Book Review: Ragnar's Guide to the Underground Economy

By Philip Brewer on 7 August 2007 (Updated 3 December 2008) 3 comments

Ragnar's Guide to the Underground Economy by Ragnar Benson.

This book is exactly what the title says: A guide to living in the underground economy.

The basic calculation that Benson does is this: An income of about $50,000 a year lets you live a comfortable middle-class life. However, earning $50,000 a year takes quite a bit of work. Suppose, instead, you earned about $30,000 a year, and then didn't pay taxes? Depending on where you live, the net income works out to be about the same. As Benson puts it, "Personally, I have always found it much easier to earn 30 grand than 50!"

The book begins with the basics of operating in the underground economy: You work for cash, you avoid having a bank account, you leave no paper trail. (There's also a comparison with less-drastic tax cheats who, for example, pocket cash payments while paying taxes as usual on payments by check or credit card.) There's a discussion of the practical aspects of running a business that can't be accredited or bonded, and has to be very careful about advertising or otherwise drawing attention to itself.

The bulk of the book, though, is a series of case studies of specific people working in the underground economy. There's a section about a man who cuts up and delivers firewood. Another finds fossils and sells them to schools and scientific supply companies. Another gathers pine cones for sale to tree nurseries. There's a chapter on service work like house cleaning and pet care. There's a chapter on skilled work like carpentry, gunsmithing, or chimney sweeping. The book wraps up with a look at some of the downsides of the underground economy, such as the difficulty in getting medical insurance and not qualifying for social security or medicare.

One point that Benson makes very clear is that work in the underground economy is still work. If you don't pay your taxes you can live at a higher standard of living, or do less work, but you still need to work. He's a bit less clear about the issue of being caught cheating on taxes.

Ragnar Benson has written a lot of other books on similar topics: acquring fake ID, survival poaching, homemade weapons. I get the sense that he's going after both the market of people seriously interested in committing crimes and people with only a vicarious interest. I can't really recommend the books to incipient criminals, both because I don't want to assist criminals, and because I don't think the books lay out the risks clearly enough. For those with only an academic interest in the topic, though, this book and his others can be entertaining and even informative.

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KaT

I know his work. Interesting books, but most of it I was aware of previously. But I like knowing how to beat a system I'm comfortable complying with. It's that handy, comfy little back-up plan that will never (one hopes rather fervently) come into play.

Philip Brewer's picture

At least, that's how I hope most people read Ragnar Benson's work.

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Guest

If I could make 50K, or even 30K, I would be very glad and would be happy to pay the darn taxes on it. Lots of us never see that kind of income.