Why are people so willing to be participants in the Underground Economy?

Answer 1

The "underground economy" is attractive to people for different reasons. It depends mainly on their socioeconomic circumstances. There's also geography to consider.

If a poor person living in a country that, through a series of unfortunate events in its history, has been left with less than 10% of the population owning 90% of the recourses, then this person would most likely seek alternative modes to acquire more recourses. The main economy, not having worked in this person's favor, leads her to seek alternatives; what you refer to as the "underground economy".

Although this "underground economy" is traditionally characterized as the "bad" alternative, being composed of business dealings which one, who might be a little strict about the notions of right and wrong, would say includes sex, drugs and rock and roll, it also serves benevolent purposes. In a situation where a certain drug is illegal but necessary to save lives, then this underground market serves a good purpose.

Basically there are a lot of reasons. The main economic and political system is not perfect. It's a natural phenomenon

Answer 2

They are greedy individuals, driven by the need to feel that they have one over the IRS. What drives the Underground Economy is avoiding taxes. And or dealing in illegal trafficking of products such as guns, drugs, money laundering, prostitution, slavery, stolen jewelry, stolen arts and whatever can turn a buck all the while avoiding the IRS.
Either way, they are robbing the system because the
multi-billion dollar Underground Economy does not pay its fair share of tax dollars, while enjoying many of the benefits of the tax paying community. Aka, legal protection.

Answer 3

They weigh the costs and benefits of operating in the underground economy. In many cases (bootleg movies, etc.) its pretty low risk and the reward (cheap, early access) is pretty good. If the person thinks the cost is greater than the benefit, then they would not be involved. I guess we are willing to take some risks.

Answer 4

The ABOVEground economy is essentially nothing more than legitimatized plundering. What's the big difference between a Savings and Loan and a loan shark, I mean, other than one is capitalized and the other isn't? Which is the bigger criminal, truly, a pharmaceutical company charging $28 for a life-saving pill that costs three cents to make even after all overhead R&D, or a guy growing pot in his closet?
http://www.bopsecrets.org/CF/darrow.htm

Answer 5

Because it's often the only way to survive.
Because many people believe that the government takes way too much of a worker's income as it is, spends it foolishly and squanders the rest of it.
Because our entire tax system is designed to encourage people to cheat.