ECONOMY, ANTI-ECONOMY, UNDERGROUND ECONOMY: CONCEPTUAL AND TERMINOLOGICAL PROBLEMS

This paper discusses conceptual and terminological problems stemming from the lack of discipline in the field of exploration of the economic phenomena reflecting the unregulated practices, practices of non compliance with the official order and cases of production of economic bads and loss of existing wealth. The resulting conceptual and terminological proposals are aimed at improving the structurization, for malization of economic knowledge and thereby quality of communication inside the economic profes sion as well as between economists and general public. The research is based on the principles (assump tions) of the holistic paradigm.


Introduction
One of the main weaknesses of economic science, alongside its ideologisation, is its conceptual and terminological insufficiency expressed in underestimation of the complexity of the procedures of creating new and improving existing concepts, procedures of naming newly born concepts. In many cases economic concepts are used as self-evident, requiring no definition. In other cases when definitions are given, this is done from the position of common sense, casual knowledge rather than of careful use of the methods of abstraction (idealization) and classification. The result of such casual cognitive endeavour is usually imprecise, vague concepts. This leads to, sometimes substantial, losses in the process of creating economic knowledge. To add the problems emerging from the giddy naming, 'baptizing' of the concepts, and we will have two main explanations of those conceptual and terminological quandaries faced by our science and hindering scientific progress in our profession. And all this takes place in the climate of the lack of proper awareness of the existing difficulties.
The main purpose of this paper is to contribute to the lessening of definitional and terminological fuzziness continuously emerging from implicit, casual understanding of the basic economic concepts like economy, informal economy, shadow economy, grey and black economy, etc.
A stricter, less ambiguous understanding of these and other economic concepts explored in this paper would mean, among other gains, higher quality of structurization, formalization of economic knowledge, a more precise picture of economic reality, less misunderstandings and better communication among economists and between our profession and larger public. All in all, it would lead to better conditions for accumulation of improved economic knowledge and better perspectives for economic progress.
In the knowledge economy, knowledge about economy becomes, as probably never before, an essential prerequisite for the growth of wealth.
Our explorations are carried out in the framework of methodological holism, which, in our view, allows avoiding the theoretical traps and inconsistencies that are characteristic of the mainstream economic thinking based on the premises of methodological individualism. I

Economy
Economy is the basic notion of economic thinking. Being an abstraction, it reflects one of the aspects of social reality. This aspect is connected with the flow, movement of wealth. In other words, economy is a society investigated in terms of creation, exchange, distribution and consumption of wealth.
From this description it follows that the key role in understanding economy belongs to the definition of wealth differently seen from holistic and individualistic perspectives. Methodological individualism, being based on the premise that the only economic reality is the individual (homo oecollomicus) with his self-interest and being suspicious of efforts to include into the sphere of economic reality the other -collective, I For a more comprehensive analysis of methodological individualism and methodological holism. see another publication (Gylys. 2004).
28 communal -actors with their relatively autonomous needs, tends to identify wealth with private goods, commodities. This follows from the very logic of individualistic thinking: private individual driven by private individual needs (and goals) produces, exchanges and consumes private goods_ Market as the most effective regime of production of private goods is logically identified with economy. If economy is, as we just defined, an aspect of the society which reflects the flow, movement of wealth and if wealth is a sum of private goods produced in the market conditions (in the framework of market regime), then, naturally, market and economy are two different terms used to name the same phenomenoneconomy. Such a way of theorising leads to some, in our view, basic, fundamental inconsistencies.
First and foremost, these inconsistencies are connected with the concept of public goods, with the role of state, of communities, non-governmental structures at large. Discussed already by A. Smith, 'baptized' by P. Samuelson in 1954, public goods don't find a proper place in the individualistic paradigm. Public goods don't suit individualistic logic, because they are connected with common needs, needs of groups, with collectivistic regimes, with non-rival, noncompetitive behaviour of people.
That explains why proponents of individualistic approach are inclined to ignore altogether or to marginalize the notion of public goods. Often the diversity of these goods is reduced to several items -national security, lighthouse and some others. In other cases public goods are treated as free, non-economic goods, what is a major conceptual mistake explained at a greater length just a bit below.
The holistic paradigm provides an opportunity to reconcile those economists who believe in market efficiency in producing private goods, commodities and those who believe that eco-nomy encompasses not only market, but public sphere as well. The public sector is the place where public goods are produced. The latter are economic and not free goods, because they are produced using limited, scarce resources. As we know, economic aspect of social reality exists for this sole reason -the scarcity of resources. In conditions of unlimitedness of resources, economic calculus, economising behaviour looses its sense.
The confusion of public goods with free goods follows from the impression that public goods are not payable, that an individual doesn't pay for them to cover the costs of their production. But though an individual can use public goods, such as roads, without directly paying for them, they are not costless, free goods like the sunshine. They are covered, paid from the common, public purse, which is constantly filled by collecting taxes. Therefore it would be absolutely correct to say that there is not only no free lunch, but no free national security, no free education, no free legal system either. We have to pay for them as citizens and tax payers. The difference in this respect between private and public goods is that the former are paid for directly by the user of the goods and the latter indirectly through the regimes of pooling money (or other resources) used for common purposes.
The holistic way of thinking in this sense allows avoiding discrepancies characteristic of the individualistic paradigm for which state budget is alien to market and thereby to economy. Budget is the instrument of satisfying common, societal needs, which is at best marginalized by proponents' individualistic paradigm In the holistic economic framework, budget takes its unchallenged, proper, legitimate place. It is part of the economy connected with creation, distribution and consumption of public goods.
Being limited by the scope and size of this paper, we would like to draw the Reader's attention to several other aspects of the holistic understanding of economy. Firstly, in the framework of holistic thinking there is the possibility to introduce the notion of the hierarchy of economic subjects, beginning with the individual and ending with state (or even global) institutions without confusing hierarchy with autocracy.
Secondly, in this cognitive framework there are wider, better possibilities for comprehensive, systematic investigations of human capital and its inclusion into the kit of economic research. And finally, to the holistic thinking elegantly fits the concept of social capital understood as a feature of collective entities reflecting their cohesion and produced at cost.
All this means that we can talk about an hierarchy of economic agents that take part in the creation, movement and consumption of not only private, but also public goods, human and social capital. All of them should act observing the requirements of the principle of economization -to seek their goals rationally, to use scarce resources thriftly.

Anti-economy
It is axiomatic for a mainstream economist to think in terms of rationality and to ignore, neglect expressions of irrationality in our life. The same applies to the concept of harm, which is traditionally treated as unpleasant exemptions rather than a phenomenon permeating all aspects of our economic life. We economists often instinctively and implicitly understand harm as synonymous to costs and thus make another fundamental conceptual confusion.
Irrationality and harm are neither rare nor negligible facts of economic reality. Therefore, abstraction, dissociation from them leads not only to cognitive, but also to practical losses. The behaviour of economic actors -be it an individual or the state -is a mixture of rational and irrational elements, though distinction between them is not an easy endeavour. These actors in some cases produce economic goods and in other cases economic bads. These bads bring harm to people communities, institutions and so on, reduce their viability and sometimes even threaten the very existence of these actors. Drugs, family and social violence, abuse of alcohol, terrorism, war, corruption are only part of the wide spectrum of vices that represent irrationality, harm, economic bads.
All we said above gives ground to presume that in parallel with the concept of economy one could use the notion of anti-economy2. Irrationality, harm, economic bads are the facts of life that do not fit to what we call economy. Economy is a sphere of reality where actors behave rationally and in the conditions of limited resources effectively produce economic goods. There is no place in this concept for economic imprudence, waste and harmful products of our activities. But the latter precisely fit what we have just named antieconomy. If we want to explore the negative side of our activities where limited resources 2 We are not informed about the existence of publications in which the concept of anti-economy is thoroughly discussed. A partial exception is probably the workings of John McMurtry. This scholar, without using the term 'anti-economy', in fact conceptualizes some very important negative aspects of economic systems calling them 'the death sequence of value'. These aspects fit what we named as anti-economy. In other words, he conceptualized the processes of production of economic bads and destruction of existing wealth, but did not use the terms suggested in this paper (McMurtry). On the other hand, there are publications in other fields of social science where the prefix 'anti' is used. Here we have in mind, for instance, the publication of George Konrad titled "Anti-politics: an essay" (Konrad,1984). 30 are used, then we have to use another procedure of abstraction. This time, as the criterion of abstraction the concept of anti-wealth should be used. It represents all sorts of economic bads; cases of damage and waste, uneconomic use of existing economic goods. In other words, antieconomy is the aspect of social reality which reflects the flow of economic bads and the uneconomic use of economic goods.
The latter aspect of anti-economy requires additional explanation. Traditionally and rightfully economic science assumes that a rational actor finds an optimal, best combination between input ant output or, to put it in other words, between the amount of costs and newly produced goods. As far as abstraction is usually an idealization as well, such idealised picture of economic activities shows the economic, rational behaviour in its ideal, perfect form. Similarly we deal with other economic concepts like, for instance, perfect competition, Pareto efficiency, etc. If they are not confused with reality -in reality such ideal cases are exceptionally rare, -they are effective cognitive instruments. Knowing the definition of an ideal economic action we have an opportunity to identify the deviations from such an ideal model and thus to ascribe them to what is called anti-economy.
Deviation (digression) from the ideal model of economic behaviour in the sense of a not fully effective use of existing resources implies waste of these resources, of existing wealth. If, for example, the capacity of the equipment is used by 70%, in this simplified case the 30% of unused, wasted capacity represents anti-economy. This loss is comparable with the loss inflicted by a worker who damages the equipment so that it loses 30% of its capacity.
In other cases deviation from optimality happens when all allotted resources are used up.
but the utility gained is less than optimal. Loss of the gain or utility also represents anti-economy. The lost amount of economic goods represents the harm but not the cost of production. GDP gap, i.e. a negative difference between the potential and the real GDp, could serve as an example of such a loss of gain on macroeconomic level. Opportunity costs in micro economy represent harm inflicted on a firm.
In the literature, rather widespread is the use ofthe terms 'black economy' and 'grey economy'.
Unfortunately, they are used without an explicit explanation of their contents. Implicitly one can hold that the term 'black economy' reflects the negative aspects of economy and that these aspects are more negative than those connected with the term 'grey economy'. A truly scientific exploration cannot be based on such a shaky conceptual foundation.
Having defined the concepts of economy and anti-economy we can settle this conceptual and terminological problem. Economy as its is, defined in its abstract, ideal state is 'white economy', Le. there are no negative, 'black' elements, aspects in it, 'black spots' on it. Ifwe extort, abstract from reality the rational economic behaviour of economic actors in its absolute, pure forms, if we assume that these actors achieve optimal results in terms of combination of costs and benefits (utility), then the result of this abstraction will be the purely ideal, absolutely 'white economy'.
On the other side of the extreme there would be black economy. This term reflects the totally negative side of human activities -deviations, digressions from economic optimality, Le. waste of existing wealth, of economic resources and appearance, production of bads. In a strict sense they shouldn't be called economic bads, because it would be an antinomy to call something economic when it is in fact anti-economic. Thus, black economy is another word for antieconomy.
The very reality practically never exists in its pure 'white' or 'black' forms. It is a combination of economy and anti-economy. Thereby we can talk of real economy as a kind of 'grey economy'.
In some cases it is almost white and in others almost totally black.
At the first glance these conceptual innovations look like heresy; to this we could respond citing the motto: "Every truth is always born as heresy and dies as dogma". A more substantial answer to the possible criticism is to show myriads of cases when the method of abstraction (idealization) is being employed. Any concept -not only of free market, market equilibrium, production possibility frontier, but even such simple notions as 'a student' or 'a scientist' -is the result of mental operation based on abstracting from reality, from certain features of the objects and subjects of this reality and creating, defining a concept which is a purified, idealised cognitive reflection of a certain aspect of reality, of a certain group of features of an individual, etc. A pure, ideal scientist can exist only in our mind, in theoretical constructions. The same applies to economy, or anti-economy. A real human being is a mixture of a broad variety of features, characteristics. The real social life is a mixture of economy and anti-economy, 'white' and 'black' economy and of many other properties, attributes. Some of them will be discussedbelow.

Formal and underground economy3
In the former parts of the article our attention was concentrated on what economy is in its ideal ) Our first efforts to conceptualize the underground, shadow side of the economy come back to the last years of the Soviet system (Gylys, 1998 form and how to conceptualise those facts of social life which do not square to it, deviate from this ideal and represent the negative side of economic reality. Now let us turn to another aspect of our analysis. We are going to investigate official and unofficial sides of economic activities.
Although it is a relatively young branch of economic explorations, a vast literature devoted to this issue has accumulated. Therefore it might seem that only a limited space exists for the conceptual improvement. Though limited, it does exist. Our chances to add something to the conceptual framework of the topic we tie, firstly, with the holistic approach vis a vis economy and, secondly, with the earlier introduced distinction between economy and anti-economy.
In the economic profession one can encounter a great variety of terms which, usually implicitly, are attributed to the negative aspects of economic reality. 'Underground economy', 'hidden economy', 'shadow economy', 'informal economy', 'parallel economy', 'unofficial economy', 'grey economy', 'black economy', 'illicit economy', 'unrecorded economy' are the terms widely used in the economic literature, unfortunately, in many cases without a proper explanation of the content attributed by these terms.
Such a terminological and conceptual disarray leads to huge cognitive losses -often we confuse discussion on terms, on the 'names' ofthe concept with discussion on the substance, on the contents of the concepts. The latter problem is more important than the procedure of 'baptising', 'christening' of a defined concept.
Conceptual and terminological strictness has a fundamentalint1uence on the accuracy of measuring the outcomes of economic activities taking place 32 outside official economy or representing a circumvention of official requirements. In this respect we agree with J. Thomas who is critical of "measurement without theory" [Thomas, 1999].
Having this in mind, we'll begin with the conceptualization of these, usually implicitly understood, aspects of economic life.
Let's begin by differentiating among five aspects of economic life. The first aspect reflects the officially reglamented (regulated) economy, the second deals with non-reglamented (nonregulated) economic processes, the third shows practices of non-compliance with official requirements, the fourth is related to recorded activities and the fifth to unrecorded activities.
It is worthwhile to stress that the first three aspects are connected with the officiality, formality, legality of economic processes, the last two dealing with the possibility to detect and to record (to measure) different economic characteristics. That means that in fact we have to talk about two different classifications of economic phenomena. The criterion of the first classification is relation of one or another element of economic life to officiality, formal requirements of legal authority, and the criterion of the second classification is visibility, overtness (and measurability) of an economic phenomenon.
By the first criteria of the former classification we can distinguish between the economic practices that comply with the official order, that deviate from this order and that are not officially regulated by legal authorities and are an expression of the free will of economic actors.
The official order requires to register our economic activities, to pay taxes, to abide by labour-capital relations regulating and other laws. But there are cases of non-compliance with official requirements: economic actors do not register their business, they avoid taxation, they break labour and other laws, and so on 4 • At the same time, people have a certain freedom in their activities, part of their economic life is not regulated by law or other official requirements. One of the least reglamented fields of our economic life is the household. Though even there exist some official regulations concerning relations between spouses, between parents and children, most of the decisions made in this domain are free.
After demonstrating the difference between the three aspects of economic reality connected with the criteria of formality, officiallity, we can talk about the existence of three different, distinct economic concepts. Having the definitions of these concepts, we have to solve the terminological problem -to give those three concepts the appropriate names.
In doing this, we have to bear in mind at least two things. First, we shouldn't be afraid of the situation when one concept has several names. In other words, nothing is wrong if the same phenomenon is reflected by several terms. The opposite case -when one term is used to denote two different things (phenomena)is much worse. Several names for one concept simply means that we have several synonyms, which are useful when we want to express ourselves more eloquently, elegantly. The main caveat here is the lack of terminological discipline when one confuses terms and misuses them. We will show below how this danger becomes a reality. 4 Our position in this respect is very close to that of E. Feige who says that the decision to attach one or another fact of economic life depends on "whether the activity adheres to the established, prevailing institutional rules of the game ... Adherence to the established rules constitutes participation in the formal economy ... Whereas non-compliance or circumvention of the established rules constitutes participation in informal economy" (Feige,1989).
Instances of the use of one term to denote ('baptise') two or more things are an obvious, blatant logical mistake -every 'child' must have its own separate nameS.
Another rule which should be observed in solving terminological issues is semantic connotation, the traditional sense connected to a given term. In other words, a term should not create misleading cognitive situations, should not distort the contents of the concept. Alas, in the field discussed in this paper there are instances of such discrepancy between the semantics carried by the term and the concept. Here we would like to stress that this threat doesn't exist when terms are semantically neutral, i.e. when they have no clear connotation.
Our emphasis on the terminological discipline is not incidental, because in a discourse devoted to the problems investigated in this article one has to detect the cognitive 'mist' created by the shortage of terminological order.
Let's try to 'baptise' the first concept which reflects officially endorsed economic practices. We can choose several terms to name this concept: 'official economy', 'formal economy', 'legal economy', 'licit economy'. Being the 'names' of the same thing, they are synonyms and are convenient to use avoiding too often the repetition of the same words in our everyday and scientific pariance. In this case there are no major conceptual and terminological misunderstandings.
The picture is different when we turn to the other two concepts, which reflect, first, deviations S Unfortunately, in the field under discussion there are instances of such terminological confusion. For example, both cases of non-compliance with formal order and unrecorded elements of economic reality are often given one name -informal economy, shadow economy, underground economy, etc. from official requirements and, second, unreglamented, unregulated economic actions. For the first group of economic phenomena we could, rather safely, use the terms 'illegal economy', 'illicit economy', 'underground' economy'. All of them carry a certain sense of illegitimacy, antilegitimacy, non-compliance with official order. The other terms such as 'informal economy', 'unofficial economy', 'shadow economy', 'hidden economy', 'parallel' economy' are more ambiguous. They could be used, and are used, to reflect both cases -instances of non-compliance and unregulated activities. The term 'informal' could be interpreted as non-formal, beyond formal, non-reglamented and as deviant from formal. The same interpretation applies to the terms 'unofficial', 'parallel' and to a lesser extent to 'shadow economy'. The latter carries a sense of illegitimacy6 .
These arguments show that the practical way out of the situation is a convention among the leaders of the field to accept one or another terminological option. Without it. most of polemics will be caused by differences in terminology rather than by the essence ofthe problem.
Our suggestion for this future terminological convention would be as follows: the terms of shadow, informal, parallel economy should be treated as synonyms to underground, illicit, illegal economy, which reflect the aspects of noncompliance with the formal requirements of the authorities. 6 M. Fleming and others define shadow economy as consisting of four components: criminal, irregular, household and informal (Fleming at aI., 2000). Such a description of shadow economy raises doubts for two major reasons. On the one hand, three of four (except household) components represent one or another form of different level of illegality. The household as such represents mostly unrecorded activities but not illegality or circumvention of official order. Therefore, to put in one classification the phenomena of different origin, in our view, means to violate the principles of classification.

34
The third group of the phenomena could be called unregulated economy represented by household, by non-governmental organizations, neighbourhood activities, etc.
The separate group of terms should represent the other two aspects of economic reality, namely, recorded and unrecorded elements of this reality.
Here we would like to stress that hidden, difficult to record facts exist not only in the underground economy, but also in unregulated e'conomy (household, neighbourhood assistance, activities of NGOs), and even in formal economy (especially in the public sector). For denoting the unrecorded elements of economy, the terms 'hidden economy', 'invisible economy', 'unreported economy' are semantically suitable 7.
It is worthwhile to emphasise here that the term underground economy makes sense only in the presence of the clearly expressed, defined official order. Without explicitly pronounced official norms, rules, procedures there is no much sense in talking about digression from the official order. When the formal order is vague, amorphous, one faces essential difficulties in finding out which elements of our life are belonging to the underground, illicit economy.
In times of wars, revolution, the formal order weakens or is almost completely destroyed. Without clear authority, without solid legal rules and strong legal and other institutions the process of demise of official order takes place. That means the disappearance of the clearcut criterion along which the identification of illicit, underground activities could be carried out. The dividing lines between legal and illegal activities blur out, the sanctions, punishment for alleged non-compliance become more arbitrary, etc.
Such a situation implies at least three major negative impacts on the economic life. Firstly, it disorganizes economic activities, evokes chaos, entropy in economic systems. Secondly, it means the devaluation of formal economic order which (provided it is optimal) is a public good. Thirdly, the negative activities that lead to destruction of existing wealth and to proliferation of production of economic bads become widespread. 8 The other caveat should be mentioned here as well. It is important to bear in mind that formal rules, norms, etc. may be to a bigger or lesser extent irrational., suboptimal In other words, one should avoid to identify the notions of official order and good order and hence formal economy and 'white' economy.
Moreover, researchers rightly state that one of the main reasons for the emergence of underground economy is the flaws in official regulations; the more imprudent formal requirements, the higher the motivation for economic actors to withdraw from official economy to underground economy (Fleming, 2000, p. 394).
Thus, one can quite safely conclude that elements of anti-economy might be found in official, in underground and in unregulated economy. But it would be dangerous, as is often the case, to identify, especially in the domain of common sense, underground economy with antieconomy or, using another term, with black economy. As we already have shown, the concepts of economy and anti-economy reflect an independent, different classification which shouldn't be confused with the classification, categorization along the criteria of formality, officiallity and represented in terms of official, underground and unregulated economics.
We can put both classifications in one figure from which one could see a close correlation between them: From the figure it follows that the elements of both 'white' and 'black' economy exist not only in the underground, illicit economy, but in official and unregulated economy as well, that the latter three sectors are actually grey. In some cases they are dark grey, in others -light grey.
Traditionally, all these terms are used in the context of an individualistic paradigm in which economy is perceived as practically identical to market. The public sector, public goods in this paradigm are understood as exogenous to economy. Thereby the problems of infonnal and other less visible aspects of the public sector are excluded from the explorations in the field altogether as non-economic and reduced to cases of corruption in that sector.
The holistic approach provides an opportunity to expand this traditional perception of economic reality, to enrich investigations in this field of economic science and to talk about formal, underground, unregulated and unrecorded aspects in such spheres of public life as education, health service, public administration, politics, etc. In the framework of holistic thinking, all these spheres belong to the economic reality.

Conclusions
The article deals with a relatively young branch of economic investigations, though the literature devoted to this topic is vast. Despite an increasing interest to the problems of underground eco-nomy, black economy, etc., there are substantial difficulties concerning the estimation of these phenomena and communication among the peers involved in the explorations in the field. One of the main hindrances on the way to scientific and practical success is the 'fuzziness' of the terms used by researchers. These terminological quandaries lead to a distorted picture of economic reality and result in major difficulties while measuring the parameters of economic life and, last but not least, of fruitless polemics among the specialists, their disagreements being rather of terminological than conceptual nature.
The purpose of this paper is to contribute to a more clearly structured, fonnalized perception of black, grey, underground economies.
We base our argumentation on the assumptions of methodological holism and do it explicitly. The result is different from the traditional description of economy which, in our understanding, encompasses not only the private sector, but also the sphere in which public goods, human and social capital are produced. Accordingly, the phenomena of black, grey, or underground economies could be attributed to all these spheres.
At the same time, stricter criteria are proposed for defining the concepts under discussion. The use of these explicit criteria allows to avoid mistakes in carrying out procedures of abstraction (idealization) and thus categorization (classification) of the concepts explored.