Inside the Black Gangster Disciple Nation Crack Cocaine Gang-Corporation

In less than 24 hours I completed Freakonomics: A Rogue Economist Explains the Hidden Side of Everything. Mark Safranski already summarized Freakonomics better than I could, so my “buy this book” post will be a graphical summary of one of the chapters: Why Do Drug Dealers Still With Their Moms?

A heroic grad student named Sudhir Venkatesh worked with a crack cocaine gang — the Black Gangster Disciple Nation — for several years. After attempting to pass out a survey, which began

How do you feel about being black and poor?

(a) Very bad
(b) Bad
(c) Neither bad nor good
(d) Somewhat Good
(e) Very good

Which, besides displaying a lack of symmetry between (b) and (d), left off the correct answer ((f) Fuck you) and almost got young Sudhir killed.

Slowly, though, Sudhir gained their trust, and discovered the corporate structure of the street toughts.

At the top of the pinacle where the Board of Directors, whose twenty boardmen each earned half a million dollars a year. Life was good for a Director

bgdn_board_of_directors_md
20-man Board of Directors, at $500,000 per annum = $10,000,000 annual expense for BGDN

Below the Board of Directors are the regional Franchisees. Operating like Sheiks, they grossed around $400,000 a year. However, with the Franchisee’s autonomy comes fiscal responsibility. Most of the franchisee’s income has to be spent on expenses, letting the franchisee net $100,000 a year.

bgdn_franchisee_md
100 Franchisees, at $100,00 per annum = $10,000,000 annual expense for BGND

The Franchise of the Black Gangster Disciple Nation studied then had three officers: An Enforcer, who shared acted like Barnett’s SysAdmin, maintaining peace from internal threats

bgdn_enforcer_md
The SysAdmin

A treasurer who, just like in Hall Governments, kept charge of the organization’s money

bgdn_treasurer_md
The Money Man

And a Runner, in charge of logistics.

bgdn_runner_md
Amateurs Talk Strategy, Professionals Talk Logistics

The annual salary of three officers was $8,000 per year each.

bgdn_officers_md
$8000 / officer / year * 3 officers / franchise * 100 franchises = $2,400,000 / year expense for BGDN

Below the officers were 500 Foot Soldiers. But like the groundtroops of the System Administrator, their job is not violence. As the local Franchisee reported:

We try to tell these shorties that they belong to a serious organization… It ain’t all about killing. They see these movies and shit, and they think it’s all about running around tearing shit up. But it’s not. You’ve got to learn to be part of an organization; you can’t be fighting all the time. It’s bad for business.

Like Barnett’s SysAdmin, the foot soldiers are mostly “private sector” — their true job is salesman. Each of the 50 Foot Soldiers earned $3,960 (yes, much less than minimum wage) every year.

bgdn_foot_soldier_md
$3,960 / foot soldier / year * 50 foot soldiers / franchise * 100 franchises = $19,800,000 annual expense for BGDN

Below the Foot Soldiers are 200 “rank and file.” These interns wish to rise to the level of Foot Soldier, and pay dues for the chance to one-day rise up the corporate ladder.

bgdn_rank_file_md
$25.50 / R&F / year * 200 R&F / franchise * 100 franchises = $510,000 annual revenue for BGDN

To graph annual income, for an average Director, an average Franchisee, and average Officer, an average Foot Soldier, and an average Rank & File:

Graphically, we can chart the organization structure as:

bgdn_hierarchy
Corporate Hierarchy

Or more traditionally, looking at the organizational structure as a “flow of security”

bgdn_security
Flow of Security

Realizing we can look at the “hierarchy” as just one type of flow, it becomes obvious we can chart the “flow of capital” as well:

bgdn_capital
Flow of Capital

Which opens questions about the political economy of crack cocaine gangs…

bgdn_rich
Suffocated by Fat Cats…

However, in Black Gangster Disciple Nation’s defense, foot soldiers do make up the single largest payroll expense for their gang

bgdn_payroll_md
…Or Starved By Labor?

One might note that if the Black Gangster Disciple Nation is typical of corporate-style crime, John Robb’s suggestions are dangerously wrong.

Interested in learning more? Buy the book.

Update: Stephen J. Dubner, a highly respected journalist and co-author of Freakonomics, was kind enough to link to me on the Freakonomics blog

Dr. Steven D. Levitt, Professor of Economics at the University of Chicago, as well as the other co-author of Freakonomics, was kind enough to comment below.

Update: Over at John Robb, Jamie links to this critique of this gangster of Freakonomics

They do present some anecdotal evidence that the gangsters were not well paid that doesn’t depend on the notebooks, but it’s if anything even weaker. The simple fact that someone lives with his mother is not actually knockdown proof that he is strapped for cash; something like thirty per cent of young Italian men do it for the simple reason that it’s better than cooking and cleaning for yourself. I also think it’s quite naïve to assume that when the gang members (who were, we shall remember, full-time drug dealers) asked Venkatesh to try and get them a janitorial job at the university, this showed that anything, even cleaning toilets on minimum wage, was a better life than the Gangster Disciples. I am hardly the most streetwise guy around, but even I can work out a couple of other possible reasons why a full time drug dealer might want a job which allowed him to wander round a university campus more or less at will. Students buy drugs[5].

Furthermore, even if we take the numbers in the notebooks as reliable, we are faced with the observable fact that crack dealers (even street soldiers) have expensive tastes and hobbies. Even leaving aside the question of trainers and jewelery (on which I have no hard data about ownership to argue against Levitt), it is an undeniable fact that even the most junior members of the Gangster Disciples were able to engage in the hobby of pistol shooting, a popular but expensive middle-class pastime which I would consider to normally be beyond the means of a burger-flipper at McDonalds. The non-salary compensation of JT’s street dealers might be really quite high; access to guns, free admission to nightclubs, favorable deals on stolen goods and clothing, regular social events with local rappers, it all adds up and compares really quite well to the fast food trade, and as far as I can see the informal healthcare plan was also quite generous compared to most mainstream employers in that it covered family members and had substantial death-in-service benefits which would have been worth quite a lot in a neighborhood that was not exactly Hampstead even for non-gang members. I find the seeming absence of any analysis of the non-salary component of compensation quite strange, particularly since the underlying work was done working with a sociologist who would at least have some analytical framework which one might use to measure the value of the benefit to the gang member of being in a gang and thus having some degree of status in a community where status mattered.

Read the whole thing

Interested in the graphics used in this post? Inkscape, OpenClipart, OpenOffice Draw, and Paint.Net are all free — as in speech!