Sudhir Venkatesh has conducted a lengthy, anecdotal study of the black market in the Chicago slums, which he details in Off the Books: The Underground Economy of the Urban Poor. Slate‘s ‘s new book on the underground economy. Slate‘s Patrick Radden Keefe provides a precis.
The people in Off the Books are struggling, and their many informal transactions represent a kind of adaptive strategy —and often an indigenous social safety net. Private property is a luxury in the neighborhood, so for $300 a pop, a restaurant doubles as a gambling hall on the weekends; prostitutes use the back room of the dollar store; the currency exchange sells fake Social Security cards obtained by a local pastor. All of this gives new meaning to the urban planning notion of “mixed use.”
Similarly, neighborhood residents get around bad credit by borrowing what money they need within the community. Debts aren’t always repaid with money. Venkatesh charts the degree to which promises and payments in kind substitute for cash. Small businesses give homeless people a place to sleep in exchange for food because it’s cheaper than paying a night watchman; a prostitute and a grocer transact business without ever opening their wallets. Leroy, a mechanic, eventually gets rid of his cash register, because “his customers seemed unable to pay with our nation’s legal tender.”
In his efforts to demonstrate that this shadow economy is anything but the desperate Hobbesian scramble an outsider might assume, Venkatesh can at times sound like Jane Jacobs extolling the civic merits of Manhattan’s West Village. “Beneath the closed storefronts, burned-out buildings, potholed boulevards, and empty lots, there is an intricate, fertile web of exchange, tied together by people with tremendous human capital and craftsmanship,” he writes. In this view, even Big Cat [the neighborhood pimp] is a “stakeholder” in the neighborhood, with an interest in seeing norms adhered to and order preserved. “It’s not a crack house,” as an old Onion headline had it. “It’s a crack home.”