A Marxist Critique of Informality and the Informal Economy Paradigm: Irregular Labor and New Peripheral Capitalism

• In Event: 50858 - Contributions to Marxist Sociology

Abstract

This article presents a Marxist critique of the concept of informality and the broader Informal Economy Paradigm (IEP), a framework central to understandings of irregular labor under global capitalism since the 1970s. The study highlights the IEP’s conceptual and ideological limitations in addressing the proliferation of highly exploitative and precarious work, particularly in the Global South.
The IEP encompasses international governance institutions, NGOs, and elite scholars that conceptualize informality within a liberal capitalist framework, offering neoliberal policies such as labor market deregulation, tax reduction, and entrepreneurial empowerment. While some of the goals proffered within the IEP—like decent work and formalization—appear progressive, these goals are ultimately secondary to the needs of capital and necessarily align with elite interests.
This work traces the IEP’s emergence within the ILO’s efforts to address labor precarity while containing socialist movements in the mid-20th century up to its contemporary efforts to de-class the world’s poorest workers and its oversight of the “entrepreneurial shift” in global employment policy and theory. The article proposes two novel concepts to counter the failings of the IEP: the "Irregular Army of Labor," which extends Marx's concept of the Reserve Army of Labor, and "New Peripheral Capitalism," which reinterprets dependency theory to reflect contemporary global inequalities. Ultimately this work advocates for a more critical engagement with the global labor dynamics of 21st-century capitalism.

Author

• Joshua Lew McDermott, Southeastern Louisiana University