"Steven Levitt analyzes crack economics" - Kristine Mijatovich

http://www.ted.com/talks/steven_levitt_analyzes_crack_economics.html

The TED talk I chose was Steven Levitt, the author of the wildly successful book Freakonomics, talking about drug selling and gangs in Chicago. People seem to think that drug dealers gain a lot of money from their work and therefore have a lot of “bling.” He explains how being in a gang and selling drugs is not so glamorous, but in fact the opposite. First, the drug of choice by the inner-city gangs is crack cocaine for a few reasons. Selling marijuana is not very profitable, and the market for powdered cocaine is mainly rich white folk. So, before crack cocaine came about in the early 1980’s, being a gang leader had absolutely no money tied to it. Crack cocaine grew in popularity very fast, and soon there was a large market for it, from which the gang leaders tried to benefit. Levitt draws a parallel between the gang he and his partner got to know personally, and a large corporation such as McDonald’s. One similarity between the two is the way they are organized, or their hierarchy. First, is the board of directors, followed by the “regional VPs,” or the guys who control one part of the city. Under them are the ones in charge of the “franchises,” or the small, local blocks of the city, who are like entrepreneurs. The last group is the “foot soldiers” who have the dangerous job of actually selling the drugs. The foot soldiers are compared to the McDonald’s employees who actually work in the store taking orders and making burgers. The majority of the people involved in the drug-selling of the gang are the foot soldiers, and Levitt estimates that they typically earn equivalent to $3.50 an hour, way below minimum wage. This little amount of money shows how selling crack cocaine is not the lucrative job people seem to think it is. If a person is lucky, they could rise up and possibly make over $100,000 a year. This is what the talented individuals strive for, because they do not see any legitimate ways out of the system. One other point Levitt makes is that the death rate in this particular gang was 7% per person per year, meaning in a person’s fourth year, he has a 25% chance of dying. The death rate of soldiers fighting in Iraq is 0.5%. People have been joining gangs as a right of passage, with the hopes of rising up in the gang, but never had the opportunity because those in power stayed in power. He ends by comparing some principles of economics to the general standards of the gang, and proves they are very similar.

Steven Levitt went to Harvard University with a BA in economics, and furthered his education at MIT, emerging with a Ph.D in economics. He won the prestigious John Bates Clark Medal for being the most promising economist under 40 years of age in 2004, followed by the publication of his first book, Freakonomics in 2005. Levitt has published over 60 academic publications on a multitude of economic topics such as crime, politics, and sports. One thing that attracted me to Levitt is his use of articulation. Not only has he extensively researched a topic I am interested, but he draws attention to it and people listen to him. Levitt had a partner in this study, named Sudhir Venkatesh. Sudhir was the main collector of data in the gang, gaining trust and camaraderie within the gang. He did this by becoming their friends and basically living with them. Sudhir is a very respected sociologist and teaches at Columbia University.

This TED talk resonated with my desires for the future because I am very interested in how people are and interact with each other. While I may not want to follow in the economic footsteps of Levitt, I am interested in directly dealing with people and making a difference in their lives. I will be attending Fordham University in Bronx, New York, which is obviously a big city where lots of people reside. I am not sure yet what I want to study, but I am considering forensic psychology, where I can work directly with juveniles or adults in prison. There is a lot of gang activity in prison, which is what drew me to this video. Although I do not know what to study, I am positive that New York is the best place to be for the types of careers I am interested in. If I were to choose psychology, I would study it to the full extent needed to practice clinical psychology, a Ph.D, which can be attained after a B.A. A summer gig I might be interested in would be working at a child shelter, where preventative measures can be taken to stop the cycle of gangs and show them a better option.