In discussions on The Bob Zadek Show, the black market is treated as an economic inevitability rather than an aberration: when government bans a good, fixes a price or criminalizes a voluntary exchange, the market does not vanish but moves underground. The topic surfaces across episodes on light-bulb regulation, North Korean markets, kidney sales, public choice and sex work, with Bob Zadek supplying the general theory and guests supplying the concrete cases.
Prohibition and the price mechanism
Bob Zadek’s clearest statement of the theory comes in the 2019 episode with Mike Munger, a professor of political science, economics, and public policy at Duke University. Zadek argues that in Venezuela and in any centrally planned economy, a black market springs up, and that a black market is nothing other than a capitalist system within a planned economy; because it always springs up underground, a market cannot be legislated away — it can be made illegal, but it does not go away, it goes underground Mike Munger is Taking Public Choice Seriously (2019). He compares this to prohibition of alcohol and marijuana, and roots his optimism about markets in the fact that they inevitably spring up and grow even when suppressed by a government system.
Munger agrees about markets but distinguishes them from capitalism, which he calls a subset of the system and which requires open private ownership and liquid capital — the ability to sell shares of equity in the future prosperity of a company. Buying eggs in the black market, he says, is not the same thing: capitalism requires an actual legal system that defines the ownership and exchange of equity shares in corporations, and he does not think that is inevitable. He cites Venezuela’s reversion from developed to developing nation and Argentina’s substitution of central planning and price controls for a functioning market, and notes China’s market turn, with its poverty rate falling from 70% to less than 10% Mike Munger is Taking Public Choice Seriously (2019).
Earlier in the same episode, Zadek locates the origin of cronyism in government action: the distortion starts with the money being available, which is a governmental act, and if the subsidy were not available the series of unhappy events resulting in a corporate takeover would never occur Mike Munger is Taking Public Choice Seriously (2019).
North Korea’s Jangmadang
The 2014 episode with Yeonmi Park, a North Korean defector, gives the black market a generational dimension. Park tells Zadek that North Korea is a socialist country where there should not be any market or trading, but that during the 90s, after economic difficulties, the government could not give people food, stopped the public distribution system and allowed people to survive by themselves. Trading began as a very small thing — a few traders — and grew bigger and bigger, until in 2002 the North Korean government legalized what is called Jangmadang in Korean, which she says is called the black market Yeonmi Park – North Korean Defector: “Juche” Die, Markets Rise (2014).
Park describes the black market generation as people born in the late 80s and 90s who grew up with that market system and experienced the market. She also tells Zadek she had never heard the word economics before leaving North Korea, and that she is now studying the subject, including Bastiat, while attending university in South Korea Yeonmi Park – North Korean Defector: “Juche” Die, Markets Rise (2014).
Organ sales and the international kidney trade
The 2014 episode with Sigrid Fry-Revere concerns the National Organ Transplant Act of 1984, which banned organ sales in the United States, and the Iranian model of compensated kidney donation as a possible answer to the organ shortage; the episode description frames the discussion around the ethical distinction between a black market and a regulated system of compensation A Vital Issue: Sigrid Fry-Revere on Iranian Kidney Markets (2014).
Virginia Postrel, in a December 2014 episode, describes the black market that results from that law. She says it is not the case that no poor person in a third-world country ever sells a kidney to a rich American; rather the transaction goes through a broker, takes place overseas, involves complications, and the broker makes most of the money while the person giving the kidney makes a pittance. She calls it not a huge black market but a significant one internationally, with the part involving Americans being the smaller part, and says that as is always the case with a black market, the people getting rich off it are unsavory characters Virginia Postrel on Stasis vs. Dynamism (2014).
Postrel also argues that the legislators who passed the original statute were picturing a transaction in which the donor was not well-informed, and that once one has been inside the transplant system and seen the care and coordination required, the idea that somebody would not be well-informed about their risks is not credible. Zadek calls the statute indefensible on moral, ethical and philosophical libertarian grounds, and compares the language of bodily autonomy to the pre-Roe v. Wade abortion debate; Postrel notes that Americans may sell eggs, which do not regenerate and whose sale involves hormones and risks, and asks why that is the only organ that matters Virginia Postrel on Stasis vs. Dynamism (2014).
Incandescent bulbs and the nanny state
In a 2010 episode, Zadek discusses the criminalization of incandescent light bulbs under the Energy Independence and Security Act of 2007, telling guest Doug Bandow that starting in 2012 the bulbs cannot be bought though they can still be used. He jokes that in 2011 he will rent a locker, load it with incandescent bulbs and sell them on the black market, cash only, no receipts, because there will be a market for them The Age of Unenlightment (2010).
Zadek frames this as the Nanny State reaching the most routine thing in the world, and predicts that the American expression about changing a light bulb will be gone forever, replaced by the idea that it is as difficult as changing a light bulb. The episode’s caller, Rich from San Francisco, is dropped mid-call and the excerpt ends there The Age of Unenlightment (2010).
Sex work: decriminalization versus legalization
In the 2022 episode with Cathy Reisenwitz, the black market appears as an argument within the decriminalization debate. Reisenwitz distinguishes legalization from decriminalization: sex workers by and large support decriminalization, she says, because legalization is generally highly regulated in who gets a license and forces workers into brothels, of which there are not very many to choose from, making the arrangement more exploitative. She calls much of the regulation on brothels corporatist and aimed at keeping incumbents out rather than at health and safety, and says one of the worst parts of legalization is that it leaves open a black market: someone who wants to do sex work but does not want to work for a brothel still faces all the harms of criminalization, and a large black market makes it more difficult to find and rescue human trafficking victims The War on Sex (2022).
Reisenwitz says that in every place that has tried decriminalizing sex work, to her knowledge, rates of violence against sex workers and against clients, rates of STIs and rates of human trafficking have gone down, and working environments are less exploitative. She names New Zealand as one such country, and says she cannot remember the other two off the top of her head. On the United States, she says full-service in-person sex work is generally regulated at the city level, that the laws do not vary much but prosecutions do, and that prosecutors have wide discretion; she cites San Francisco’s last prosecutor going on record against prosecuting adult consensual sex work offenses, and argues that police working with sex workers rather than against them is one of the best ways to find true trafficking victims The War on Sex (2022).
Zadek places this in a broader trend, noting that states have rebelled against Washington on drug decriminalization in what he calls a victory for federalism, and asks whether a similar trend exists for sex work. Reisenwitz answers that in 2020, for the first time, a majority of United States voters said they favored decriminalizing sex work, and cites proposed legislation in multiple cities, Scott Wiener’s proposal in California, a decrim measure she believes Portland had, and a statute proposed in Michigan, along with an organization called Decriminalize Sex Work The War on Sex (2022).
Across episodes
The topic recurs from 2010 to 2022 without a single settled argument. The 2010 episode treats the black market comically, as Zadek’s own hypothetical bulb-hoarding scheme; the 2014 North Korea episode treats it as a survival institution that became the Jangmadang; the 2014 kidney episodes treat it as the predictable consequence of the National Organ Transplant Act of 1984, with Postrel supplying the broker-and-overseas mechanism; the 2019 Munger episode supplies the general claim that a black market is a capitalist system within a planned economy; and the 2022 sex-work episode treats the black market as a reason to prefer decriminalization over legalization. The later treatments are more analytical and less jokey than the earliest, and the 2022 episode is the only one that argues from a black market’s persistence to a specific policy preference — decriminalization over legalization — rather than to a general claim about markets.
What the sources do not cover
The excerpts do not give figures for the size of any black market, nor do they name the other two countries Reisenwitz believes have decriminalized sex work. The kidney excerpts do not state what the Iranian model pays donors or how it is administered, and the North Korea excerpt breaks off before Park finishes her account of the first generation since the Kim dynasty began. The light-bulb excerpt ends with a dropped call, and the Munger excerpt ends mid-sentence in a new section.