A new social composition

The neat division we assume between the well-regulated economy and the informal, underground economy is not the neoliberal way. Today our laws, norms, regulations and above all our ‘beliefs’ are no longer viable.
Mario Antonio Santucho
10 February 2011

The year 2001 marks a rupture in Argentina and a good part of the Southern Cone in Latin American. This is a rupture born of social struggles and demands that questioned the premises of neoliberalism. From 2003 onwards, new progressive governments tried to take over the challenge, though their vision was far-removed from the wishes of the ‘2001 movements’. With a positive global traction, those administrations succeeded in launching a neo-developmental economic cycle.

However, there is something that doesn’t fit: even as production systems and market management are modernized/neoliberalized, the informal economy grows, precariousness consolidates, and illicit business spreads. Massive informal trade fairs, rapidly spreading underground workshops, together with transnational business-networks proliferate, without state authorities managing to regulate them.


The experts call them “hidden circuits”, though they are invisible only to their measuring instruments. “Good and ethical businessmen” complain about tax evasion though they themselves profit from the precariousness arising from everything from flexible working conditions to lower costs. Last but not least, journalists and officials regret this because “we will never be a serious country”, even though they are quite aware that illegality is part of the mind-set of all politicians.

The illegal commerce in products and services has ceased to be a marginal phenomenon. Each one of us is linked in daily life with some expression of informality.  Much of the clothes, entertainment, food and medicines that we consume, only mentioning the basic needs, are procured in this bastard form. Such informality has rapidly become a network without a centre, that serves as a backup to our lives, preventing our disappearance into the abyss of the non-existent. This precarious production that originally was confined to the margins of society, has managed to infiltrate downtown and into the major shopping chains.  What before was synonymous with the ghetto and ‘exception’ today possibly constitutes the nervous system if not the backbone of national production.

If we add the billionaire swindles that state corruption as well as the financial system habitually consent to, plus the compulsion to employ slave-labour as manifest in the largest transnational companies, it would be wise not to take so seriously all those who still trust in an immaculate and efficient process of capitalist modernization.

The result is the progressive dissolution of the boundaries between legal and illegal.

Wherever the law pretends to be operative, today, it should recognize the sheer amount of irregularities that exist in our societies, with which one has to daily interact.

How do you govern under these conditions?

The authorities might try to “bleach” informal initiatives, by persuading entrepreneurs to go straight in exchange for relief on their  fiscal obligations, or they might exercise their repressive capacity to liquidate illicit mechanisms. In either case, it’s not enough.

In those territories where ‘informality’ turns out to be the norm, mechanisms of self-regulation and forms of government have arisen that do not operate from state sovereignty as their basis, nor are they protected in the legal discourses that govern capitalist commercial activity.  They are parallel powers that grow in the gaps and they have a huge impact: they charge their own taxes, they exercise their own constraints, they build their own legitimacy; they offer multiple commercial services (even import and export opportunities), possess weapons and they utilize them. They also control their own mass media.

These powers that historically were called ‘mafias’, today live side by side and intertwined with state institutions, unleashing a complex form of governance which is increasingly difficult to oversee.  Since it is impossible to discern where the anomaly finishes and where the authentic management of a nation-state begins, the thought arises that perhaps it is more sensible to simply accede to the resultant institutional hybridization. But if this is the case, then are we not obliged at the same time to think about new models of democracy?

But, all these challenges evaporate the minute we turn our gaze to the world of work. Without taking into consideration the migrants who never figure in the statistical inventories, almost half of the labour force simply remains off the books, after only a few years under a neoliberal regime. The figure gathers momentum until it is an immense quantity of workers who are occupied in the informal sector and a mass of precariousness that nourishes the staffing of private phantom enterprises and even of the state itself. This reality spoils the neo-development horizon built with all those dreams of inclusion and full employment. It shows the savage existence of another face of labour.

The new generation of social planning put in practice by almost all the governments of the South Cone, have an in-built recognition that there exist large swathes of the population who simply will not be reabsorbed into the regulated labour market, although they possess a formidable productive potential. This of course is the joker in the pack so far as the vocabulary of social assistance is concerned.

It is worth adding a last nuance to this complex panorama: the fact that this informal economy is no longer a synonym for misery. In this swarm you can see millionaire businessmen, successful brands and multinational economic groups, for whom the option of "bleaching" does not necessarily offer much competition.

It is obvious that the kingdom of the rascally underground economy cannot be considered a viable alternative to the capitalist one, since what people endure there is the worst hierarchies of a particularly ignoble existence. We should be capable of distinguishing the inner dynamics that create and redeem from those logics of death that strengthen people’s confinement and their ghettoization. But a rude immersion in this sort of micropolitics with no guarantees is the only prospect for those leftwing parties who have stayed much too close to the dominant morality with their hopes still pinned on the state.

What I want to emphasize here is the fact that the current landscape of productive cooperation is so multifaceted and possesses so many different layers, that it is impossible to think of it and still maintain a model of univocal and homogeneous development.  We are the witnesses of a new kind of social composition.  And from that submerged world, precarious and incomprehensible, a new experience of ‘the popular’ is arising. We have the challenge of interpreting it.


(This text is a variation of the Manifesto published in the Number 3 of Revista Crisis, Buenos Aires, Argentina. February/March 2011)

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