Freakonomics Chapter 3 Quiz

Conventional Wisdom

• Defined as aligning with self-interest and personal well-being while avoiding unnecessary effort or disruption in life.

Sudhir Venkatesh

• Pursued a PhD at the University of Chicago, focusing on poverty studies.
• Discovered the Black Gangster Disciple Nation while researching a poor Chicago neighborhood.
• Initially struggled to gather data through questionnaires but became fascinated by the gang's lifestyle.
• Spent six years living among gang members, viewing drug dealing as a business.

J.T.

• Leader of the crack gang, educated with a business degree, and a college graduate.

Different Roles in the Gang

• Rank and File: Unemployed members awaiting advancement.
• Foot Soldiers: Street-level dealers working their way up.
• Officers: Key roles including enforcer, treasurer, and runner.
• Leader: The highest authority within the gang.

Rank and File

• Composed of unemployed individuals, loyal to the gang, aspiring to become foot soldiers.

Foot Soldiers

• Estimate: 25-75 members.
• Role: Street-level drug sales with a modest annual salary of $1,184.

Officers

• About 3 members fulfill this role.
• Responsibilities include safety enforcement, financial management, and transportation.
• Report directly to J.T. with an annual salary of $8,400.

Leader

• Singular position responsible for managing gang members and financial distribution.
• Earns an annual salary of $100,000.

Annual Revenue of Gang

• Total revenue generated by the gang is $384,000.

Drug Dealer vs. McDonald's Worker

• Earnings of drug dealers vary based on rank, similar to pay differences among McDonald's employees.
• Drug dealers: Foot soldiers earn low (like burger flippers), leaders earn much more (like franchise owners).

Tournament Concept

• Members must enhance their skills to advance within the gang's hierarchy, resembling a competitive tournament.

Living Situations of Drug Dealers

• Many drug dealers lack sufficient income to afford independent living, often resulting in them living with their mothers.