People use a variety of terms to refer to the illegal black market, including the underground economy, the shadow economy or the bootleg market. Whatever the term used, it refers to a system of exchanging goods outside established, regulated systems. 

Learning the intricacies of the illegal black market is part of a well-rounded education received in an online Bachelor of Science in Criminal Justice program. That’s because, despite high-profile arrests and governments proclaiming they will take action, the illegal black market continues to thrive, including on the Dark Web of the internet. 

What Is the Black Market?  

The website  Investopedia calls black markets “economic activity that takes place outside government-sanctioned channels.” They include trade in illegal goods and services, as well as in legal goods and services to avoid taxes.  

Their growth is attributable to the incentive for making a profit without the moral and ethical standards, as well as government regulations, that attempt to make a market fair and equitable for all involved.  

Traditionally, black market operators dealt only in cash. In fact, that once ranked as the black market’s most distinguishing characteristic. However, on the internet, some now choose to conduct black market activities using digital currency. 

Countries With Biggest Black Markets 

Experts can only guess at the size of the black market. However, Reason magazine reports the following countries have the biggest shadow economies. The number in parentheses represents the black market’s percentage of the country’s Gross Domestic Product. 

  • Greece (21.5%) 
  • Italy (19.8%) 
  • Spain (17.2%) 
  • Norway (12.2%) 
  • Germany (10.4%) 
  • Canada (9.8%) 
  • Australia (9.4%) 
  • United Kingdom (9.4%) 
  • Japan (8.6%) 
  • Netherlands (8.4%) 
  • Switzerland (6%) 
  • United States (5.4%) 

In the U.S., there is a long history of avoiding taxes. It’s one of the reasons that drove the War of Independence from the United Kingdom. Other examples include the Whiskey Rebellion of 1794, which happened when the U.S. sought to tax corn whiskey; the bootleggers during the Prohibition Era against alcohol in the early 20th century; and the drug trafficking that continues to this day. 

Types of Black Markets 

Black markets often deal in illicit and dangerous goods. Whether online or in-person, a black market offers a venue to purchase illegal products that otherwise could not be traded.  

One of the most profitable – and shocking – is human trafficking that moves people into forced labor, prostitution, child armies, and the market for human organs. Investopedia reports that as many as 25 million people are trapped in modern-day slavery. It’s an estimated $150 billion a year industry.  

Other black markets include:  

  • Gambling at unregulated casinos 
  • Wildlife trade 
  • Mining, fishing, and logging 
  • Drugs 
  • Firearms 
  • Explosives 

Stopping the Black Market  

Eliminating all illegal black markets is next to impossible. Many of these markets are for legal goods, but people seek to avoid taxes. For example, the United Nations reports that worldwide, the No. 1 items on the black market are clothes, accessories and shoes. 

The U.N. adds: “Some estimates put the counterfeit business at well in excess of $250 billion a year and hundreds of billions more if pirated digital products and domestic counterfeit sales are included.” 

In the U.S., the U.S. Customs and Border Protection authorities work to stop the flow of black market products into the country. The Drug Enforcement Administration (DEA) and the FBI work to curtail drug trafficking. In 2020, the DEA made 26, 264 arrests. While that number is down from recent years, it’s more than any one year of arrests between 1986 and 1995.