Stunning New European Strategy Against the Shadow Economy: Study It More

Yet another European chattering society
chimes in with a report on the shadow economy—business and work
performed out of sight of the authorities to
escape burdensome taxes and intrusive regulations. This time,
the European Economic and Social Committee, “a bridge between
Europe and organised civil society,” complains that the shadow
economy has become so big, so accepted, and so integral to life in
European countries. The solution? Well, it’s certainly not to lower
taxes and repeal regulations. Instead, the EESC wants to study the
phenomenon some more.

The group leads its press
release on the new report with its complaints:

The EESC has dedicated yet another opinion to combating
the shadow economy and undeclared work. Both topics are highly
delicate, not least because their extent and impact on the economy
differs enormously among Member States and regions, ranging from
below 10% to more than 30% of total output. They also vary
considerably from one economic sector to
another. 

“Unfortunately too many people still view the shadow economy as
a normal part of society and lack any remorse about using the
‘black market’ either to hire/provide cheap workers or buy/sell
goods while circumventing taxation. Furthermore, many countries
still lack a clear stance on the shadow economy and undeclared work
“, says
Stefano Palmieri, rapporteur for the own-initiative opinion
‘A strategy against the shadow economy and undeclared
work‘.

The EESC’s recommended solution is “adopting the Italian
methodology to measure the scale, impact and development of the
shadow economy and undeclared work.”

Well, that’ll learn those bureaucrat-dodging entrepreneurs.

The report itself, A
strategy against the shadow economy and undeclared work,
has yet to be translated into English, but a perusal of the French
version (Une stratégie de lutte contre l’économie souterraine
et le travail non déclaré) using my rusty language skills
reveals little more than verbiage and charts expanding on the
above. The complaining does sound prettier in French, though. The
charts are sourced from researchers like Friedrich Schneider, who
specializes in studying shadow economic activity. Which is to say,
this is not an entirely neglected field of study.

That’s fine. Better to have the indignant busybodies
unnecessarily crunching numbers that have been crunched many times
before than actually hassling people trying to make a buck without
being strangled by red tape.

Find a full range of Reason’s reporting on issues economic and shadowy
here.