the informal economy

Since I have been rather dilligently working on actual schoolwork today and have earned / would like a somewhat productive break, I am going to touch upon a couple of political economy questions that have been of interest to me lately. Disclaimer: I will be the first to acknowledge that I am no economics ace. (Perhaps the first to acknowledge that would instead be my very kind Principles of Economics professor, bless him...) However, fulfilling my destiny as a northern hemisphere and generally left of center college student, I have a profound interest in development economics and political economy. We can catalog this one under "Stuff White People Like."

The political economy of Argentina is fascinating stuff, even excluding the 2001 crisis. At the start of the 20th century, Argentina was the 7th wealthiest country in the world. Wealthy people lived in splendor in the still-beautiful neighborhoods of Barrio Norte and Recoleta, reaping the benefits of Buenos Aires's wealth-inducing port and Argentina's fairly extensive railroad system. But the history of Argentine glory ends pretty early, followed by decades of stop-and-go self-perpetuating political and economic crises. (It's no coincidence that the first coup occurred in 1930, the same year as Argentina's first economic collapse.) While that former luster remains the lusty twinkle in every porteño's eye (sorry, is this creative writing 101?), the reality on the ground is that Argentina has fallen far behind Brazil, Mexico, and Chile. A quarter (!!) of the country's population still lives under the poverty line and unemployment hovers at about 10%. And in the most unofficial of ways, I personally genuinely struggle to understand how the Argentine economy functions. There are many stores and many restaurants, few of which I ever see with customers. From what I understand (again, I am no Paul Krugman here), if you lack customers your business will not make enough money to over its overhead costs and it will fold. Somehow these empty businesses keep chugging...

Aside from the storefronts, it seems to me that economy has an other active side. Both in EPIIC and my development economics class sophomore year I spent a substantial amount of time studying informal economies. At home I generally wrapped my brain around this concept by thinking of, say, urban drug trade in America's poorest communities. But in my time here I've been able to develop a fuller sense of that which comprises the informal economy -- and never moreso than when I come home from class on Tuesday nights.

I don't leave UCA (Universidad Catolica) until usually 9:15 or so on Tuesday nights. Depending on my mood -- which, after 6 hours straight of class, can be quite testy -- I either opt to take the subte (longer walk, shorter ride) or the bus (longer ride, shorter walk). I walk to the subte along Paseo Colon, one of the major traffic arteries that runs parallel to the water and along the government buildings. At this time of day, the office buildings have emptied. Thus, at 9:15/9:30, all of the garbage is thrown out of its buckets or dumpsters to be picked through by cartoneros (garbage pickers) in search of sellable recycable goods. If I take the bus I see the cartoneros sorting through the garbage between Uruguay and Lavalle, near Plaza Tribunales. Most of the sorters are young men but many are children. In my neighborhood there is a ciruja who piles his recyclables onto a donkey-drawn cart. Beyond that, there are many other signs of the informal economy. Pretty much every trip someone will enter your subway car and try to sell you socks, pens, notebooks, anything. People wash windshields or direct your parallel parking for tips. Some folks sell homemade food in high-traffic areas, from the immigration office to touristy Calle Florida. And as mentioned, petty crime is a problem.

Attempts have been made to convert some of these informal activities into formal employment, like the famous example of Argentina's organized and collectivized garbage pickers. Generally speaking, however, these examples showcase the odd duality that beautiful Plaza San Martin is merely a few blocks from the tent city at the Retiro Train Station. In the end, it's a reminder that the Argentine economy, though considered upper-middle income, is still in the developing end of the spectrum.