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CP290 Final Paper Ryan Devlin

CP290 Final Paper Ryan Devlin

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Published by: Street Vendor Project on Aug 21, 2009
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07/29/2010

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Ryan DevlinCP 290-Final Paper
 Introduction
From the beginning, street vending has been a common economic strategy fornewcomers to New York City, and from the beginning city administrators have beenfaced with the challenge of managing and regulating vending activity. The phenomenonof street vending presents a unique problem, especially in a city such as New York.Informal street vending serves an important purpose, especially in immigrantneighborhoods. From the itinerant Irish and African American peddlers of the Five
Points in the 1860’s, to the Jewish and Italian pushcart merchants
on the Lower East Side
in the 1920’s, to the Mexican
, Senegalese and Chinese vendors of today, vending hasserved as a source of employment for newcomers and an important source of low costgoods for immigrant consumers (Gaber 1993). As it has been for decades, informalvending is an important lubricant of commercial and social life in immigrantneighborhoods. On the other hand, many taxpaying, formal businesses see informalvendors as unfair competition. Real estate interests also tend to see informal streetvendors as a blight and a detriment to property values.From time to time, city administrators are pressured by these interest groups to
“do something”
about the street vending problem. A successful crackdown takes a largeamount of resources, and the political benefits are often limited. Nevertheless,crackdowns have occurred over the course of history. The objective of this paper is toexplore the economic, political and regulatory contexts of two vending crackdowns-
Fiorello LaGuardia’s war on the pushcarts during the 1930’s and Rudolph Giuliani’s
 
campaign against street vendors on 125th Street during the 1990’s, in order to understand
when, why and how crackdowns on street vending occur.
 Regulation and the Informal Economy
The informal economic sector is by definition created by the state. The statemakes the laws, and laws determine what is legal economic activity and what is illegal.Before discussing how regulations and the state shape, define and create the informal
sector, it will be useful to clarify what exactly is meant by the term “informal economy”.
In its broadest sense, the informal economy means any economic transaction thattakes place outside the regulatory apparatus. Saskia Sassen refines the definition a bit,stating that informal economic activity involves
“the production and sale of goods that
are licit, but produced and/or sold outside the regulatory apparatus covering zoning, tax,
health and safety, minimum wage laws, and other types of standards”
(Sassen 1988, 1).The distinction made here by Sassen between licit and illicit goods in animportant one for both analytical and theoretical purposes. The informal economy,according to this line of thought is not the same as what has been termed the
“underground” or criminal economy (Gaber 1993)
. The key distinction between theinformal and criminal economy lies with the good being produced or sold. Unlike theinformal economy, whose goods are licit, the criminal or underground economy involvesthe production and/or sale of goods that are themselves illegal.Although the line is important to draw, it can become blurry when discussinginformal vending. First let us look at a cut and dry example: both the production and saleof cocaine is illegal in New York. There is no way (that I am aware of) that a person canpurchase legally produced cocaine in the city. The good itself is illegal and illegal under
 
any circumstances. On the other hand pirated DVDs and bootleg purses, two itemscommonly sold by unlicensed vendors, can be more difficult to define. I place the sale of these items in the informal economy based on the following rationale. Purses and DVDsas a commodity can be bought and sold legally across the city. The goods themselves arelegal. What makes these goods illegal is the way they are produced, therefore, sale of 
these items fit Sassen’s definition of the informal economy.
1
Understanding how the state creates and regulates informality has been animportant concern of many scholars. The most influential work on this topic has beendone Patricia Fernandez Kelly and Anna Garcia. According to these authors there aretwo fundamental aspects of the state which play a role in creation of the informal sector.First
, the state is an autonomous actor. States “are not a passive reflections of socioeconomic and political processes”(Fernandez Kelly and Garcia 1989, 250). Rather 
they are able to enact policies in a relatively autonomous manner, paying close attentionto, but still largely independent of socioeconomic pressures.The second characteristic involves the structure of governmental authority in theUnited States. On the national and the local level, decision making power in the U.S. isfragmented among a number of semi-autonomous, sometimes competing jurisdictions
and agencies. This fragmentation “often leads to contradictory practices and policies”
(ibid, 250). These contradictory practices and policies in turn, open the door to informalactivity.
1
Note a contradiction here. Both bootleg DVDs and sweatshop produced clothing violate laws dealingwith production. In is interesting to note that in the case of bootleg DVDs, whose illegal productionmethods injure only corporations, the sale of these products is strictly forbidden. Neither licensed norunlicensed businesses can sell bootleg DVDs. However, in the case of clothing, whose illegal productionmethods violate labor laws and affect workers, the sale of these items is permitted. It is not illegal for aretailer to sell clothing produced in violation of labor laws. An interesting contradiction, but a topic foranother paper.

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