the crack cocaine boom of
the 1990s, the image of the
millionaire crack dealer
implanted itself on the public
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.
discovered the answer.
Sudhir had originally been sent by his thesis
advisor into a Chicago housing project to administer a sociological survey.
After a harrowing encounter with a local crack gang, he befriended its
leader and virtually embedded himself with the gang for six years.
Sudhir 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
The gang was organized a lot
gang was one of about 100 branches, franchises, of the Black Gangster
The franchise leader whom Venkatesh
befriended, a college graduate named JT, reported to a board of
JT 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'. JT' gang took in
revenues of about $32,000 a month.
Not counting wages, it cost JT 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.
JT' single largest
expense was the wage he paid himself: $8,500 a month, for an annual salary of
There were roughly 100 leaders of JT' 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' pyramid were paid very well. But
the pyramid they
sat on top of was gigantic.
franchise as a yardstick - three
officers and roughly 50 'foot
soldiers' - there were about 5,300 other men working for those 120
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.
JT' 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
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
Anyone who was a member of JT' 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 US.
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?
the same reason a pretty
Wisconsin farm girl moves to Talmudwood.
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
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 JT'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."
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