What is a black market?

Article by Colonel Nogov  on  Jan. 15, 2015

I think there is a misunderstanding about what a black market is.  There definitely is among the main stream media.  I was recently reading an article in a main stream newspaper and the author was talking about how some thieves had stolen some products and were selling them on the “black market”.  Reading on, it turns out the items the thieves were selling were not black market items.  They were simply selling stolen goods.

Apparently this author thought that selling any type of stolen goods is selling on a black market.  That is not the case.  What defines a black market?

A black market is selling goods or services voluntarily agreed to by the parties involved, that are outright banned by the government or sold in an unapproved way by the government.

Let’s start with an easy one.  Marijuana.  Marijuana is a black market item in most states because the substance is banned by the government.  To sell marijuana is to operate on a black market.  This is true whether you grew the marijuana yourself, purchased it from a wholesaler or stole it.  It is the item that defines a black market.

What about prescription drugs?  To sell prescription drugs is to operate on either a white or black market because the drugs are not outright banned.  A pharmacy that sells prescription drugs is operating on a white market.  They have gotten approval from the government to do so.  They’ve gotten a license and must follow the rules the government dictates.  Someone selling prescription drugs on the street is operating on the black market.  It doesn’t matter where they got the drugs, even if they were obtained legally.  The government doesn’t approve of this, therefore it is a black market even though the drugs themselves are not outright banned.

What about ordinary items like timber?  Surely timber is always a white market item.  Well no.  If someone has a piece of land with timber on it and  wants to log it and sell it to a mill, they first must obtain permission from the government and pay some fees.  If they do that, they are operating on a white market.  If they decide to log their timber and sell it without first obtaining permission, they are operating on a black market.  If permission is required by the government to engage in a certain activity, even though it is legal activity, and you fail to do so, you are operating on a black market.

One example most people don’t think of is labor.  Hiring a worker off the street and paying them cash is operating on the black labor market.  In order to hire a worker, one must conform to labor laws.  Minimum wage, workmans comp., payroll tax withholding, etc.

What’s the significance?  People who believe in freedom, libertarians, anarchists, etc., advocate legalizing all black markets. It’s about freedom.  People should be allowed to voluntarily exchange an item or service they want without government approval or paying fees to the government.  Most people, especially statists, imagine only drugs being legalized, not realizing just how many black markets there truly are.  Or they imagine libertarians are suggesting legalizing theft and murder.  Assassination is not a black market!  The second party involved, the targeted victim, does not agree to the arrangement.  Even though it seems like a market, one person is hiring another persons services, it’s not.  It’s a conspiracy to commit murder through the use of an agent.  Murder is not a voluntary transaction.

Getting back to stolen goods.  Selling stolen goods may or not be operating on a black market.  If someone breaks into their neighbors house and steals their power tools and sells them on ebay, they are selling stolen goods on a white market.  It is perfectly legal to sell power tools on ebay.  If someone steals a marijuana growers crop and sells it, they are selling stolen goods on a black market.  It is the good or service being sold that defines the market, not who’s property it is.