Like the standard business cycle, drug money creates booms, busts, and misallocations of investments and resources. One of the most insidious aspects of the drug industry is that its excess profits are invested in human capital.
This is the third in a four-part series. Read part two here.
Because the drug culture condones and encourages violence, a tragedy can be brought about merely through a casual remark — a diss. The insight here is to understand the fear and humiliation these children feel, and their hypersensitivity about their maleness. The fact is, they suffer from chronic anxiety but are afraid to admit it. They have no one to talk to about their feelings, and it would be looked on as weakness if they did. This is a recipe for disaster and, as we know from the news, often leads to anger and murder. And then of course there are disputes over women. A common reason for selling drugs is to compete for girls with the older men who can buy them expensive presents and provide them with security.
Like the standard business cycle, drug money creates booms, busts, and misallocations of investments and resources. One of the most insidious aspects of the drug industry is that its excess profits are invested in human capital. Hundreds of thousands of young men — who would otherwise have become successful teachers, artists, legitimate entrepreneurs, computer technicians, or doctors and lawyers - are drawn into a system in which they end up incarcerated or dead. Another fact to be aware of: once the source of money from the drug industry — “the drugpreneur” — is killed, arrested, or just stops selling, the people depending on his income look for someone else to supply the money. This is a tragic scenario that helps to sustain the industry. The new head of the household will have to start selling to keep up the level of family income.
The drug business at the retail level is not as profitable as it seems. First, there are the highly motivated and skilled young salesmen competing for street corners and clients. To keep up, the young dealer has to work 14-hour days. There are also many “costs of doing business”: the latest clothing fads have to be maintained, and the time spent under arrest and the money spent on lawyers is significant. Besides the obvious risk of being killed outright, there are life-threatening health issues of stress and related ailments. Counting all these costs, and the time invested, in my opinion, it is difficult to make much more than a cab driver: maybe 30 dollars an hour without benefits. There are spiritual and moral issues as well. Day and night, you know that you are doing something wrong. You have to rationalize the horrible effects your products have having on the people in your community.
A moment of humiliation and a life can be changed forever. Eugene was a top high school student who had won a fellowship to the University of Arkansas. On the first day of class he was pushed around and humiliated in this dorm by four seniors in front of their girlfriends. He went back to the farm where he was raised, got a shotgun, came back and lay in wait for his tormentors. He made them crawl and beg for their lives, but he didn’t kill them.
Realizing he would now be wanted on a gun charge, Eugene took off, driving all night to reach Detroit. He slept in his car for two weeks while trying to find work. He went into the drug trade and began a ten-year life of crime. Eventually he got caught and spent 11 years in Jackson State Penitentiary. Eugene came out as a model prisoner and became a successful youth worker. He had a knack for listening to kids and was able to explain the horrors of prison life. I remember seeing him talk to a high-risk population about prison life and explaining how you had no privacy at all. People actually watch you go to the bathroom. His talk silenced a room full of tough kids. Several of these kids later told me that Eugene’s description had chilled them to the core of their being and they would never break the law again. Eugene and I hit it off, and NFTE hired him to run our program for incarcerated youth.
I remember Ray, our NFTE Entrepreneur of the Year who came from a high school in the South Bronx, in 1988. The very night he graduated he got into a fight with an off-duty policeman. Ray and his friend beat the officer and Ray got a year in Riker’s Island. A horrible decision made in a second changed a life forever.
While in jail he got into fights with guards and was sent up to Clinton, another maximum-security prison, where he had more altercations with guards. He ended up in solitary for fighting, but he got a letter from his grandmother, just as he was about to be released back into the general prison population - planning to fight the first person he saw. The letter said: “Hurry up, Ray, and come see me, as I do not have a lot of time left.” Ray broke down weeping and from that moment he changed.
Ray became a model prisoner and, seven years later, when he got out, he came to see me in my office. I gave him 300 dollars to start the same small business he had begun 13 years before. He then got a job at Burger King and roomed with another NFTE graduate. Within two years he was a senior counselor at the Fortune Society, which specializes in re-entry programs for released prison inmates.
Read part four here.