第 13 页

“Well then,” Venkatesh said, “how does it feel to be African American and

poor?”

“I ain’t no African American either, you idiot. I’m a nigger.” J. T. then

administered a lively though not unfriendly taxonomical lesson in “nigger”

versus “African American” versus “black.” When he was through, there was an

awkward silence. Still nobody seemed to know what to do with Venkatesh. J. T.,

who was in his late twenties, had cooled down his subordinates, but he didn’t

seem to want to interfere directly with their catch. Darkness fell and J. T. left.

“People don’t come out of here alive,” the jittery teenager with the gun told

Venkatesh. “You know that, don’t you?”

As night deepened, his captors eased up. They gave Venkatesh one of their beers,

and then another and another. When he had to pee, he went where they went—

on the stairwell landing one floor up. J. T. stopped by a few times during the

night but didn’t have much to say. Daybreak came and then noon. Venkatesh

would occasionally try to discuss his survey, but the young crack dealers just

laughed and told him how stupid his questions were. Finally, nearly twenty-four

hours after Venkatesh stumbled upon them, they set him free.

He went home and took a shower. He was relieved but he was also curious. It

struck Venkatesh that most people, including himself, had never given much

thought to the daily life of ghetto criminals. He was now eager to learn how the

Black Disciples worked, from top to bottom.

After a few hours, he decided to walk back to the housing project. By now he had

thought of some better questions to ask.

Having seen firsthand that the conventional method of data gathering was in this

case absurd, Venkatesh vowed to scrap his questionnaire and embed himself

with the gang. He tracked down J. T. and sketched out his proposal. J. T. thought

Venkatesh was crazy, literally—a university student wanting to cozy up to a

crack gang? But he also admired what Venkatesh was after. As it happened, J. T.

was a college graduate himself, a business major. After college, he had taken a

job in the Loop, working in the marketing department of a company that sold

office equipment. But he felt so out of place there—like a white man working at

Afro Sheen headquarters, he liked to say—that he quit. Still, he never forgot what

he learned. He knew the importance of collecting data and finding new markets;

he was always on the lookout for better management strategies. It was no

coincidence, in other words, that J. T. was the leader of this crack gang. He was

bred to be a boss.

After some wrangling, J. T. promised Venkatesh unfettered access to the gang’s

operations as long as J. T. retained veto power over any information that, if

published, might prove harmful.

When the yellow-gray buildings on the lakefront were demolished, shortly after

Venkatesh’s first visit, the gang relocated to another housing project even deeper

in Chicago’s south side. For the next six years, Venkatesh practically lived there.

Under J. T.’s protection he watched the gang members up close, at work and at

home. He asked endless questions. Sometimes the gangsters were annoyed by

his curiosity; more often they took advantage of his willingness to listen. “It’s a

war out here, man,” one dealer told him. “I mean, every day people struggling to

survive, so you know, we just do what we can. We ain’t got no choice, and if that

means getting killed, well shit, it’s what niggers do around here to feed their

family.”

Venkatesh would move from one family to the next, washing their dinner dishes

and sleeping on the floor. He bought toys for their children; he once watched a

woman use her baby’s bib to sop up the blood of a teenaged drug dealer who

was shot to death in front of Venkatesh. William Julius Wilson, back at the U. of

C., was having regular nightmares on Venkatesh’s behalf.

Over the years the gang endured bloody turf wars and, eventually, a federal

indictment. A member named Booty, who was one rank beneath J. T., came to

Venkatesh with a story. Booty was being blamed by the rest of the gang for

bringing about the indictment, he told Venkatesh, and therefore suspected that

he would soon be killed. (He was right.) But first Booty wanted to do a little

atoning. For all the gang’s talk about how crack dealing didn’t do any harm—

they even liked to brag that it kept black money in the black community—Booty

was feeling guilty. He wanted to leave behind something that might somehow

benefit the next generation. He handed Venkatesh a stack of well-worn spiral

notebooks—blue and black, the gang’s colors. They represented a complete

record of four years’ worth of the gang’s financial transactions. At J. T.’s

direction, the ledgers had been rigorously compiled: sales, wages, dues, even the

death benefits paid out to the families of murdered members.

At first Venkatesh didn’t even want the notebooks. What if the Feds found out he

had them—perhaps he’d be indicted too? Besides, what was he supposed to do

with the data? Despite his math background, he had long ago stopped thinking

in numbers.

Upon completing his graduate work at the University of Chicago, Venkatesh was

awarded a three-year stay at Harvard’s Society of Fellows. Its environment of

sharp thinking and bonhomie—the walnut paneling, the sherry cart once owned

by Oliver Wendell Holmes—delighted Venkatesh. He went so far as to become

the society’s wine steward. And yet he regularly left Cambridge, returning again

and again to the crack gang in Chicago. This street-level research made

Venkatesh something of an anomaly. Most of the other young Fellows were

dyed-in-the-tweed intellectuals who liked to pun in Greek.

One of the society’s aims was to bring together scholars from various fields who

might not otherwise have occasion to meet. Venkatesh soon encountered another

anomalous young Fellow, one who also failed the society stereotype. This one

happened to be an economist who, instead of thinking grand macro thoughts,

favored his own list of offbeat micro curiosities. At the very top of his list was

crime. And so, within ten minutes of their meeting, Sudhir Venkatesh told Steven

Levitt about the spiral notebooks from Chicago and they decided to collaborate

on a paper. It would be the first time that such priceless financial data had fallen

into an economist’s hands, affording an analysis of a heretofore uncharted

criminal enterprise.

So how did the gang work? An awful lot like most American businesses,

actually, though perhaps none more so than McDonald’s. In fact, if you were to

hold a McDonald’s organizational chart and a Black Disciples org chart side by

side, you could hardly tell the difference.

The gang that Venkatesh had fallen in with was one of about a hundred

branches—franchises, really—of a larger Black Disciples organization. J. T., the

college-educated leader of his franchise, reported to a central leadership of about

twenty men that was called, without irony, the board of directors. (At the same

time that white suburbanites were studiously mimicking black rappers’ ghetto

culture, black ghetto criminals were studiously mimicking the suburbanites’

dads’ corp-think.) J. T. paid the board of directors nearly 20 percent of his

revenues for the right to sell crack in a designated twelve-square-block area. The

rest of the money was his to distribute as he saw fit.

Three officers reported directly to J. T.: an enforcer (who ensured the gang

members’ safety), a treasurer (who watched over the gang’s liquid assets), and a

runner (who transported large quantities of drugs and money to and from the

supplier). Beneath the officers were the street-level salesmen known as foot

soldiers. The goal of a foot soldier was to someday become an officer. J. T. might

have had anywhere from twenty-five to seventy-five foot soldiers on his payroll

at any given time, depending on the time of year (autumn was the best crack-

selling season; summer and Christmastime were slow) and the size of the gang’s

territory (which doubled at one point when the Black Disciples engineered a

hostile takeover of a rival gang’s turf). At the very bottom of J. T.’s organization

were as many as two hundred members known as the rank and file. They were

not employees at all. They did, however, pay dues to the gang—some for

protection from rival gangs, others for the chance to eventually earn a job as a

foot soldier.

The four years recorded in the gang’s notebooks coincided with the peak years of

the crack boom, and business was excellent. J. T.’s franchise quadrupled its

revenues during this period. In the first year, it took in an average of $18,500 each

month; by the final year, it was collecting $68,400 a month. Here’s a look at the

monthly revenues in the third year:

Drug sales

$24,800

Dues

5,100

Extortionary taxes

2,100

Total monthly revenues

$32,000

“Drug sales” represents only the money from dealing crack cocaine. The gang

did allow some rank-and-file members to sell heroin on its turf but accepted a

fixed licensing fee in lieu of a share of profits. (This was off-the-books money and

went straight into J. T.’s pocket; he probably skimmed from other sources as

well.) The $5,100 in dues came from rank-and-file members only, since full gang

members didn’t pay dues. The extortionary taxes were paid by other businesses

that operated on the gang’s turf, including grocery stores, gypsy cabs, pimps,

and people selling stolen goods or repairing cars on the street.

Now, here’s what it cost J. T., excluding wages, to bring in that $32,000 per

month:

Wholesale cost of drugs

$ 5,000

Board of directors

fee 5,000

Mercenary fighters

1,300

Weapons

300

Miscellaneous

2,400

Total monthly nonwage costs

$14,000

Mercenary fighters were nonmembers hired on short-term contracts to help the

gang fight turf wars. The cost of weapons is small here because the Black

Disciples had a side deal with local gunrunners, helping them navigate the

neighborhood in exchange for free or steeply discounted guns. The

miscellaneous expenses include legal fees, parties, bribes, and gang-sponsored

“community events.” (The Black Disciples worked hard to be seen as a pillar

rather than a scourge of the housing-project community.) The miscellaneous

expenses also include the costs associated with a gang member’s murder. The

gang not only paid for the funeral but often gave a stipend of up to three years’

wages to the victim’s family. Venkatesh had once asked why the gang was so

generous in this regard. “That’s a fucking stupid question,” he was told, “ ’cause

as long as you been with us, you still don’t understand that their families is our

families. We can’t just leave ’em out. We been knowing these folks our whole

lives, man, so we grieve when they grieve. You got to respect the family.” There

was another reason for the death benefits: the gang feared community backlash

(its enterprise was plainly a destructive one) and figured it could buy some

goodwill for a few hundred dollars here and there.

The rest of the money the gang took in went to its members, starting with J. T.

Here is the single line item in the gang’s budget that made J. T. the happiest:

Net monthly profit accruing to leader

$8,500

At $8,500 per month, J. T.’s annual salary was about $100,000—tax-free, of

course, and not including the various off-the-books money he pocketed. This was

a lot more than he earned at his short-lived office job in the Loop. And J. T. was

just one of roughly 100 leaders at this level within the Black Disciples network.

So there were indeed some drug dealers who could afford to live large, or—in

the case of the gang’s board of directors—extremely large. Each of those top 20

bosses stood to earn about $500,000 a year. (A third of them, however, were

typically imprisoned at any time, a significant downside of an up position in an

illicit industry.)

So the top 120 men on the Black Disciples’ pyramid were paid very well. But the

pyramid they sat atop was gigantic. Using J. T.’s franchise as a yardstick—3

officers and roughly 50 foot soldiers—there were some 5,300 other men working

for those 120 bosses. Then there were another 20,000 unpaid rank-and-file

members, many of whom wanted nothing more than an opportunity to become a

foot soldier. They were even willing to pay gang dues to have their chance.

And how well did that dream job pay? Here are the monthly totals for the wages

that J. T. paid his gang members:

Combined wages paid to all three officers

$2,100

Combined wages paid to all foot soldiers

7,400

Total monthly gang wages (excluding leader)

$9,500

So J. T. paid his employees $9,500, a combined monthly salary that was only

$1,000 more than his own official salary. J. T.’s hourly wage was $66. His three

officers, meanwhile, each took home $700 a month, which works out to about $7

an hour. And the foot soldiers earned just $3.30 an hour, less than the minimum

wage. So the answer to the original question—if drug dealers make so much

money, why are they still living with their mothers?—is that, except for the top

cats, they don’t make much money. They had no choice but to live with their

mothers. For every big earner, there were hundreds more just scraping along.

The top 120 men in the Black Disciples gang represented just 2.2 percent of the

full-fledged gang membership but took home well more than half the money.

In other words, a crack gang works pretty much like the standard capitalist

enterprise: you have to be near the top of the pyramid to make a big wage.

Notwithstanding the leadership’s rhetoric about the family nature of the

business, the gang’s wages are about as skewed as wages in corporate America.

A foot soldier had plenty in common with a McDonald’s burger flipper or a Wal-

Mart shelf stocker. In fact, most of J. T.’s foot soldiers also held minimum-wage

jobs in the legitimate sector to supplement their skimpy illicit earnings. The