Off the Books: The Underground Economy of the Poor

…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.