Grey Market

Terry always puts red diesel in his tank,
Rather get paid in cash or kind.
Keeps his money in his pocket,
And never in the bank.
Terry keeps his records in his mind.

(from) Red Diesel Show of Hands

Basic Information

Like the black market the grey market (or grey economy) represents a portion of a nation's economic activity with something illegal about it - not as explicit as the illegality of the black market (and therefore "grey" by contrast), but still less than legitimate.

In general grey market goods are fundamentally legal, but some aspect of their sale is not - common examples would be failure to pay relevant taxes, failure to follow licencing requirements or trading in breach of a monopoly, price-fixing agreement or general guild privilege. Typically, the more highly regulated the economy, the larger the grey and black sectors will become, supplying routes around, through and under the red tape and prohibition. Amongst elites, very similar measures, designed to go "over" the barriers will also be in place, but these are far less likely to be subject to criminal sanctions.

The concept of grey market dealing is not, it must be said, universally recognised - governments in particular tend to disapprove of any idea of degree when it comes to disobeying them and are liable to refer to all unregulated transactions as "black market" - is particularly true when dealing with those transactions that are designed to circumvent price controls or government imposed shortages¹.

Again, this tends not to take place from a specific marketplace - but is more likely to occur pretty much anywhere instead. Which can be an offence in itself if laws against forestalling and the like are in place.

Goods may also be traded "under the counter" when they are legal but socially disapproved of - examples include the tradition of American Bible Belt farm supplies stores carrying a clandestine trade in pornography, the discrete sale of contraceptives by early twentieth century barbers ("something for the weekend sir?"²) and covert alcohol sales in dry (but not prohibitive) areas. These usually rely on the retailer knowing their customer, or are sold by personal reference from another trusted customer. Strangers or those with an adversarial reputation are likely to face various levels of denial.

Sources

Bibliography

1. full source reference

Game and Story Use

• This is actually quite common - most people who aren't lawful stupid (and probably many who are) will have done it at some point in real life (often without thinking about it too much). Doing so in an RPG campaign should be just as trivial.
  • Locating grey market vendors probably requires appropriate local knowledge or street wisdom skills from a PC. This sort of transaction may also be the result of successful haggling rolls ("certainly we offer a discount for cash sir").
  • As noted, payment may be an issue - whilst not as hazardous as the black economy, the grey market usually frowns on traceable payments. Cash is king, but there are plenty of barter based and alternative currency trades going on "off grid" in most areas as well - the majority of which will qualify for the grey market. Buying into one of these sub-economies relies on having tradable goods or services.
• That said, it's also an offence that authorities with nothing better to do - or a vendetta to pursue - can find most people guilty of.
• Despite the popularity of grey-market trading, organised crime will often be involved somewhere, which can add excitement to an otherwise mundane transaction.
• In some times and places, the Grey Market may be a way of life - the former Warsaw Pact nations in particular tended to make it a necessity since endless state meddling in their economies made it almost impossible to live honestly. Towards the end, those with access to foreign currency - including the first pioneering tourists - could obtain all sorts of goods quite easily, especially when contrasted to the near impossibility of buying such goods with domestic currency.
• Under the counter sales will require tact and the correct social skills, so do not rely on the average PC being able to obtain them.

Footnotes

1. See, for example, the idea that goods sold outside a government rationing scheme are "black market" - although in the developed world, such rationing was last seen in and around WW2 where the term "grey market" had not yet evolved so some nuance is involved.

2. These days, if your barber offers you "something for the weekend" it's more likely to be recreational drugs - MDMA/ecstasy was often sold like this in the late 80s and early 90s. But that would be black market as the goods in question are illegal.