What is the Black Market?

We usually use the term black market colloquially, to refer to those economic activities that are carried out clandestinely or outside the law. However, in economic terms the definition of the black market is somewhat broader.

The concept of black market has appeared in history related to states and governments that exercise excessive control. About him price or supply of certain types of goods. In addition, times of crisis also favor the appearance of what is commonly known as the black market. As well as, those periods during which there is a limited supply for a wide demand.

The black market is also commonly called submerged economy. In a clear reference to the activities that in the black market are carried out under the law. When we talk about the black market or the underground economy, two classes or types can be differentiated.

Black market types

The black market can be classified as a black market for legal products or a black market for non-legal products.

Black market for legal products

In this case, what is outside the law is the way in which the activity is carried out. In this type of black market, the income received from an activity that is legal is not declared. Nor are the impuestos corresponding to said activity. In this type, for example, payment to a professional would be framed without the latter issuing an invoice, saving the payment of taxes.

Black market for illegal products

In this type of black market, the activity carried out is not legal. It is about those cases in which illegal products are sold and the black market is not limited to mere tax evasion. This type of black market is common in the sale of drugs, weapons or even organs and people.

Leave a Comment