In chapter 3, Levitt and Dubner delve into the surprising economical features of a particular Chicago crack selling gang. It was Sudhir Venkatesh's bravery and commitment to his field of study that made it possible to analyze the shocking methods of this particular Chicago based gang. What made this analyzation possible for Levitt and Venkatesh was a notebook of the accounting records that the Black Disciples kept. Levitt and Dubner argue that there is a common misconception that all drug dealers make a ton of money when in reality this is not the case.
A graduate student at Chicago University, Sudhir Venkatesh decides to do some research on poor black people but as he experiences his first interaction with these gangsters rolling dice in a stairwell, he realizes there is a hidden world among gangs. Venkatesh enters a hidden world that no one would have ever thought existed when it came to business practices that these crack dealers follow. Venkatesh receives a special notebook from a gangster who is living his last days and as Venkatesh begins to analyze the notebook he realizes that a lot of economics is involved with crack dealing.
The notebook reveals the profits generated by the selling of crack as well as each ranks salary. What they came across that was surprising is that the lowest ranks make such little money and the highest ranks make a killing. The business of crack dealing has high reward if you're willing to risk your life but when you start out making the equivalent of $3.30 per hour is it really worth it?
The first statistic is introduced on page 96 stating, "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 next statistic appears on the next page, 97 and it explains how J.T.'s gang's revenue nearly quadrupled from the first year to the last year. The third statistic elaborates on the salaries among gang ranks, the lowest rank, foot soldiers, earned a pathetic $3.30 an hour. The last statistic I believe to be important describes the risk involved with being a foot soldier and explains how they have a 1 in 4 chance of being killed. I believe all of these chosen statistics are important to this chapter and the order of which they are introduced is exactly how I would present the statistics as well. It makes perfect sense.
If you start out with the first statistic, it basically tells how much revenue these board of directors (who aren't risking their lives) are receiving from every gang leader, nearly 20 percent! This statistic then leads in to how quick the crack industry can grow and how the profits can amount so quickly. Since the revenues quadrupled it means that the board of directors were making four times the amount of which they were making at the beginning. Then we notice how poor the salary of a foot soldier is, a measly $3.30 an hour which does not do pay for the risk that these foot soldiers are vulnerable to every day. These statistics expose the undesirable characteristics of becoming a crack dealer. There is such a small chance that you may end up being a "board of director" when in reality you are more likely to be killed before you ever even sniff at the opportunity of becoming a "board director."
Levitt and Dubner reveal the economics that are involved with crack dealing. It extremely surprising that these uneducated gangsters could follow a business model and generate such a profitable business. Levitt and Dubner expose the common misconceptions and back their opinions with legitimate facts. Why do you think so many young kids choose to be in gangs? Why don't they seek a job elsewhere? Or do you think that peer pressure is a common factor among these kids' decisions?
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