Sudhir Venkatesh Uncovers Underground Economy
May 31, 2011
A few days before his talk at Chicago Harris, sociologist Sudhir Venkatesh was driving through his old stomping grounds on Chicago’s South Side, where he conducted fieldwork as a University of Chicago doctoral student. He was researching a potential study of gun markets, and felt, he admitted later, he might be losing his ethnographer’s touch when three young men suddenly ran past his car with guns in their hands.
"Are they finding me or am I finding them?” he asked himself rhetorically,
For years, Venkatesh has been widely renowned for his ability to find fascinating subjects and bring their stories to life, as he did in his bestselling book Gang Leader for a Day. Now the William B. Ransford Professor of Sociology at Columbia University, Venkatesh recently began working as a senior research advisor for the U.S. Department of Justice analyzing data on black markets.
On Wednesday, May 11, he was the featured speaker for the Chicago Harris's Urban Policy Initiative lecture “Black Market Justice: The Underground Economy As a Regulation Problem.” Joining Venkatesh were Sam Peltzman, distinguished service professor of economics emeritus at Chicago Booth, and Ethan Bueno de Mesquita, an associate professor at Chicago Harris.
Using his ethnographic research, Venkatesh discussed several ways black markets police conflicts, and he shared the promises and pratfalls of regulating this underground economy.
"I don't think we've focused on the conflicts that arise and how they are resolved," he argued, summarizing the existing of research on black markets. "I want to look at the underground economy really as just an economy."
Venkatesh used two stories from his ethnographic work to detail how disputes are resolved, and violence dampened, without formal third party involvement. In one, an off-the-books Chicago mechanic took his grievance with an outside competitor to a newly established community court. And in the other, in lower Manhattan, a potentially hostile dispute between a sex worker and a client was quickly resolved by one of his informants. “It seems so smooth,” Venkatesh recalled of the mediation.
Venkatesh’s research on the sex industry has brought him substantial notoriety, with his work with University of Chicago Economics Professor Steven Levitt on street-level prostitution immortalized in Freakonomics. But at Chicago Harris, Venkatesh stressed that the underground economy includes more than the illicit professions listing black market locales—a cab service, a storefront church, a daycare—all on one Chicago block.
And the mechanisms of the underground economy, he argued, are not rigidly in place. With two snapshots from his research, Venkatesh showed how conflict resolution tactics have been disrupted and reinvented in the past decade by outside forces, like shifts in public housing and gentrification. “We rarely think about [underground economies] as changing,” he said, “as dynamic.”
In many of these markets, communities agreed to focus on intervening in violence rather than active prevention, he said. Whether policy should disrupt or support this approach, he cautioned, was an “open-ended question.”
But he did argue firmly that policymakers should avoid looking at the underground economy with a moral lens. “Take their vision of what they’re trying to achieve before you critique them,” he said.
-Mark Bergen
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