Causes




Warsedit

Black markets flourish in most countries during wartime. States that are engaged in total war or other large-scale, extended wars often impose restrictions on home use of critical resources that are needed for the war effort, such as food, gasoline, rubber, metal, etc., typically through rationing. In most cases, a black market develops to supply rationed goods at exorbitant prices. The rationing and price controls enforced in many countries during World War II encouraged widespread black market activity. One source of black-market meat under wartime rationing was by farmers declaring fewer domestic animal births to the Ministry of Food than actually happened. Another in Britain was supplies from the US, intended only for use in US army bases on British land, but leaked into the local native British black market.

For example, in the Parliament of the United Kingdom on February 17, 1945, members said that "the whole turkey production of East Anglia had gone to the black market" and "prosecutions for black-marketing were like trying to stop a leak in a battleship", and it was said that official prices of such foods were set so low that their producers often sold their produce on the black market for higher prices; one such route (seen to operate at the market at Diss in Norfolk) was to sell live poultry to members of the public, and each purchaser would sign a form promising that he was buying the birds to breed from, and then take them home for eating.

During the Vietnam war, American soldiers would spend Military Payment Certificates on maid service and sexual entertainment.citation needed Also if a Vietnamese civilian wanted something that was hard to get, he would buy it at double the price from one of the soldiers, who had a monthly ration card and thus had access to the military stores.citation needed The transactions ran through the on-base maids to the local populace. Although these activities were illegal, only flagrant or large-scale black-marketeers were prosecuted by the military.citation needed

Laws and regulationsedit

A classic example of new regulation creating a black market is the prohibition of alcohol. Similarly, when the law disappears, so does the black market. Which is why one of the arguments for marijuana legalization is the elimination of the black market and thus taxes from that economy being used by the government.

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