the probability of getting rich selling drugs

Why do so many drug dealers live with their moms?

(or the probability of getting rich selling drugs if you are not a phamaceutical company executive)

During the crack cocaine boom of the 1990s, the image of the millionaire crack dealer implanted itself on the public consciousness. But anyone who spent time around the Crips or Bloods or any other crack selling gang might have noticed something odd: A great many crack dealers still lived at home with their moms. Why was that?

Sudhir Venkatesh, a University of Chicago graduate student at the time, discovered the answer. He had originally been sent by his thesis advisor into a Chicago housing project to administer a sociological survey. But after a harrowing encounter with a local crack gang, he befriended its leader and virtually embedded himself with the gang for six years. He was given a pile of notebooks containing four years worth of the gang's financial transactions a trove of data that, when subjected to an economic analysis, proved incredibly revealing.

At root, economics is the study of incentives - how people get what they want, or need, especially when other people want or need the same thing. The rules apply just as well to a crack dealer as to a Fortune 500 business.

As it turned out, the gang worked a lot like most American businesses, though perhaps none more so than McDonald's. If you were to hold a McDonald's organizational chart, basically a pyramid, and the crack gang's organizational chart, the same pyramid, side by side, you could hardly tell the difference.

The gang was one of about 100 branches, franchises, of the Black Gangster Disciple Nation. The franchise leader whom Venkatesh befriended, a college graduate named J. T., reported to a board of directors. J. T. employed three senior officers and, depending on the season, from 25 to 75 'foot soldiers' meaning street level salesmen. (Autumn was the busiest season for selling crack; summer and Christmas time were slow.)

At the bottom of the organization were as many as 200 'rank and file' members, who weren't employees but did pay dues, hoping to one day become 'foot soldiers'. J. T.'s gang took in revenues of about $32,000 a month. Not counting wages, it cost J. T. about $14,000 to operate, including $5,000 for the wholesale purchase of cocaine and another $5,000 as a kickback to the board of directors.

J. T.'s single largest expense was the wage he paid himself: $8,500 a month, for an annual salary of about $100,000. There were roughly 100 leaders of J. T.'s stature within the Black Gangster Disciple Nation network. These were the drug dealers who could indeed afford to live large, or in the case of the board of directors extremely large.

Each of those roughly 20 directors stood to earn about $500,000 a year. So the top 120 men on the Black Gangster Disciple Nation's pyramid were paid very well. But the pyramid they sat on top of was gigantic. Using J. T.'s franchise as a yardstick - three officers and roughly 50 'foot soldiers' - there were about 5,300 other men working for those 120 bosses. Then there were the 20,000 unpaid 'rank and file' members, many of whom wanted nothing more than a chance to become a 'foot soldier'.

And how well did that dream job of being a 'foot soldier' pay?

About $3.30 an hour.

J. T.'s three officers didn't do much better: about $7 an hour.

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 have no choice but to live with their mothers.

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.

But selling crack is a lot more dangerous than most menial labor.

Anyone who was a member of J. T.'s gang for the four years covered in the notebooks stood a l in 4 chance of being killed. That's more than five times as deadly as being a lumberjack, which the Bureau of Labor Statistics calls the most dangerous job in the United States.

So if crack dealing is really the most dangerous job in America, and it pays less than minimum wage, why on Earth would anyone take such a job?

Well, for the same reason a pretty Wisconsin farm girl moves to Hollywood. For the same reason that a high school quarterback takes steroids and wakes up at 5 a.m. to lift weights.

They all want to succeed in an extremely competitive field in which, if you reach the pinnacle , you are paid a fortune (to say nothing of the attendant glory and power).

But in each of these glamour professions, the same problem exists: A lot of people are competing in what is essentially a tournament. Earning big money in J. T.'s crack gang wasn't much more likely than the Wisconsin farm girl becoming a movie star or the high school quarterback playing in the NFL.

Steven D. Levitt and Stephen J. Dubner, authors of "Freakonomics: A Rogue Economist Explores the Hidden Side of Everything."

back to stacks contents

This web site is not a commercial web site and is presented for educational purposes only.

This website defines a new religious ideology to which its author adheres. The author feels that the falsification of reality outside personal experience has created a populace unable to discern propaganda from reality and that this has been done purposefully by an international corporate cartel through their agents who wish to foist a corrupt version of reality on the human race. Religious intolerance occurs when any group refuses to tolerate religious practices, religious beliefs or persons due to their religious ideology. This web site marks the founding of the religion aptly named The Truth of the Way of Life - a rational religion based on reason which requires no leap of faith, accepts no tithes, has no supreme leader, no church buildings and in which each and every individual is encouraged to develop a personal relation with God through the pursuit of the knowledge of reality in the hope of curing the spiritual corruption that has enveloped the human spirit. The tenets of The Truth of the Way of Life are spelled out in detail on this web site by the author. Violent acts against individuals due to their religious beliefs in America is considered a “hate crime.”

This web site in no way condones violence. To the contrary the intent here is to reduce the violence that is already occurring due to the international corporate cartels desire to control the human race. The international corporate cartel already controls the world central banking system, mass media worldwide, the industrial military entertainment complex of America and is responsible for the collapse of morals, the elevation of self-centered behavior and the destruction of global ecosystems. Civilization is based on cooperation. Cooperation does not occur at the point of a gun.

American social mores and values have declined precipitously over the last century as the corrupt international cartel has garnered more and more power. This power rests in the ability to deceive the populace in general through mass media by pressing emotional buttons which have been preprogrammed into the population through prior mass media psychological operations. The results have been the destruction of the family and the destruction of social structures that do not adhere to the corrupt international elites vision of a perfect world. Through distraction and coercion the direction of thought of the bulk of the population has been directed toward solutions proposed by the corrupt international elite that further consolidates their power and which further their purposes.

All views and opinions presented on this web site are the views and opinions of individual human men and women that, through their writings, showed the capacity for intelligent, reasonable, rational, insightful and unpopular thought. All factual information presented on this web site is believed to be true and accurate and is presented as originally presented in print media which may or may not have originally presented the facts truthfully. Opinion and thoughts have been adapted, edited, corrected, redacted, combined, added to, re-edited and re-corrected as nearly all opinion and thought has been throughout time but has been done so in the spirit of the original writer with the intent of making his or her thoughts and opinions clearer and relevant to the reader in the present time.

Fair Use Notice This site may contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. We are making such material available in our efforts to advance understanding of criminal justice, human rights, political, economic, democratic, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the United States Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. For more information see: www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission from the copyright owner.