Freakonomics

J.T. hadn’t wanted this war. For one thing, he was forced to pay his foot soldiers higher wages because of the added risk. Far worse, gang warfare was bad for business. If Burger King and McDonald’s launch a price war to gain market share, they partly make up in volume what they lose in price. (Nor is anyone getting shot.) But with a gang war, sales plummet because customers are so scared of the violence that they won’t come out in the open to buy their crack. In every way, war was expensive for J.T.

So why did he start the war? As a matter of fact, he didn’t. It was his foot soldiers who started it. It turns out that a crack boss didn’t have as much control over his subordinates as he would have liked. That’s because they had different incentives.

For J.T., violence was a distraction from the business at hand; he would have preferred that his members never fired a single gunshot. For a foot soldier, however, violence served a purpose. One of the few ways that a foot soldier could distinguish himself—and advance in the tournament—was by proving his mettle for violence. A killer was respected, feared, talked about. A foot soldier’s incentive was to make a name for himself; J.T.’s incentive was, in effect, to keep the foot soldiers from doing so. “We try to tell these shorties that they belong to a serious organization,” he once told Venkatesh. “It ain’t all about killing. They see these movies and shit, they think it’s all about ru

In the end, J.T. prevailed. He oversaw the gang’s expansion and ushered in a new era of prosperity and relative peace. J.T. was a wi

And it worked. After six years ru

Now for another unlikely question: what did crack cocaine have in common with nylon stockings?

In 1939, when DuPont introduced nylons, countless American women felt as if a miracle had been performed in their honor. Until then, stockings were made of silk, and silk was delicate, expensive, and in ever shorter supply. By 1941, some sixty-four million pairs of nylon stockings had been sold—more stockings than there were adult women in the United States. They were easily affordable, immensely appealing, practically addictive.

DuPont had pulled off the feat that every marketer dreams of: it brought class to the masses. In this regard, the invention of nylon stockings was markedly similar to the invention of crack cocaine.

In the 1970s, if you were the sort of person who did drugs, there was no classier drug than cocaine. Beloved by rock stars and movie stars, ballplayers and even the occasional politician, cocaine was a drug of power and panache. It was clean, it was white, it was pretty. Heroin was droopy and pot was foggy but cocaine provided a beautiful high.

Alas, it was also very expensive. Nor did the high last long. This led cocaine users to try jacking up the drug’s potency. They did this primarily by freebasing—adding ammonia and ethyl ether to cocaine hydrochloride, or powdered cocaine, and burning it to free up the “base” cocaine. But this could be dangerous. As Richard Pryor famously proved—he nearly killed himself while freebasing—chemistry is best left to chemists.

Meanwhile, cocaine dealers and aficionados across the country, and perhaps also in the Caribbean and South America, were working on a safer version of distilled cocaine. They found that mixing powdered cocaine in a saucepan with baking soda and water, and then cooking off the liquid, produced tiny rocks of smokeable cocaine. It came to be called crack for the crackling sound the baking soda made when it was burned. More affectionate nicknames would soon follow: Rock, Kryptonite, Kibbles ’n Bits, Scrabble, and Love. By the early 1980s, the class drug was ready for the masses. Now only two things were needed to turn crack into a phenomenon: an abundant supply of raw cocaine and a way to get the new product to a mass market.

The cocaine was easy to come by, for the invention of crack coincided with a Colombian cocaine glut. During the late 1970s, the wholesale price of cocaine in the United States fell dramatically, even as its purity was rising. One man, a Nicaraguan émigré named Oscar Danilo Blandon, was suspected of importing far more Colombian cocaine than anyone else. Blandon did so much business with the budding crack dealers of South Central Los Angeles that he came to be known as the Joh

Verifying that claim is beyond the purview of this book. What is demonstrably true is that Oscar Danilo Blandon helped establish a link—between Colombian cocaine cartels and i

As long as there have been cities, there have been gangs of one sort or another. In the United States, gangs have traditionally been a sort of halfway house for recent immigrants. In the 1920s, Chicago alone had more than 1,300 street gangs, catering to every ethnic, political, and criminal leaning imaginable. As a rule, gangs would prove much better at making mayhem than money. Some fancied themselves commercial enterprises, and a few—the Mafia, most notably—actually did make money (at least for the higher-ups). But most gangsters were, as the cliché assures us, two-bit gangsters.

Black street gangs in particular flourished in Chicago, with membership in the tens of thousands by the 1970s. They constituted the sort of criminals, petty and otherwise, who sucked the life out of urban areas. Part of the problem was that these criminals never seemed to get locked up. The 1960s and 1970s were, in retrospect, a great time to be a street criminal in most American cities. The likelihood of punishment was so low—this was the heyday of a liberal justice system and the criminals’ rights movement—that it simply didn’t cost very much to commit a crime.

By the 1980s, however, the courts had begun to radically reverse that trend. Criminals’ rights were curtailed and stricter sentencing guidelines put in place. More and more of Chicago’s black gangsters were getting sent to federal prisons. By happy coincidence, some of their fellow inmates were Mexican gang members with close ties to Colombian drug dealers. In the past, the black gangsters had bought their drugs from a middleman, the Mafia—which, as it happened, was then being pummeled by the federal government’s new anti-racketeering laws. But by the time crack came to Chicago, the black gangsters had made the co