Why you should care

Because the overground economy doesn’t have a monopoly on innovation. 

Alexa Clay could have fit in, easily: She went to an Ivy League school, studied at Oxford and found herself working at the Ashoka Foundation, bastion of global social good. But among the change-makers, Clay began to feel a certain fatigue, she’s said, and found herself wondering more and more about the entrepreneurs we tend not to talk about. Not the Jeff Bezoses and Mark Zuckerbergs of the world, but the Somali pirates, street hustlers and hackers.

Years later comes Clay’s new book, The Misfit Economy. Co-written with Kyra Maya Phillips, the book explores cutting-edge innovation in the underworld. While plenty of books have looked into the underground economy — and found lessons for law-abiding businessmen — few have as global the scope: from the French UX collective to camel-milk scions. These days, when Clay’s not researching the black and gray global economy, she lectures on the global circuit. She recently sat down with OZY to talk about innovation on the fringe. Our conversation has been edited for clarity.

OZY: What do you think of all these people doing all the various things they do to make money?

Alexa Clay: It’s amazing how much creativity is in the black market and informal economies of the world. Successful drug dealers have to be incredibly entrepreneurial: They have to build out their customer base, create and manage a brand, recruit talent. It’s really like any other type of business. Somali pirates, too, have to raise capital for expeditions and use cutting-edge communications to locate and track cargo ships. But not all the folks that I spoke to were motivated by money alone. For instance, I spoke to an Amish camel-milk trader who has always worked with exotic animals, and it was the weirdness of milking camels that attracted him. Likewise, many hackers aren’t in it for the money, but more because of a moral concern around privacy. Or they might have an anarchistic mission, or just be trying to make a reputation for themselves.

OZY: How do they compare to a Steve Jobs from Apple or a Bill Gates from Microsoft?

A.C.: Most of their “brands” are underground. Their success depends on their existing in the shadows, so you won’t really find case studies about their entrepreneurial ventures in Harvard Business Review or anything like that. I think Steve Jobs had a certain type of misfit quality or maverick DNA. He spoke openly about his experiences using LSD and definitely listened to the beat of his own drummer. Every entrepreneur’s path is different. The attempt with my book was to open people to different types of entrepreneurs where the path doesn’t begin with dropping out of Stanford and end with an IPO. There are so many types of entrepreneurs — hackers, pirates, gangsters, con men — that we don’t really talk about.

OZY: How do they organize and work and fit into the world?

A.C.: I tend to characterize a lot of the misfit groups I spoke with as subcultures within the formal economy: They aren’t totally isolated, but they aren’t fully a part of mainstream society. And no one underground organization is structured the same. Mexican drug cartels can be a bit like Exxon, with rigid hierarchies and command-and-control systems, where some of the hacker groups I spoke to were more collectivist. A French activist group I spoke with built itself on the ideas of anonymity and being without a leader.

OZY: What role do these misfits and their innovations play?

A.C.: Misfit innovations shape and shake up the cultures around us. Historic pirates created constitutions and proto-democracies before they existed in Western Europe. The pornography industry pioneered video-streaming technology. Artists and activists have always questioned established dogmas and orthodoxies — they push culture forward. Hackers challenge the monopolistic control of information. The Mafia invented the franchise structure before corporations like McDonald’s. There are countless ways misfits shake up culture.

OZY: What was it like to research the book?

A.C.: To be honest, there wasn’t any time I felt afraid. The only remotely dangerous thing was getting driven around Mumbai on the back of a mafioso’s motorcycle while he popped a wheelie. We were driving extremely fast and I almost fell off. But overall, I was really surprised by how many times I met people in the underground economy who felt really philosophically aligned. I think I have more values in common with a lot of the gang leaders I met than I do with Wall Street bankers or corporate lawyers.

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