STEALTH OF NATIONS

A close-up look at the world of unlicensed and unregulated trade, which, in many developing countries, is the fastest growing part of the economy.

Neuwirth (Shadow Cities: A Billion Squatters, a New Urban World, 2004), who prefaces every chapter with a relevant quote from Adam Smith's The Wealth of Nations, takes readers inside what he calls System D, from the French word débrouillardise, meaning resourceful and inventive. His first stopping place is Sao Paulo, Brazil, where a vibrant street market draws more than 400,000 people on an average weekday. Then comes Lagos, Nigeria, a fast-growing DIY city of more than nine million people, many living in shantytowns, where scavengers glean recyclable goods from the dump and where System D provides not just goods but water, electricity and public transportation. Using his personal contacts with merchants, Neuwirth describes the underground trade links between Nigeria and China, including an enormous business in the piracy of electronic goods, and the smuggling industry that brings goods across the border from Brazil to Paraguay. He also details the links between major U.S. corporations and System D; how the system operates today in Brooklyn, San Francisco and other American cities; and what measures governments have taken to regulate it. Throughout, Neuwirth cites other sources to demonstrate that aspects of System D have an ancient history. He is clearly an admirer of System D, seeing in it not chaos and confusion, but communities marked by cooperation and their own codes of conduct. He argues that governments need System D markets because they are creative and provide jobs, and that System D needs governments because governments can provide infrastructure, organized ports and currency with a stable rate of exchange. Developing a space where System D can thrive offers “a vision of empowerment, employment, and global equity based, not on the abstraction of the free market, but on the concrete principles of the flea market.”

A vibrant picture of a growing sphere of trade that already employs half the workers of the world.