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Free «The Illegal Economy» Essay Sample


The illegal economy activities in the American society are growing day by day due to various changes in the economy and change in social values.  Different states have encouraged development of free markets in the economy which has encouraged the growth of the black market. This is because people are finding illegal businesses more rewarding as compared to the legitimate businesses. The growth of the illegal economy brings the subject of whether to legalize some of these underground businesses or put effective laws in place to control some of these businesses (On the Concept of Illegal Economy 2).

The illegal economy is considered to be free in its absolute sense, meaning it is free from any other control or regulation. This means they operate without any government law to govern the terms for their operations. The only thing that exists in law is that these underground businesses are illegal and punishable. But what we experience in the American society today is that these underground crimes are continuing to thrive and they contribute a reasonable amount of GDP to the economy which is in most cases unaccounted for.



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 The illegal economy may be composed of: dealing with a business that provides an illegal service, dealing with illegal goods, and dealing with legal goods in an illegal manner. My argument will be based on the effects of these businesses to the economy and their social implications in the society. I will try to bring the aspects that are involved in these underground businesses. I will deal with one problem at a time.


Prostitution is considered to be one of the oldest professions in the world, over the ages it has advanced and become more commercialized. Many scholars have done the social studies and come up with different causes of prostitution. Sanger (200) says that prostitution is on increase due to loss of communities values. He argues that the community has lost in touch with its original values and embraced modern values. Looking at the trend of prostitution in American society we will realize that it has underwent many changes in the modern times. There is increase in the number of people who are engaging in commercial sex business. The number of brothels in the cities is on the rise in the underground market. The illegal business has gone hi-tech with the use of modern technology and the internet. This is portrayed by the increase in the sex businesses in the social sites which are being used as the modern marketing tool of this business.

 According to Sanger (445) there are more and more underage women who have joined prostitution in New York today. He says that men prostitution is also on the rise. Looking at these facts we realize that this underground business is on the rise. We must fist accept that prostitution business although illegal it has some contribution to the national economy, first there is income generation to the business operators and also the creation of employment. But when we look at the cost benefit analysis we realize that this business is doing more harm than good in our society.

Prostitution business is a costly affair to the national economy, this is because of the economic and the social cost associated with it. The government spends millions of tax payers’ money to treat diseases associated with the prostitution business. The amount of money spent by the government to provide medicine to patients with venereal disease and HIV is high. The number of people needing these drugs is on the rise due to the consequences of the prostitution business. The burden is big because most of these businesses don’t pay taxes to the government and the money earned goes to a few individual’s pockets because the business is illegal and consequently escapes the tax man.

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 Prostitution is considered as a social crime and it has very many social impacts in the American society.  Looking at the current trend we realize that underage women are being used in this business which has led to exploitation of these young ladies sexually by pimps and their clients.  The young women who engage in this business usually suffer physiological problems such that they can’t adopt a normal lifestyle in future. This has also led to loss of life and self dignity. The other thing which is on the rise is human trafficking from other countries to America to work as sex slaves. When we think about this whole issue it bring stigma, it’s inhuman to take advantage of other people weakness to make money. All these implications have resulted due to laxity in the law that controls the illegal economy.  On my opinion the government should put more measures to curb the prostitution business.

Drug trafficking

 The use of drugs in the American society among the youth is on the rise, this has resulted to the rise in drug related crimes and complications in the society. This problem is largely attributed to the availability of these drugs in the streets. Drug trafficking business in US is considered to be the most profitable in the world that is why it attracts very ruthless and sophisticated traffickers. The US customs reports shows that 90 million people cross the boarder carrying trafficking drugs to the US through the air, water, and land routes. There are many criminal gangs operating on the border of United States and Mexico who smuggle drugs like cocaine and heroin in the country. (U.S.-Mexico Cross-Border Marijuana Traffic 3)

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The business of drug trafficking is rampant due to the cooperation of the authorities with the drug traffickers. This has led to the growth of this illegal business and increase of drugs in the black markets. This has made the accessibility of drugs in the American society easier. The criminals are able to buy their ways to freedom from the greedy government officials. The criminals’ gang dealing with drugs in America and other states like Colombia are getting rich day by day while the American society is getting rotten due to drug use (U.S. Drug Enforcement Agency 2).

The government should put stringent measures to curb drug trafficking in the country. The government should ensure tight security along its boarder to prevent drugs being trafficked across. If the problem of drug trafficking is minimized in the country then we can be assured of a drug free society.

Money laundering

Money laundering is the process of making money earned from illegal activities like, prostitution, drugs trafficking, and terrorist activities look as if they originated from legitimate sources. This is the major operation which leads to the survival of the underground economy. In US it is defined to be engaging in monetary transactions to cover the identity of the money source. Money laundering is the backbone of the illegal economy. According to the US Government Agencies (5) money laundering system encourages many criminal activities in the country. The report shows that if money laundering is compacted in the world financial system then the fight on other underground crimes will be made easier. This is because the criminal gangs will lack an avenue to legitimize their ill earned wealth.

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The development of sophisticated ways which criminals are using to launder their money has encouraged the growth of illegal economy in the American society. Criminals who engage in activities such as drug trafficking are able to legitimize the money and can then reinvest it in legitimate business. Money laundering is conducted through the existing financial systems like, banks, use of money order, electronic money transfers and through the money services systems. The effects of money laundering in the society are severe and involve criminal gangs who results to the insecurity of the American people. Criminals who deal with drugs which are causing the society many social problems are able to enjoy their wealth at the expense of the people. This shows that if the government is able to put good measures to stop money laundering then the criminal gangs will not be able to use the money from illegal activity and this will be a step in fighting crime in the American society.


The activities involved in the illegal economy are detrimental to the development of a healthy society. These activities have contributed negatively to the growth of our economy. This shows that the government should use its machinery to suppress the growth of the underground economy.


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