Lecture on the Informal Economy and System D

Introduction

• Photograph of Makoko, Shantytown in Lagos, Nigeria.
  • Built over the lagoon with no streets, shops come to people.
  • Example of business synergy: Boat builder selling directly to community.
• Ogun Dairu in Makoko smokes fish sourced from the North Sea, exemplifying global business.

Informal Economy Overview

• Informally referred to as black market or underground economy, but is open and visible.
• "System D" derived from French term "débrouillardise" meaning self-reliance.
• Historical context: DIY economy not favored by governments.

Case Studies in Lagos

• Olososun Dump:
  • Largest dump in Lagos employing 2,000 people.
  • Andrew Saboru's journey from scavenger to scrap dealer earning twice the minimum wage.
• Oshodi Market:
  • Compared to Borges' "Aleph" - a place where everything exists.

Economic Impact

• Informal economy involves 1.8 billion global workers.
• Potentially second largest economy if unified, worth $10 trillion annually.
• System D is crucial for employment and egalitarianism.

Corporate Involvement

• UAC Foods:
  • Sells Gala Sausage Rolls via street hawkers, not in stores.
• Procter & Gamble:
  • 20% revenue from small, informal stores.
  • Recognizes importance of informal market segment.
• MTN in Nigeria:
  • Shifted strategy to selling airtime through unlicensed vendors.

Global Product Distribution

• Guangzhou Electronics Mall:
  • Source of pirated phones sold in Lagos.
  • Discusses global distribution of counterfeits.
• Piracy as Market Research:
  • Used by companies to track product popularity.

Taxation and Legal Concerns

• Informal economy largely untaxed, reflecting government transparency issues.
• Example of corporate corruption: Siemens' global bribery.

Theoretical Perspectives

• Cooperative Development:
  • Suggested by Roberto Mangabeira Unger as a way forward.
• Relative Facts:
  • Paul Feyerabend emphasizes differing definitions and perceptions.
• Alternate Economies:
  • Allen Ginsberg's idea of alternative currencies and barter systems.

Conclusion

• Informal economy as a significant global developmental force.

Thank you for attending the lecture.