Here’s an O.K. video featuring Hernando de Soto, on shantytowns and the global countereconomy:

I say that the video is just O.K. because it’s a good introduction to the situation (which is important and interesting, and which de Soto has done a lot of really fascinating work on), but it flounders around with some weak reformist platitudes when it comes to figuring out what to make of the situation, and where to go from it. In the presence of a massive exercise of countereconomic industry and ingenuity, De Soto rightly sees that government paper mazes and the government force which back them up have constrained extralegal workers — marginalizing their livelihoods, burning out their homes and property, and excluding them from access to sustaining and stabilizing resources like capital, credit, and reliable arbitration of disputes. Extralegal workers have responded by creating their own parallel cities and institutions through which they can produce non-statist alternatives — proudly unauthorized homes, neighborhoods, cities, informal microcredit, contracts, and ad hoc private mediation. It has allowed the poorest and most marginalized and exploited people in the world to build thriving parallel metropolises up from nothing, sometimes numbering in the millions of people, through their own labor and creativity out of little more than cardboard and scrap wood.

That’s awesome. (It’s awesome because people are awesome.) Faced with indifferent or hostile governments and exploitative plutocrats, workers respond with all kinds of hustle and creativity to make a living for themselves anyway beyond the sight or the control of state authorization. De Soto, seeing all this, is right to think it’s awesome — but then he can’t think of anything better to say or do about it than to suggest that we should reward them by straightening out and simplifying the government paper so that what they do can be incorporated into the straight economy and they can all get government paper just like the rest of us. If people’s livelihoods are extralegal, then the idea is that we should legalize them, so that they can be folded, stamped, taxed, and regulated just like the rest of us — because (we are told) we need them as much as they need us.

If you’re wondering about all those scare-quotes, they’re there because the we in de Soto’s sentence doesn’t really mean us. It’s a false we, the statist we , which people in the legally-regulated straight economy all too often use to grab at an illusion of control, and thus to identify themselves with their own oppressors. One result of which is dull reformist proposals, which have nothing better than legalization to propose as a solution to the problems that arise from living outside the government law.

It’s not just that legalization campaigns mostly don’t work.[ ] And it’s not just that their end results will inevitably be to sink millions more people into a slightly-liberalized version of the same exploitative government-corporate bureau-economy that legalized workers are already sunk into.[ ] The real problem here is that legalization is just plain boring, and lazy, as a recommendation. It’s always supposedly motivated by a concern for practicality — but practically speaking, what illegalized people need is not to get good and legalized like everyone else. What they need is not government recognition, it’s social solidarity and minimal security. Specifically, security against the threat of government violence against those who don’t have official papers. And there are two ways to try and get that. One way is to try to get everybody papers. The other way is to make it so that you don’t need papers to live your life.

The first approach — the out of the shadows sort of approach — treats poor people as if what they’ve built for themselves isn’t good enough, as if they need to be admitted to the legally-authorized official economy in order for what they do to matter. The second approach says that what poor people have built is not just some half-real shadow economy, but a real social achievement worth defending. De Soto has it exactly wrong: the regulated economy depends on black markets and spontaneous economies to keep from imploding under its own bureaucratic weight. But the countereconomy doesn’t need the regulated economy at all. Or, more to the point, it doesn’t need the regulators.

Instead of protecting people’s homes and livelihoods with government paper, they can be protected by organized people, We need new techniques, new institutions, and new social relationships that will ultimately help us to insure against, to evade, to undermine, to resist, and ultimately to disarm government coercion when it comes for our homes or our jobs. Barn-raising instead of bank credit to build unlicensed homes, and social solidarity and people-powered blockades to protect them from government demolitions. Tools for confidential exchanges, underground communication, and mediation outside of political courts. Networks for wildcat strikes and boycotts and shop floor actions to resolve labor disputes rather than bureaucratic arbitration. Solidarity and safety can really mean anything your awesomeness can devise; but it sure doesn’t need to mean more government paper. We don’t need their stinking legality. What we need is a consensual alternative.

There ain’t nothing wrong with illegality that can’t be fixed with more extralegal grassroots social organization.

Don’t legalize; organize.

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