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Stealth of Nations: The Global Rise of the Informal Economy Hardcover – Deckle Edge, October 18, 2011

4.0 4.0 out of 5 stars 41 ratings

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• Thousands of Africans head to China each year to buy cell phones, auto parts, and other products that they will import to their home countries through a clandestine global back channel.
 
• Hundreds of Paraguayan merchants smuggle computers, electronics, and clothing across the border to Brazil.
 
• Scores of laid-off San Franciscans, working without any licenses, use Twitter to sell home-cooked foods.
 
• Dozens of major multinationals sell products through unregistered kiosks and street vendors around the world.

 
When we think of the informal economy, we tend to think of crime: prostitution, gun running, drug trafficking.
Stealth of Nations opens up this underground realm, showing how the worldwide informal economy deals mostly in legal products and is, in fact, a ten-trillion-dollar industry, making it the second-largest economy in the world, after that of the United States.
 
Having penetrated this closed world and persuaded its inhabitants to open up to him, Robert Neuwirth makes clear that this informal method of transaction dates back as far as humans have existed and traded, that it provides essential services and crucial employment that fill the gaps in formal systems, and that this unregulated market works smoothly and effectively, with its own codes and unwritten rules.
 
Combining a vivid travelogue with a firm grasp on global economic strategy—along with a healthy dose of irreverence and skepticism toward conventional perceptions—Neuwirth gives us an eye-opening account of a world that is always operating around us, hidden in plain sight.

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Editorial Reviews

Review

Stealth of Nations is the most exciting shopping trip I’ve ever been on. I thought I knew what ‘the economy’ is, but I had no idea until Neuwirth filled me in.” —Barbara Ehrenreich, author of Nickel and Dimed

“Herein, an intrepid journalist examines the real world of wealth creation at the very bottom of the pyramid, where it matters most.  The rest of economics will have to adjust accordingly.” —Stewart Brand, author of
Whole Earth Discipline
 
 “We are just beginning to understand that today’s advanced global economy rises along with a proliferation of informal economies. Nobody can document this better than the world-traveling journalist Robert Neuwirth. This is a must-read book.” —Saskia Sassen, Robert S. Lynd Professor of Sociology, Columbia University, and author of
A Sociology of Globalization
 
 “After reading this book you will realize that working in an office, a shop, or in a factory, earning a steady salary, paying taxes and having health insurance and a retirement account is an anomaly.  Most of the world’s workers operate in the informal sector and in this fascinating book Robert Neuwirth reveals how ‘The Stealth Economy’ works and what does it take to survive in it.” —Moisés Naím, author of
Illicit: How Smugglers, Traffickers, and Copycats are Hijacking the Global Economy

“A vibrant picture of a growing sphere of trade that already employs half the workers of the world.” —
Kirkus Reviews

About the Author

Robert Neuwirth is the author of Shadow Cities: A Billion Squatters, a New Urban World. He has received a research and writing grant from the John D. & Catherine T. MacArthur Foundation, appears nationally and internationally as a speaker and on radio, and has written for The New York Times, The Washington Post, Dwell, Fortune, The Nation, and Wired, among many other publications. He lives in Brooklyn.

Product details

  • Publisher ‏ : ‎ Pantheon; First Edition (October 18, 2011)
  • Language ‏ : ‎ English
  • Hardcover ‏ : ‎ 304 pages
  • ISBN-10 ‏ : ‎ 037542489X
  • ISBN-13 ‏ : ‎ 978-0375424892
  • Item Weight ‏ : ‎ 1 pounds
  • Dimensions ‏ : ‎ 5.89 x 1.15 x 8.55 inches
  • Customer Reviews:
    4.0 4.0 out of 5 stars 41 ratings

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Customer reviews

4 out of 5 stars
4 out of 5
41 global ratings

Top reviews from the United States

Reviewed in the United States on February 13, 2012
After being introduced to Stealth of Nations from a Wired review, I was excited to dive in and was not disappointed. Neuwirth, whose investigative journalism skills and experience were instrumental to the structure and value of the narative, spent time on the ground and clearly did his research on the topic, submitting important data points and compelling details, proposing interesting hypothesis and solution ideas in revealing and discussing the hidden-in-plain-sight world of System D (shortened from "l'economie de la debrouillardise" a slang phrase pirated from French-speaking Africa roughly meaning the ingenuity or DIY economy).

From tours of Rua 25 de Marco in the heart of Sao Paulo, Brazil: a System D-based marketplace consisting of over 8,000 merchants (~80% unlicensed or unregistered) that daily takes on an organization of its own exchanging nearly $10B USD annually, with over a million shoppers per day on important holidays; to the streets, auto part, electronic and computer markets of Lagos, Nigeria; the manufacturing centers of Guangzhou, China, the trading post of Ciudad del Este, Paraguay and the good ole' USA where System D represents the largest unregistered economy in the world worth more than $1Trillion USD annually, Neuwirth provides intimate details of the interactions and inner workings from conversations and time well spent with the players in these "informal" systems.

In addition to the birds eye view of the lives of System D participants, I particularly enjoyed the chapter Against Efficiency where Neuwirth delved into the history and opposing economic thoughts of System D. And being a fan of de Soto, Why Not Formalize the Informal? presented some interesting counterpoints to some of de Soto's key assumptions underlying his books The Other Path and The Mystery of Capital.

The global System D structure employees 50% (and growing) of the world's workforce yet produces just 10% of its wealth. Stealth of Nations provides an entrance into the roots of this economic and social inequality reality and the barriers to individual and international progress it presents. Many would like to relegate these challenges to the developing world, but I (and about 99% of the rest ;) would contend that they are as important in America today as anywhere. For those willing to open mindedly explore this important conversation, Stealth of Nations provides an excellent opportunity to do so. The bibliography is an excellent info source, as well. Happy reading.
7 people found this helpful
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Reviewed in the United States on January 26, 2015
Three and a half stars. This was a very difficult book to for me to rate. It is a well written and entertaining travelogue style look at the informal economy around the world. It doesn't matter if you call it Systeme D, Jua Kali, or the grey market; it exists and it is huge.

All throughout this book I was reminded of my High-School English teacher, who tried to relate "The Stranger" and "Siddhartha" (existentialism and situational ethics) with a profoundly Lutheran fundamentalist perspective. She didn't do a bad job, she just had great difficulty in separating the material from who she was. Neuwirth has a much similar problem; he seems to glorify in the ingenuity and determination of people trying to get by yet he is repulsed by the sheer dynamism and indifference of the free market. The whole book is a dialectic argument with himself over the power of the marketplace to provide solutions, and the desperate want and need to control and regulate it.

Keynesian economists despise and belittle Systeme D because they cannot understand it, other Statists fear Systeme D because they cannot control it. The future of freedom is here, if it isn't first crushed by collectivists trying to 'help'.
6 people found this helpful
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Reviewed in the United States on October 22, 2011
At a time when we have serious concerns over unemployed and underemployed, about regulation that strangles or stifles business, and taxation and tariff rates that drive prices through the roof, this fascinating little gem grabs you from the start with stories and data about the 'real' economy around the world, where currently fifty percent (and moving towards sixty percent) of the billions of working people in the world are doing so in the 'informal' economy, below the radar, off the official record, not part of world GDP. Neuwirth cites an estimate that this 'informal' economy amounts to about $10 trillion dollars annually, or about one-eighth of the world economy. Why so many people and so little economic impact? Because the margins in this business are razor-thin, where unfettered and, yes, in some cases, illegal, immoral and unscrupulous business better expresses capitalism than does the image of the multi-billion dollar global corporation.

Working his way through South America, China and Africa, Neuwirth meets and understands the people, their motives, and their practices. He is not writing about the darkest side of the economy, i.e., sex, drug and nuclear weapons trade, but rather the basic human element of survival, where entrepreneurs with a real flair for business work deals between Nigeria and China, dealing only in cash, bribing and smuggling, and providing a living for tens of millions of people. One can't decide if this is the solution to world economic problems, the 'real' economic problem itself, or just a grey underground world of questionable practices. Yet as scholars and over the years have noted over the years, the practice of these entrepreneurs are not that morally different from that of the established corporations. While I am not ready to go that far, read it and decide for yourself.
24 people found this helpful
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Top reviews from other countries

M. Lorenzo Warby
5.0 out of 5 stars Revelatory
Reviewed in Australia on November 6, 2023
An enlightening work on an overlooked global reality. Commerce is what folk do. Following the actual patterns of commerce is much more useful than talking of “the market”.
Frank Fremerey
5.0 out of 5 stars very important book for all interested in human development
Reviewed in the United Kingdom on July 30, 2018
Very important book for all interested in human development. I bought this book, read it, will reread it, bought another one, gave it to a friend. The problem discussed here affects us all and willl affect us even more as time goes by.

We have institutions like governments, administration, social care, public access ressources like busses, trains, schools or baths, but many of these are underfunded in a lot of countries worldwide.

One important reason is corruption and as it might start at the top of the foodchain it trickles down until the simple worker of police men start to not see any benefit in funding these public institutions and stops paying for them.

Today we see 50% of work done in the "informal sector", which means: no taxes, not trade unions, no health insurance, no unemploment protection, no health protection for the workers and no protection for the environment.

We see that the informal sector is growing worldwide and that this will make the financing of public care next to impossible in many regions. Prediction says we will approach 90% informal work within this century.

The book describes the problem from the bottom up: How is it to be employed in the inormal sector, smuggeling good from China to Africa and distributing them there. Or working the informal markets of Southern America.

Great reportage, very deep background thinking and a glimpse of possible ways out of this huge global economical crisis not seem by many yet.

highly recommended reading, esp for people involved in market regulation.
Abhinav Chaturvedi
4.0 out of 5 stars How Adam Smith would have rated it?
Reviewed in India on July 12, 2013
This is a book which takes you on a journey into a world which we encounter most of the time in our life.
Shares facts and narrates stories about the activities and people who survive and also who believe in once thing that is making profit. It is an account of s type of economy which is now even more than$10 trillion but not legal.

A must read! It is an eye opener.
One person found this helpful
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George Green
5.0 out of 5 stars Eye-opening Book
Reviewed in Germany on August 11, 2012
A stunning, eye-opening book! Great that the author tackles this vital subject, not theoretically but rather hands-on realistically, and that he does not shy away from trying to provide an outlook on future developments required (i.e. "solutions") - difficult as this is in this neglected area. Sometimes a little repetitive and a little long on descriptions, but therefore making the point(s) all the better!
MFly
4.0 out of 5 stars Informal Economy
Reviewed in the United Kingdom on April 7, 2014
Good read really interesting take on the value of the informal economy from Robert Neuwirth. Particularly like the comparison between informal market places and Borges 'Aleph'.