Fairlie was interested in entrepreneurship in the black market and how it relates to legitimate entrepreneurship. So he looked at data regarding drug dealers, and he found that they were 10 to 11 percent more likely to become self-employed in legitimate businesses than people who weren't drug dealers.He goes on to make an argument about legalization:
So I'll go ahead and ask what Shane seems to be hinting at: Does drug prohibition change the incentives such that potential entrepreneurs pursue lives of crime rather than legitimate businesses?In the chapter, Why do Drug Dealers Live with Their Mothers?, didn't Freakonomics assert that average drug dealer makes very little money and could make more at McDonalds?
On one hand, those who call for the legalization or decriminalization of drugs have long argued that the drug war directly fuels the crime around the drug trade that it seeks to fight by creating a massive black market. The high profits in this black market attract people who might otherwise become legitimate entrepreneurs to deal drugs.
[via dailydose.net]
1 comment:
Seems to me the assumption is a classic causal/correlational dichotomy. A certain percentage of people are probably attracted to the "entrepreneurial" side of life. These entrepreneurs-to-be work within the context of their day-to-day life (i.e. drug culture).
People who peddal the drugs, according to Levitt (author of Freakonomics), are making less than a cashier's position at McDonalds. However, as seen on the TED talk, those who can ascend the ranks make six-figure incomes--and, in fact, for the inner city gang members at the time, the potential career in drug dealing was better than just about any other opportunity.
Basically, this strength is not taken from having been in drug culture, but exists within the individual and is applied towards drug culture. To explain the percentage differential, I think that people with entrepreneurial inclinations often tend to disregard certain cultural memes--how this disregard is directed makes the difference between success or self-defeating cycles of criminal behavior.
Cheers,
-Mickey
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