22 December 2006


Note: Another Jenius thanks to Georgia Popplewell for picking up My posts titled "Critical Mass" and "Crave(n)"

Found this quote in a United Nations document on economic development:

There are two responses for a growing informal business that faces a costly regulatory environment, (1) to grow within the informal sector or (2) to formalize and comply with the costs of regulation. Growing within the informal sector can be inefficient, and lead to a range of problems from limited access to finance to lack of credibility in the market. Complying with the costs of regulation can be very expensive, particularly where there are hidden costs that have to be paid, and officials that make use of their position of authority for personal gain.

In other words, slap a sales tax on local businesses and watch them either "grow" within the informal sector (go even further underground) or gag on swallowing higher costs, including those "hidden costs of officials that make use of their position of authority for personal gain."

In a plain word: bribes.

That both "undergrounding" and bribing will occur is without a doubt. That they will reinforce each other and create a downward spiral that hides more money is again without a doubt. What is left in doubt is how much this is going to wreck Our already-wretched economy.

Does it have to be this way? Aren't there other alternatives, less morose? Of course there are. But are these other alternatives truly possible, truly viable as realities on Our Island?

Just barely. Many businesses will try to comply, many will succeed. It will be interesting to see how many businesses suddenly "disappear," how much money seems to "dissipate" and how much power shifts from traditional hotspots to the newer denizens of sales tax offices.

You think that the shift in power can't be measured? Here's a hint: Pulsing. If various regions in Our cities and towns begin growing in spurts (on a graph, they will look like the spikes of a heartbeat), then you'll know the power shift has occurred, because the "bunching" together of supposedly-different businesses isn't a group's statistical result, it is an individual's stastical result. It could be one person, one office or one department, but it will be there and it will be conclusive.

The only thing is that by the time that graph appears, it will be too late to salvage the economic mess flowing through Our arteries like leukemia. Deregulate or decay. Procedural simplicity or pea-brained suicide. The choices are clear...but We ain't.

The Jenius Has Spoken.

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