black market

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Black market

An illegal market.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Black Market

A market for products that are illegal, stolen, or otherwise need to be hidden from regulatory authorities. A black market encompasses the horrific (e.g. human trafficking) as well as the more mundane (e.g. participating in the market to evade taxes). Legal products on a black market are usually less expensive than on the regulated market because sellers do not pay taxes on their goods and services. That said, there is little or no recourse for the customer if and when a black market product fails. It is worth noting that black markets tend to be largest in jurisdictions where there are the most regulations and government monopolies. It is also known as an underground market.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved

black market

an unofficial or ‘under-the-counter’ MARKET trading in a product which the government has declared to be illegal (for example narcotic drugs), or on the sale of which the government has imposed controls thus limiting its availability.
Collins Dictionary of Business, 3rd ed. © 2002, 2005 C Pass, B Lowes, A Pendleton, L Chadwick, D O’Reilly and M Afferson

black market

an ‘unofficial’ market that often arises when the government holds down the price of a product below its equilibrium rate and is then forced to operate a RATIONING system to allocate the available supply between buyers. Given that some buyers are prepared to pay a higher price, some dealers will be tempted to divert supplies away from the ‘official’ market by creating an under-the-counter secondary market. See BLACK ECONOMY.
Collins Dictionary of Economics, 4th ed. © C. Pass, B. Lowes, L. Davies 2005
References in periodicals archive ?
This Part describes the operation of underground economies in a centrally planned socialist state, the former Soviet Union, and in a Third World developing nation, Peru.
The underground economies have had similar effects in the Soviet and Peruvian societies, in that both clearly increased the wealth of those societies.
The contributions of these underground economies to society, however, are not merely financial.
Generally, underground economies provide comparatively greater opportunities for women and other groups traditionally subject to discrimination.
We have identified the principal contributions of underground economies to the societies within which they operate as wealth creation, superior resource allocation, and an increase in economic opportunities for the poor and other victims of discrimination.
In societies of this nature, it is not surprising that large underground economies arise.
As a consequence, except for those imaginary societies whose political systems are perfectly responsive to citizens' desires, we can expect to observe underground economies universally.
For these reasons, it should not be surprising to discover the existence of underground economies even in societies with political organizations that differ substantially from the totalitarian or plutocratic states reviewed above.
Finally, the underground economies provide substantial evidence of the success of the market in contrast to politics, in terms of promoting what might be called the Rawlsian value of protecting those least advantaged in society.(97) The examples of the Soviet Union and Peru show that underground economies provide a mechanism for those without political influence to help themselves and, at the same time, to contribute to society by providing goods and services of benefit to others.
In contrast, elements of underground economies that have no positive effect on the deadweight loss from political policies cannot be morally defended.
Those who condemn underground economies seem to presuppose that all government money is spent on true public goods.

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