The Informal Economy: A Veblenian Perspective

Past studies on the informal economy have formed three viewpoints: dualism, structuralism, and legalism. However, these frameworks cannot capture the whole complexity of informal economy, and relevant policy practices have not substantially improved the vital interests of informal groups due to the failure to explain how the “formal economy” came to be. The formal economy might be considered as a discourse practice of mainstream economics and its mapping in economic reality, which excludes the diversified forms of human daily economic life that it cannot understand and control, thus producing the so-called “informal economy.” The article relies on the four-category division in Thorstein Veblen’s theories of business enterprise and leisure class to reveal a classification different from the above three methods. Moreover, it introduces Pierre Bourdieu’s theory of symbolic capital to jointly explain the differences between formal and informal economy from the two dimensions of economic capital and symbolic capital.