Sudhir Venkatesh spent numerous years in the early 90s following the lives of numerous Black Kings, most notably, a leader of a gang named JT. Sudhir was given unparalleled access to the internal workings of the Black King underground crack economy; he was even given a ledger of the gang’s finances by their chief accountant (CFO). The data included revenues and expenditures, distribution of wages (profits), and also included the, “Number of deaths, injuries, and arrests of gang members of this period, as well as interviews and observational analysis of the gang,”
Numerous findings emerged from this document. The first of which was that the individual street dealers (cashiers) make approximately minimum wage in earnings from the gang. There is however a bonus structure set in place for high earners and even a penalty for those who don’t sell enough or ‘mess-up’ and need to be taxed. Much like with legitimate businesses, “The primary economic motivation for low-level gang members appears to be the possibility of rising up through the hierarchy,” If one were to analyze the entirety of the gang’s hierarchy you would find that entire wage structure is quite comparable to legitimate businesses.
Please be sure to read the Author's Note at the bottom of the page. I hope you enjoy!
A consistent theme throughout all of the ethnographic gang research I have read is that ‘higher ups’ in the gang know that when a war between rivals breaks out the drug revenue depreciates. People (clients/customers) will stay away from the dealers who could potentially get into a shootout while the client is attempting to purchase the product. “This negative shock to demand is associated with a fall of 20 to 30 percent in both the price and quantity of drugs sold during fighting, and the drug operation becomes far less profitable.” Despite this fact, gang wars are still a more frequent occurrence than the leaders would like. Gangs have a death rate of 7% annually and, “Given the relatively low economic returns to drug selling noted above, the implied willingness to accept risk on the part of the participants is orders of magnitude higher
than is typically observed in value of life calculations.” This misconception of risk and reward is more indicative of the youthfulness of street level dealers than by any economic reasons.
Another interesting innovation of gangs that mirrors legitimate businesses is their collaborative efforts. Aside from maintaining peaceful relationships between potentially rival gangs (with the same identification i.e. Black Kings), collaboration serves an intrinsically economic purpose. Think of Wal-Mart. While this business could operate in a single town, the corporation can make immensely more profit by expanding their enterprise to other areas across the country. While gangs cannot necessarily expand nationally (although there have been numerous attempts to do so) they can much more readily expand regionally. JT in “Gang Leader for a Day” was tasked to build a Black King drug ring in his section of the Robert Taylor housing project of Chicago, in support of the ideal of expansion.
Once a disparate collection of neighborhood sets, with loose ties to one another and with little collaboration, local Black Kings factions were not part of an integrated hierarchy that had an eerie resonance, structurally and in spirit, to a corporate franchise in which members held offices and specific roles, and each constituent set was tied to the overall organization through trademark and fiduciary responsibilities.
Gang expansion is not only in name, but also in “nation.” In Chicago, there are two gang nations, the People and the Folk. These can be equated to the Bloods and Crips of Los Angeles. While Black Kings may exist in numerous communities and may have collaborated under a single banner, other gangs in the same nation have banned together. While there is less overall hierarchy and influence through the gang nation (this serves more as a basis for differentiation than economic) kinship bonds the constituency together in violence and in profit.
Another interesting shift of gangs in response to the illegality of their product is what is known as ‘corporatization.’ This theory contends that gangs serve a ‘positive’ purpose in the community around them. While it is true that illegal drugs are a destructive influence and gang violence in the 80s and 90s (when the paper was written) was at an all time high due to the popularization of crack in urban communities, corporatization serves as a silver lining. Essentially, gangs incorporate themselves into a community by providing products and services that the community cannot adequately get on their own (besides drugs).
One such service is protection. In his book “Gang Leader for a Day” Sudhir details an interaction with one of the female tenants of the building who claimed to have been raped by another tenant. JT and numerous other gang enforcers found the accused and proceeded to administer corporal punishment on the individual. JT and the gang officials also routinely patrolled the buildings, ensuring that only those welcome (either as tenants or by paying a rental fee to the gang to use the space) were there. The gang also served as an ex officio ‘pimp’ for free-lance prostitutes in the building.
A more subtle service the gangs provide is communication between the tenants and the city employees who oversee the buildings. The relationship between gang members and the Chicago Housing Authority is spoken of quite extensively in “Gang Leader for a Day” but typically boils down to both providing a check of power on one another. The gang leaders would ask for certain home items or repairs from the tenant president and the tenant president would, in turn, keep a watchful eye out on gang activities by shutting down events that get a little out of hand or “taxing” the gang for failure to perform some social function. Gang members would even help neighborhood children walk to and from school, to make sure that they remained safe in potentially hostile environments.
Gang members can also channel (or redistribute as JT would say) the drug revenue generated to the community. When the Chicago Housing Authority decided to move finances from physical upkeep of the housing projects to security, the residents of the Blackstone community in Chicago responded in protest. The gangs, on the other hand, “Channeled illicitly obtained revenues from drug economies to the general residential population.” Numerous authors have witnessed gangs providing not only physical services (protection) but monetary support. Some gangs help with paying monthly rent, or buy food/clothes for some of the tenants. For anyone who has ever seen the movie “American Gangster” or any other mafia type movie, this point is far more believable.
The importance of this gang corporatization is two-fold: First, it bolsters the gang’s image with the community, and secondly, creates a situation where the community can then rely on gangs in order to ensure providence. Each one of these are adaptive realities in order to ensure that the gangs can reasonably market their illegal product without having to worry about other tenant or community members ‘narcing’ on them. A tertiary benefit to gang corporatization is that when one of the tenants wants drugs, they will most likely go to the gang that has benefited them as opposed to the competition. This article helps elaborate on the communal identity of gangs (the community taking a stand against gangs is the originating step for gang prevention).
The most important message that can be taken away from gang corporatization is that it relies on the social disorganization of the community in order to be truly effective. In the post-1960 era, several profound social transformations deleteriously affected these ghetto spaces. The key components were the outmigration of industries and the ensuing loss of employment for blacks in blue-collar jobs; the subsequent segmentation of the labor market into a high-wage sector, out of reach for most displaced blacks, and a low-wage services sector where blacks competed with women and minorities for menial and part-time work opportunities; the ‘flight’ of economically and politically powerful constituencies to suburban and non-ghetto central city areas; and the evisceration of public institutions due to cutbacks in federal and state funding as well as the redirection of resources by municipal entities to other ethnic and higher-income neighborhoods.
These communities exist in a context where police do not respond as rapidly as they do elsewhere. These communities exist in a context where only about 4% of them are employed by legitimate businesses. In place of legitimate markets of employment, alternatives grow such as drug economies. The tenants’ own destinies are not even in their control. The Chicago Housing Authority (or comparable public housing authorities) has established draconian policies (albeit with good intentions) that have prevented the upward mobility of the residents. Essentially, in the absence of legitimate governance, communities will look to gangs to fill the void.
The most prominent question to my mind when looking at the table is what would happen if Nick were to be in control of a business where there is no fear of being arrested or killed. A person could throw a dart at words between Abaddon and Peddler and hit something that would describe gangs. The fact of the matter is that gangs serve a very real purpose in communities. They provide a means for individuals to achieve the “American Dream.” While our conception of the dream does not include a 9mm pistol or the exploitation of addictions, the fact is, 9mm and drugs are all that remains in the ghetto.
Author's Note:
This is an old blog post I had posted on another site, www.gangsandsociety.org with two minor edits. The argument is that gangs in American urban communities can grow to become something the community can depend and rely on. It is very important to keep in mind that gangs such as this are few and far between, especially in the days after RICO. The gangs I speak of are large, organized, and older groups, not the majority of gangs, which are small groups of very young juveniles who appear and disappear very rapidly. One final note, the names of the gang and the individuals involved had been changed by the original Author of the source material, Sudhir Venkatesh. It is also important to note that the average age of gang members is under 18 years of age. Leaders are typically in their mid 20s with very few exceptions that are above 30.
Work's Consulted
Levitt, S, and S Venkatesh. 2000. “An economic analysis of a drug-selling gang’s finances.” Quarterly Journal of Economics 115(3): 755-789.
Venkatesh, Sudhir. 2008. “Gang Leader for a Day: A Rogue Sociologist Takes to the Streets.” Penguin Publishing
Levitt and Venkatesh 2000
Levitt, S, and S Venkatesh. 2000. “An economic analysis of a drug-selling gang’s finances.” Quarterly Journal of Economics 115(3): 755-789.
Venkatesh, Sudhir. 2000. “Are we a family or a business?” Theory and Society 29: 427-462.
Venkatesh, Sudhir. 1997. “The social organization of street gang activity in an urban ghetto.” The American Journal of Sociology 103(1): 82-111.