Off the Books: The Underground Economy of the Poor

by on December 13, 2006 at 7:24 am in Economics | Permalink

…in [south Chicago], as in so many American ghettos, confronting the local gang requires wading through some very murky waters.  This community is in many ways held together by a prevasive underground economy, and here, in the gray areas of ethics and legality, gang members and residents are inextricably linked.  In practice, many residents might have no direct involvement in shady trading.  However…the underground economy manages to touch all households, whether as a direct source of income, as a place to acquire cheap goods and services, or as a part of the public theater.  Thus, it is not easy to separate the innocent from the perpetrator…

That is from Sudhir Alladi Venkatesh, Off the Books: The Underground Economy of the Urban Poor.  You may recall, he is the guy who helped Steve Levitt crack the finances of a drug gang; here is a home page for him.

This book treats crime, gangs, poverty, micro-finance, the foundations of cooperative behavior, urban economics, Jane Jacobs, what the police maximize, and why so many barbershops rent out their back rooms to prostitutes, all rolled into one fascinating and profound volume.

So far this year Daniel Gilbert’s Stumbling On Happiness and David Warsh’s Knowledge and the Wealth of Nations are the only non-fiction books I have urged you to buy.  This book joins that list.  Very highly recommended, and Steve Levitt loves it too.

1 EC December 13, 2006 at 10:32 am


Sorry for the tangential request, but do you have recommendations for non-fiction books that are now in paperback? My arms are too feeble and my wallet too slight for hardcovers; plus the year or so between hardback and paperback can encourage more level-headed judgments, free from hype (just like current release movies versus on disc several months later).

Suggestions would be much appreciated; thanks.

2 Steve December 13, 2006 at 11:19 am

Thanks Tyler, always looking for non-fiction books with good recommendations!

3 Ray G December 13, 2006 at 8:48 pm

I thought maybe you didn’t care for Levitt’s book since you didn’t have it featured in a sidebar. Not that you have to feature every good book, but since his book is still “hot” I thought that it would be featured if. . .

4 dsquared December 14, 2006 at 5:13 am

[You may recall, he is the guy who helped Steve Levitt crack the finances of a drug gang]

or more accurately, the guy who cracked the finances of a drug gang, prepared all the data and then generously shared it with Stephen Levitt.

5 Ronisha January 11, 2007 at 3:35 pm

I think that this guy is a racist, why would you need to put this in a book this is doing nothing for the black community but further propagating the white stereotypical view of blacks “they are all drug dealers and practice piracy”. Yes they buy bootleg. I wonder is it because they can’t afford the real copy after paying the mortgage on their lush condoe’s on state street. What positive good is this writer/ racist doing for this particular segment of Chicago? Did he give some of his royalties to the babies mother of the dug dealer whose locked up? She doesn’t have money and her link doesn’t start until the 15th. How is he trying to change the community. Better yet WHY are the drugs so easily accessible. Why is okay for some to do wrong but just not the poor struggling lower class (the blacks in this book) Also why doesn’t this book talk about his fellow white peers of U of C who search these black dealers out to score some dope. So who is really innocent and who’s really the perpetrator? Where are the working blacks of this ghetto community, They don’t exist because this would further prove that this writer is only showing one side of the community. Judge Mathis doesn’t exist right? Everyone’s not affiliated with drugs !

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