Questions and Answers
Conventional wisdom is the idea of associating __________ with __________.
Truth, Convenience
What is conventional wisdom?
The idea that we find highly acceptable what contributes most to self-esteem.
According to Galbraith, conventional wisdom must be __________, ______________, ____________ and _______________ though not necessarily true.
Simple, Convenient, Comfortable, Comforting
Who is Sudhir Venkatesh?
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Who is JT?
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A gang's organizational structure is almost identical to the American business known as __________.
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A crack gang works like the standard capitalist enterprise: you have to be __________ of the pyramid to __________.
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How are the motivations behind foot soldiers who make less than minimum wage, a pretty Wisconsin farm girl who moved to Hollywood, and a high-school quarterback who lifts at 5 AM similar?
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When there are a lot of people willing and able to do a job, that job generally doesn't pay well. What are the four meaningful factors that determine a wage?
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Explain the rules of the tournament.
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How are JT's incentives different from the foot soldiers'?
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What did crack cocaine have in common with nylon stockings?
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What is the purpose of Chapter 3?
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Who makes conventional wisdom?
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What are examples of conventional wisdom?
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What is the belief or truth that is assumed but not accurate?
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How is conventional wisdom involved with stickiness?
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Describe Listerine's advertisements.
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Describe the organizational structure of the Black Disciples gang.
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Explain how the incentives of police departments and the public media gave rise to explanations of the rising crime rate in the 1980s that were totally wrong.
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How did the records of the Black Disciples end up in the hands of a Chicago student?
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What are examples in the type of tournament in the labor market?
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How do the incentives of the street-level drug salesman differ from those of the gang leader owner?
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How did the invention of crack cocaine transform the urban street gang?
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Study Notes
Conventional Wisdom
- Conventional wisdom links truth with convenience, often prioritizing self-esteem over accuracy.
- This concept is defined as beliefs commonly accepted, despite lacking factual basis.
- According to Galbraith, conventional wisdom is characterized by being simple, convenient, comfortable, and comforting.
Sudhir Venkatesh and the Black Disciples
- Sudhir Venkatesh is a sociologist who studied the structure and operations of the Black Disciples gang.
- JT, a notable leader within the gang, provided Venkatesh access to insights into the gang's budgeting.
Gang Structure and Economics
- The organizational structure of drug gangs mirrors that of large corporations like McDonald's.
- Higher financial returns are available to those near the top of the gang's hierarchy.
- Individuals in various fields, from foot soldiers to aspiring professionals, often start at low wage levels but can ascend to higher earnings through dedication and skill.
Wage Determinants
- Wages are influenced by several key factors: job availability, necessary specialized skills, job unpleasantness, and demand for the service provided.
Drug Dealing Tournament Analogy
- The drug dealing business resembles a tournament where numerous participants initially vie for success; those unable to progress often withdraw.
- Success in this "tournament" leads to significant financial rewards and placement at the helm of the gang.
Incentives and Risks
- JT's established position allows for reduced work intensity compared to foot soldiers, who face greater risks and work harder to climb the ranks.
- Street-level drug dealers encounter higher mortality risks, while gang leaders face the threat of arrest.
Market Dynamics
- The emergence of affordable crack cocaine revolutionized urban gang dynamics, greatly increasing accessibility and sales for impoverished communities.
Erroneous Crime Perceptions
- Police and media narratives during the 1980s mistakenly suggested that cleaner neighborhoods implied reduced crime rates, leading to decreased police presence and increasing crime.
Conventional Wisdom Examples
- Notable examples of conventional wisdom include beliefs surrounding Listerine, rape statistics, and homelessness.
Listerine Marketing Strategy
- Listerine's advertisements popularized the term 'halitosis' to create consumer anxiety about bad breath, thus driving product sales.
Records Acquisition
- Venkatesh's research led him to unexpectedly acquire financial records of the Black Disciples after building relationships within the gang.
Labor Market Tournaments
- Fast food workers experience similar "tournament" dynamics, with low starting wages and limited advancement opportunities contrasting heavily with managerial positions.
Transformations in Drug Use
- The transition from cocaine to crack enabled more widespread use among lower-income populations, significantly boosting sales and altering gang activities.
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Description
Test your knowledge with these flashcards covering Chapter 3 of Freakanomics. Explore concepts such as conventional wisdom, truth, and self-esteem. Perfect for students looking to reinforce their understanding of the chapter's key ideas.