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Gang expert alum talks local underground economics

Sudhir Venkatesh, author of Gangleader for a Day, returned to campus Tuesday to speak about informal business practices.

Critics say the U of C exists in an ivory tower, but it got a dose of the underground Wednesday afternoon when author Sudhir Venkatesh (M.A. ‘92, Ph.D. ‘97) returned to give a talk on campus.

The lecture hall at the Harris School of Public Policy was packed as Venkatesh addressed the crowd, discussing the regulation and resolution of problems in businesses outside of the normal legal framework.

“I’m trying to look at the underground economy just as a regular economy,” said Venkatesh, now a sociology professor at Columbia University.

He examined two examples of conflict: One involving an alleyway mechanic in nearby Washington Park and one between a female sex worker and a New York City nightclub.

Venkatesh first offered the example of James, an alleyway mechanic. The dispute arose when another man tried to encroach on James’s local business. After James called on the help of a block captain and a pastor, he brought the dispute to community court. But a favorable ruling by the community body didn't deter the man.

“They couldn’t find the means to enforce their decision,” Venkatesh said. “They don’t want to hire mercenaries to deal with their problem, so they were stuck.”

Venkatesh explained that unconventional solutions such as the community court have larger long-term repercussions for the community, like estrangement from the local law-enforcement from operating outside the traditional legal system.

In his other main example, Venkatesh examined the story of Corinna, a sex worker who was beaten for trying to solicit a john without the permission of the nightclub. Margot, the manager of an agency for sex workers, stepped in and resolved the argument.

He explained that these dealings have moved from the neighborhood on street corners, to indoor spaces, like hotel bars and nightclubs. That fundamental change in the sex industry around 1999 has changed the nature of these disputes, Venkatesh said.

 “Now you have sex workers and johns meeting without going through this phalanx of ‘eyes on the street,’” Venkatesh said. The police are now no longer a protective force for these sex workers.

Previously, the thick circle of the neighborhood protected sex workers, because they worked in the open and the police were able to protect them from violence. With a change in their place of business and changed policing strategies sex workers can no longer count on the police to mediate their disputes.

From each example, Venkatesh focused on the resolution of disputes, showing the difficulties in solving problems when no formal system exists.

Attendees praised Venkatesh’s in-depth explanations, with stories from South Siders underscoring his messages about underground economies.

“I liked the sort of thick description, detail, and examples the he gave,” Northwestern University Professor of economics Sandeep Baliga said. “I’m interested in the rise of institutions out of anarchy and I found his example of the mechanics very interesting.”

Others enjoyed how open and personable Venkatesh was in answering questions,  both during the question-and-answer session at the end of the lecture and afterwards during the reception.

“I thought it was fantastic, especially how interactive it was,” said third-year Shruthi Venkatesh, who shares a last name—but no relation—with the speaker. “I thought that was very unique.”

Sudhir Venkatesh published Gangleader for A Day in 2008, following his exposure to the local South side gang activity of the Black Kings as a U of C graduate student. He later published Off the Books: The Underground Economy of the Urban Poor after studying the business dealings of the surrounding neighborhoods.

The Harris School Urban Policy Initiative, in association with the Population Research Center, sponsored the lecture.

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