CHRONICLING THE INSIDIOUS SPREAD OF A SHADOW ECONOMY

Between The Lines With Eric Schlosser

Eric Schlosser's previous book, ''Fast Food Nation,'' looked at the
innards of the meat industry and found exploitation of workers and a
distressing view of the food that ends up on our table. With ''Reefer
Madness,'' subtitled ''Sex, Drugs, and Cheap Labor in the American
Black Market,'' he explores the emergence of an underground economy
that he says may account for as much as 10 percent of the gross
domestic product.

Where is this black market? Schlosser found it thriving in marijuana
and pornography production and sales, as well as in the money changing
hands when California strawberry growers pay their considerable
workforce of illegal immigrants off the books.

Schlosser, a correspondent for the Atlantic Monthly who lives in New
York, says that the growth of these industries reflects on mainstream
society in ways that are disturbing and ominous.

Q. Which aspect of the underground economy was the hardest to research
and report?

A. Probably the illegal-worker part. Not because it was dangerous or
difficult to get people to talk. Once people found out I wasn't a
government agent, they were eager to talk. It's difficult to confront
firsthand this reality in America. I spent a day at the border, and at
the homes of the workers. It was connected to the kind of reporting I
did for ''Fast Food Nation'' with meatpacking workers. People are
treated so terribly.

Q. You included strawberry pickers, not because the product is
illegal, but because of the way they are paid?

A. Yes, and because they are illegal [immigrants]. Pornography and
marijuana are linked in that the government intervenes on moral
grounds. With migrants, the government refuses to intervene. One of
the themes of the book .. is the ways in which the free market has
been ruthlessly applied. Republicans are all in favor of a free
market, but when it comes to a cancer patient smoking a joint, the
government has a different view. ... This is nothing that Adam Smith
imagined.

Q. You write that - at $70,000 a bushel - marijuana may be the largest
cash crop in America.

A. No one really knows how much money is involved. It is not
necessarily what the dollar value is. The IRS estimate from 1998 is a
trillion and a half. They estimate that $200 billion in federal income
tax [is lost], and that does not include criminal activity. Economists
don't know how big it is, but they agree it's been growing since the
early 1970s.

Q. Why should we care?

A. It means something is wrong. What people want to do isn't tolerated
by the law, and that's alienated the government from society. [The
amount of money in the black market] is huge, at a time when state
governments are terribly in the red.

Q. What do your critics say?

A. The criticism has more to do with my policy recommendations, say,
how to handle illegal immigration. In terms of the scale of the black
market, it's pretty straightforward. People on the left and right will
argue why it is so big. The left will say that falling wages, for
example, force people to work off the books. The right will say our
taxes are too high, so people turn to the black market.

Q. Why is it important for us to acknowledge the underground economy
when the legitimate economy is not doing well?

A. It's an unhealthy thing for a Western industrialized country like
ourselves to have an underground economy, especially an underground
that is growing. You want to have people paying their taxes and
obeying the government. It shows a lack of respect for society. When
you look at countries that have huge underground economies, they tend
to be... Third World countries. ...

In the US, we've moved beyond child labor, beyond workers being at the
[mercy] of their employers, the struggle for the 40-hour workweek.
These were major things. If you look at what is happening with day
laborers gathering on street corners, this is a return to the 19th
century.

Q. How does this affect us on a day-to-day basis?

A. Most people try to do their best to pay their taxes. They really
do. If you try to pay your taxes honestly and fairly, you are paying
for those who cheat. It creates a society that rewards cheating....
When it comes to the rise in immigration and low wages for
black-market workers, it affects all workers. Meatpackers used to be
well paid like auto workers. Now they are badly paid. ...

It really won't cost America a fortune. People are asking for a nickel
a pint more for strawberries ... an extra penny a pound for tomatoes.
This is not going to take a radical social revolution. If you were to
double the wages of all the farm workers in the US, it would cost a
typical American household maybe $50 a year, the price of a couple of
CDs.