Alfonso Morales's blog

Street vendors may be on the lowest rung of capitalism, but they are still on the ladder. Downtown business groups and local governments might see vendors and markets as a problem to be regulated, restricted or eliminated from the streets, but they simply attacking their kin.

Some vendors, those with the lowest overhead display merchandise in briefcases or portfolios, they spread blankets, use a hydrant or a trash can as a place to mark their space, but they are mobile and move to where they find the customer. Food vendors are also often employees. These nascent entrepreneurs take a basket of burritos, fruit, a cooler of drinks and provide fellow employees and passers-by with a bite to eat, either within the workplace but more likely from close by during a break in the day. Perhaps an empty lot has become a magnet for pushcarts or more elaborate displays. Merchants create their own infrastructure, protecting themselves and clients from the elements and allowing them to do business and people to shop.

What sells homes? What do the denizens of cities enjoy? Street Markets. Street markets are amenities that buoy the value of places, homes, neighborhoods and cities. Public entities make places more livable, make homes more attractive and make streets friendlier by creating street markets, or permitting those created privately to exist.

Think Los Angeles and you think cruising in your car down Sunset Boulevard. But even in LA people wish for walkable neighborhoods. A recent NYTimes article describes "A scruffy stretch [of street} known as Sunset Junction, bordering Silverlake" that has become "an appealing mix of low-key restaurants and eclectic shops that draw(s)...creative types with long mornings and limited incomes." This is just the "creative class" that contemporary cities need to attract "clean" industry and higher paying jobs. What attracts this type of citizen? The street market, is one of a variety of amenities that makes that "scruffy" street attractive. The farmers’ market that sets up every Saturday from 8 a.m. to noon (Sunset Boulevard between Edgecliffe Drive and Griffith Park Boulevard) provides food to the ethnic restaurants, interaction between neighbors and the opportunity for the people watching that is at the core of creative activities.

Observers frequently assume markets are sources of illegality, particularly in taxation or merchandise acquisition.  Clearly some merchants in some places do break some laws, but so weak a contention can be leveled at storefront business, government officials and manufacturers, all of whom digress from law, ordinance and commonly accepted behavior and such digressions help make possible merchants digressions from law, ordinance or commonly accepted behavior.  Yet turn this notion upside down.  Since their inception laws have been made for markets, not the other way around.  Markets and merchants have been exceptions to laws, just as corporations and the rich avoid many laws today.  But, unlike the rich, merchants often seek reasons to maximize their tax liability in order to get access to credit markets from which the marginalized are excluded.  Thus, with respect to some “illegal” behavior, we find merchants and markets would provide richer social benefits if, as historically, they were regulated distinctly from the rest of society, and eventually incorporated into that society.   

Take taxation, do merchants evade taxes, do they minimize tax liability?  Yes, as do businesses and households.  Some people use evasion to make a political, social or economic point, for instance they withhold taxes because they believe a war or wars generally are unjust, or they evade taxes because they perceive inequality in education and send their children to private schools or they believe it unjust that large corporations are given tax breaks and feel their business deserves similar treatment.  But when do most businesses or corporations seek to increase their tax liability?  What rationality is in that?  But it is precisely the case with street merchants who purposefully increase their liability when they wish to supplement their street business with storefront business or when they hope to move from street to store.  Access to credit markets demands proof of profitability!  Absent the political connections or track record of profits, vendors have no choice but to demonstrate their ability to pay taxes, they do so by paying more than liable, and establishing without question, their creditworthiness and by proxy, ability to run a business.   

Thus, we find that one’s perspective is particularly salient with respect to criminality.  This charge of fostering illegal behavior is perhaps the most severe charge against markets and merchants, but it comes from shoehorning them into assumptions of storefront or contemporary retail practices, practices for which merchants are unsuited, but are often attempting to access.  Instead of condemning markets and vendors some allowance should be made for their unique activities contributing to economic and social and other goals.  In this sense markets should leverage aspirations for mobility and become a policy tool to encourage entrepreneurship, merchants should not languish in an economic purgatory, but instead occupy a transitional space where their activities contribute to their household and neighborhood and can eventually produce conventional businesses.

Occasionally academics, business people, planners and policy makers assume Markets are unorganized and disorderly.  These assumptions are rooted in prevailing theories of human behavior, for instance if business is organized then street business is not; or in ideas of what legitimate business is, for instance the only activity which counts as business is that activity which is taught in business schools and involves a variety of other practices (accounting, etc); or in ideas of planning and policy wherein the largest economic activities, the most remunerative, easily measured, and regulated are those most desirable.   But these assumptions are fatally flawed and measure human activity by rules and regulations instead of establishing desirable rules by human needs and aspirations.  

The fatal flaw in these assumptions is the “truth” of the logic of if/then statement.  If storefront business is orderly, organized, recognized by other social institutions like business schools; sought and even de-regulated by planners and policy makers then street markets, absent from these connections and assumptions must not be organized.  But of course street business is organized and of course, like all human activities, it is regulated, and the truth of this is obvious when we consider the vast variety of family forms that exist.  Families are not unorganized, rather we might say, that like street markets, families are disorganized!  There are numerous family forms and even more numerous ways by which families organize their lives and though we may not recognize the form or organization from our perspective the fact that some form/organization exists is testament to the existence of that form/organization.  

So street markets are organized, but recognizing that organization requires two moves, first, a willingness to suspend one’s assumptions about “legitimate” organization and second, the desire to understand the principles organizing some market in some particular place.  Chaos it may seem, but there is always some order(s) producing the activity we observe. In brief, markets are often, and purposefully, unorganized, with several organizing principles operating at the same time.  Planners, policy makers, business people and academics would do well to understand these organizational principles, synthesize how they come together and work, and recognize that for more than a millennium markets have operated in uniquely distinct ways from other commercial and social activity, and for good reasons.  More about that in a later note.

News sections of newspapers around the world decry street markets as sources of corruption, but in the metro, travel or food sections, those same markets are celebrated as sources of sociability, economic mobility, and local character, yet markets, forerunners of the contemporary complex system of trade and commerce are notably absent from the business pages. Markets and merchants are intimately woven into human history, human history is, in no small degree, a history of markets. Important elements of law, politics and family life emerged from markets, and religion spread by trading relationships. Markets are simultaneously abstract and concrete, flexible and stable and into markets policy makers have poured their expectations, scholars their expectations, politicians their praise and criticism, immigrants their hopes for better lives and markets are constantly being remade in light of new opportunities and demands for new trading relationships.

The history of markets and merchants permeates most every scholarly discipline, the humanities are represented, no less than social science in examining lives conditioned by markets in one way or another. Still, policy makers and politicians hold biased views of one type of market, the original type of market, the street market. These perceptions are biased by the last century’s revolution of storefront retail, regulation and currently, commerce globalized by internet technologies. Yet the street market persists, in the industrialized west no less than other parts of the world. More than persisting, the street or open-air market is further catalyzed by changes in storefront retail, in regulations and in changes in consumer demand and government needs. Markets and merchants are here to stay.

This article enumerates ten myths associated with markets which shape policy and economic perceptions of markets and merchants. The stereotypes are common, but not always explicitly articulated, rather they settle in to pronouncements as assumptions that underlie convictions or decisions about “suitable” economic activity.

The ten myths are:

1. Markets are disorganized and disorderly

2. Markets are sources of illegality, particularly in taxation or merchandise acquisition

3. Markets and merchants are dirty or unsanitary

4. Markets are dangerous and merchants defraud customers

5. Markets are dead-end activities and merchants live hand to mouth

6. Markets are inefficient and merchants are not “real” business people
7. Markets are unimportant, disconnected from the larger socio-economic situation
8. Merchants are without ambitions
9. Markets are for the poor and merchants are typically the poor or destitute
10. Markets are biased by race or class

Like all myths each of these has some basis in reality and the reality will always be a mixed bag of positive and negative perceptions. What matters most is how particular interest groups and organizations harness negative perceptions and use them to command the attention of policy makers. In the weeks ahead I will pursue a fundamentally constructive purpose: I will disentangle these myths in order to show how merchants and policy makers are recovering markets as important tools of city planners and public policy makers as well as helping households realize their economic aspirations.