Reason For The Growth Of Infor
Reason For The Growth Of InforIn this essay I will endeavour to provide reasons for the phenomenal
growth of the informal economy. Firstly, I will provide a brief definition
of informal and formal economies. I will also discuss the inequalities and
instability of the formal economy environment. Focusing on the
manoeuvres which manufacturers and individuals use within the informal
economy to alleviate these stresses. I will also put forward a concept of
�Interactive Distribution� which combines the best of what informal and
formal economies have to offer the economic environment. Creating a
powerful system of a informal distribution of goods and services. Thus, it
is my opinion that these inequalities within the formal economy, compared
to the attractive informal alternatives available to individuals and
corporations ensure the growth of the informal market.
Finally, I will give an overview of New Zealand�s history, politics and
economy from which I will submit possible New Zealand reasons for the
growth of informal economies. Alternative income, created from the
informal system such as the fleamarkets around New Zealand. Also I will
discuss the cultural significance informal (traditional) economies have for
the Maori people of Aotearoa.
An informal economy co-exist, within the formal or capitalist economy.
Working entirely or partially outside the framework of production and
distribution of goods and services within our economy. The formal
sector is our capitalistic principles that regulates our market. Capitalism�s
main function in my opinion is to continually replicate itself establishing
its set of structures and regulation, to the benefit of few.
The inequalities that exist within our global economy concerning labour
and wages have seen the rise in unemployment and an increasing gap
between rich and poor. The lack of economic opportunities have also
plagued our formal economy placing pressure on individuals and
manufacturers to seek new forms of production and distribution.
As Moser (1978) stated
The �accelerated growth� model ... aimed to increase overal
national growth through policy of accelerated industrialisation ...
industrial expansion would result in increased wage sector
employment on the basis that there was inevitably a positive
relationship between the growth of output, employment and labour
productivity, while the �filter down� effect would lead ultimately to
the redistribution of resources and income throughout society ( p.
1042).
This theoretical assumption has fallen well short from it�s original goal.
As the redistribution of resources and income in our competitive
environment have see the polarisation of wealth for the few and the
increase poverty around the world.
Majority of businesses around the world are involved in retail sales which
have their own problems such as expensive overhead, wages,
advertisement, storage facilities and distribution. All adding up to
decreasing profits and an increasing cost to consumers. The informal
economy gives multinational corporations the opportunity to subcontract
assignments to informal organisations.
By making use of informal distribution networks, industries
eliminate the substantial cost of maintaining a permanent sales
force (Portes, Sassen-Koob 19XX p. 38).
Our capitalist thirst for profit has encouraged exploitation of minorities
and underdeveloped countries such as Nike in China and sweatshops in
Mexico.
Individuals also have the opportunity to benefit in this volatile
environment. Individuals or groups of individuals from...
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