I first heard the term “black market” sometime in 2007. I think fuel was retailing at N65 per litre at the time. A fellow youth in my church bought 20 litres of fuel for a youth programme and reported that she bought it at N75 per litre. Even though I could not understand why a person would opt to buy something at a higher price, I was more puzzled about what she called “black market.”
Common history says that the term “black market” originated during the Great Depression in 1931 when traders started rationing household products to prevent hoarding by consumers and scarcity among sellers. People who wanted to buy more than the rations had to visit the black market. On that note, we can surmise that the adjective “black” refers to shady or illegal dealings and that the black market is where illegal transactions take place. In reality, however, the term “black market” originated much earlier, but it was not used in the same context as it is used today.
The slave trade was abolished in many regions between 1807 and 1808, and with it, the legal flow of imported African slaves into the regions stopped. Informally though, trading Africans as slaves persisted till about 1865. Anyone who wanted to purchase a black slave thus had to visit the “black market.” As the “goods” being sold in the market were blacks, the market became known as the black market, just like one might say that he is going to the meat market. Hence, “black market” became a code name for the black slave market.
The black market today
Today, the black market is an entire economy by itself. Some people make their living from being fully engaged in black market activities. The black market has its demand and supply, traders, and customers. It embraces everything from foodstuffs, to arms and ammunition. Practically anything can be sold and found in the black market if the circumstances are right and you know where to look.
In recent times, we think of the black market more in terms of getting fuel and other essential supplies that are scarce. The long queues at the fuel stations have many people scurrying in search of black-market suppliers, being ready to pay whatever price may be required of them – this price is mostly higher of course. In most cases, the sellers get their supplies illegally by cutting through the legal supply chain. In other cases, the supplies have been gotten from individuals who scooped fuel from fallen petrol tankers.
Throughout history, different things have been sold on the black market: graphite stolen from the mines, stolen military supplies during wars, contraband goods forbidden by the government, illegal currencies, goods that were illegally obtained from their sources, and core essential goods that have gone scarce in the open market. For instance, the World Health Organization (WHO) declared organ trade to be illegal because it “is likely to take unfair advantage of the poorest and most vulnerable groups, undermines altruistic donation, and leads to profiteering and human trafficking.” However, people continue to sell and buy human organs on the black market, with organs taken with or without the permission of the donor.
If it is called “black market,” there is something illegal about it. It may be contraband goods, stolen goods or completely illegal items like hard drugs. Sellers may be avoiding taxes, price controls and regulations, and may sell above or below the price of legal market transactions. The goods will sell higher than the open market price if they are illegal or contraband goods, or if they are difficult to acquire, dangerous to handle etc. They may sell below the open market price if the goods being sold are stolen, unlabelled, or have no receipts or guarantees.
Do we need the black market?
The question of need will be a hard one to answer. However, whether it is needed or not, the black market has an economy built around it and may always exist no matter what the government does.
By law, all black market deals are illegal and punishable. This informs the secrecy surrounding everything about the black market. There is no known address to make purchases, no receipts given, no taxes paid, no guarantees given, and no quality assured. The only thing you get is the gratification of having a need met. That said, keep in mind that when you indulge in a black market transaction, you bear the entire risk yourself as there is no legal cover for what you are doing. This is why engaging in black market transactions is highly discouraged.