world that can be measured is all the world that matters, but until our spreadsheets have a column for Ahmed’s yearly shoe sales, we’re just making shadow puppets on the wall.
The thing that really pisses us off? Ahmed’s better at this than we are – better than the formal sector, anyway. He can hire a worker or fire him whenever he wants; same trick’ll cost you an average of three months’ severance pay in the legal world. He hears about market changes at the speed of gossip, which makes the internet look like a horse cart on the Ring Road. He doesn’t need an empty certificate or license to do his job, and if he comes up with a better way to sell, he just does it – and takes whatever risks or gains that come with it.
Good thing the slick bastard doesn’t get off too easy. The street’s got its own tax, called the dirty tax, and it gobbles up just as much as the normal kind. He pays it in bribes, in stolen merchandise, in pay-offs to bigger fish. He pays it in the daily humiliation of being stepped on and shit on and doing business on the wrong end of an economic apartheid.
Ask Mohamed Bouazizi what happens when the dirty tax gets too high.
Banks aren’t going to lend to Ahmed, and business insurers would laugh at a claim. If he’s sick or misses work, he goes from squeaking by to going under. These days the criminal underworld is short on cash, like the rest of the country, and Ahmed’s making ends meet by borrowing from friends and family. Multiply that by a couple of million Ahmeds and you’ve got a serious problem.
Most of the public discussion on the criminal underworld (or “the informal sector”, if you’re a bleeding-heart Commie) has centered on how to incorporate them into the formal economy. Basically, they want to take the broken system that Ahmed is fleeing from and trap him inside it. While we like the idea of crushing his foul little soul, that kind of direct invasion strategy won’t work on an enemy so large and diffused.