Tuesday, March 22, 2011

The White Market

When we lived in the northeast and had to fly back to Texas to visit family, we typically took a taxi to and from the airport. The airport was miles from our home, and the drive required a major commitment of time. We were reluctant to call upon friends to take us. In most American metropolitan areas, a ride to the airport is the sort of arduous service that only family or very close friends ("like family") can normally be expected to provide. The use of the taxi added nearly $100 to our cost of travel. Had friends or family taken us, we would have saved $100. Put another way, a trip to/from the airport was worth about $100, even if we had gotten it for free.

The provision of free goods and services within families and among friends I term the "white market." This market is very large, surely larger than any black market and quite possibly larger than the market of monetized exchanges we normally call "the economy". For if a monetary value were attached to all of the goods and services performed and received for free by, say, a small family, we would clearly see that a household of even modest monetary income is actually close to being a million dollar operation. Consider just the variety of goods and services generated by the family: meals are prepared, tables set and cleared, laundry washed and folded, finances maintained, bathtubs scrubbed, lawns mowed, children dressed, watched, tutored, and disciplined. Fragile psyches are lovingly shored up over a cup of coffee or a bowl of ice cream. Friends are hosted. Aging grandparents are driven to doctor's appointments. Information is conveyed--sometimes of professional grade, such as medical advice, and sometimes of more pedestrian value, such as the best place to get your muffler replaced.

Is it even possible to complete the list? We only know that virtually everything family and friends do for each other for free, is done among strangers for a price and often, sad to say, not nearly so well. If we must make the dollar the measure of wealth, then let us attach a dollar-value to everything and see exactly how much we take in, and give out.

We certainly hope that the goods and services flow about evenly in all directions, or at least in directions where they are not wasted. But in any case we cannot deny that vast amounts of wealth are being generated that are never properly accounted for by our present lords of coin. The very word "economy" originally meant the maintenance of the household, but economists confidently track the world of monetized transactions, which is quite another thing.

If the truest measure of wealth must include the vast network of in-kind goods and services generated in the white market, then two conclusions must follow:

1) One's monetary income is only a part of one's total income, and likely not the larger part; and

2) True poverty is not so much the lack of money, but the lack of family and friends willing to provide goods and services for free.

Taxi, anyone?


  1. I might disagree with your final point number two. Urban poverty is certainly marked by a concentration of people with limited income. While many of the Urban underclass have extended families, they almost all have a pathology of no father in the house. Many Grandparents on Chicago's West Side, in the poorest part of Brookly or Boston's Dorchester neighborhood are raising their grandkids or great grandkids for an absent parent. So perhaps the last generation who had a decent job with a high school education or the last generation not destroyed by addiction, is left to raise two subsequent generations on a fixed income. I'm not discounting the idea of you post for society in general, but the example of going to the airport is out of reach for most inner-city families. I have been both giver and receiver of the kind of social network you describe. But I think systemic poverty in our nation mitigates your statement above.

  2. I argue that prosperity is a function of non-monetary as well as monetary resources. If this is so, then poverty must be a lack of such resources. I emphasize the non-monetary ones because their importance is often not fully recognized.

    I think we agree that the absence of a father is a huge deficit in a child's non-monetary resources. I question whether "systemic poverty" is possible in a stable, reasonably functional two-parent family. At the very least, the poverty of the parents will not continue with the grown children, who, being enriched with the non-monetary resources of mom and dad, will be capable of acquiring sufficient monetary ones.

  3. Sorry to be late to comment, Pr. Joseph.

    I grew up one of eight brothers, and my dad was our only income, a self-employed carpenter who was at best only a fair businessman. We were well below the poverty line, but my parents were averse to food stamps and other gov't largess. Vacations were public campgrounds. I never took a plane ride till I was married, but remember driving my uncle to the airport (an hour each way). I remember also cutting and splitting wood for our two wood stoves, weeding the garden, unloading scrap aluminum for my dad to recycle, picking beans, peaches, strawberries, etc. In terms of money we were poor; in terms of Pr. Joseph's 'white economy,' we were rich. Of my six surviving brothers, those of us in stable marriages are now well over the poverty line (even investors). I find there is no such thing as systemic poverty, just systemic bad habits.