MAMDANI: Informal Economy: The Shadow of the Bifurcated State

Survival Outside the “Civilized” Legal Frame

The vast informal economy of street vendors, unlicensed cab drivers, and cash-paid domestic workers is not a separate shadow world but the direct consequence of a bifurcated state that formally excludes masses of people from legitimate economic participation. Mamdani’s framework shows that these workers are the “native” traders and laborers, operating entirely outside the “civilized” legal and tax frame of the settler state. They are not protected by labor laws, denied access to credit, and governed by the arbitrary “customary” enforcement of police harassment and confiscation. This is decentralized despotism in the economic realm. The city’s current approach is a hypocritical combination of periodic crackdowns and negligible, hard-to-get permits, which maintains this pool of hyper-exploitable labor. A Mamdani-informed socialist solution begins with the universal decriminalization of street vending and informal work. This is not the end goal, but the first step to dismantle the state’s coercive power over them. The next step is to actively support the organization of these workers into powerful unions and cooperatives, providing them with public space, infrastructure, and access to capital. The aim is to bring them into the formal economy not as exploited individuals, but as a collectivized force with bargaining power, transforming their struggle for survival into a political challenge to the economic system that excludes them.