Published Paper Details:

This paper argues that shadow economies are not peripheral anomalies or symptoms of underdevelopment but adaptive institutions that emerge when formal economic systems externalise health risk onto workers without adequate protection. Drawing on nineteenth-century literary evidence from Dickens, Hugo, and Dostoevsky -- read through Elaine Freedgood's method of strong metonymic reading -- alongside Hernando de Soto's theory of informal capital, Rosenblat and Stark's empirical study of Uber drivers, the Fairwork 2021 global report on platform labour during COVID-19, and Mia Moore's legal critique of algorithmic governance, the paper identifies a four-stage recurring institutional mechanism: health risk privatisation, income volatility amplification, vulnerability accumulation, and adaptive informality emergence. It demonstrates that this mechanism operates similarly across industrial capitalism and contemporary platform labour, despite significant differences in technology and scale. The paper concludes by proposing three institutional design interventions -- (i) health-indexed algorithmic constraints, (ii) portable risk contributions, and (iii) mandatory health transparency audits -- that would interrupt the cycle by making health economically visible within platform governance. The contribution is both theoretical, in reframing shadow economies as predictable institutional responses to risk externalisation, and practical, in identifying actionable policy directions for platform labour reform.