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Date: August 5, 2018

Subject: What keeps the black market in business

Every day billions of goods and services are exchanged on the world's markets. We see this in retail stores, securities exchanges, and other avenues. These mediums of exchange are regulated by governments and commissions that seek to ensure the smooth, fair, and legal transfer of goods. However, this is also another way consumers can get access to the products and services they desire while flying under the government's radar. This is through what is referred to as the black market.

The black market can be defined as a market with several types of illegal trading of both goods and services, which cannot satisfy demand due to scarcity or heavy taxation. Therefore, a market can be referred to as the “black market” mainly because of three reasons;

1. The illegal structure of the transaction.

2. The illegal nature of services or goods sold.

3. The illegal structure of transaction as well as the illegal nature of services or products being transacted.

The black market is rumored to be equal or more significant than most legal demands regarding market capitalization. According to Havocscope, the current value of the globe’s black markets stands at 1.81 trillion dollars. However, this is not the real worth of the black market capitals, since the Black market is characterized by a secret nature, which makes it hard to ascertain its actual quality. The constant rise of the black market value and black market trade can attribute the fact to the legislation put in place for the moderation of controlled services.

Some of the reasons that make the of what keeps the black market in business:

• Unrecorded transactions

• Licensing restrictions

• Outlawed controlled substances

Unrecorded transactions

Almost all of the operations performed in these black markets are unrecorded. The reason why people trade services or goods in the black markets, is because such people do not want to incur the taxation of illegal products or services. However, we cannot deny the fact that some individuals engage in black market trade, just because they were unaware that there are laws they are not adhering to. An example of how people can find themselves participating in black market services without knowing is when they hire housekeepers but do not realize they are meant to pay employment taxes.

Licensing restrictions

Another reason that makes people endeavor in black market transactions is that of the licensing restrictions that are imposed by the government on the many occupations, making individuals who cannot cope with the enormous fees engage in black markets. In some situations, the process of acquiring the required licenses for operating a particular business can be costly to a businessperson, not forgetting the long process it takes to do it.

Outlawed controlled substances

The argument over whether an outlawing controlled substance leads to the growth of the black market is a long-standing one. This measure which aimed at deterring the use of controlled substances has associations with the constant growth of the black market. The scarcity of controlled substances leads to a higher demand for these substances. Most of these controlled substances cannot be found in the regular markets, which makes the black market the only market containing them.

Here, I provide subheadings for a reason such as unrecorded transactions, licensing restrictions, outlawed controlled substances. These shortened subheadings can enable a reader to easily and quickly get a glimpse of the reasons. The explanation that follows the subtitles enhances understanding.

student

College College Business Management

Reference:

https://www.havocscope.com/market-value/