Saturday, September 29, 2018

The Criminal as Entrepreneur

From American Affairs, Fall 2018, Volume II number 3:

About the Author
Cedric Muhammad is an entrepreneur and author of The Entrepreneurial Secret. He is the former general manager of Wu-Tang Management and is a member of the African Union’s Congress of Economists. Follow him on Twitter.

Painting can do for the illiterate what writing does for those who can read.
—Pope Gregory the Great

Drug dealers anonymous / Y’all think Uber’s the future, our cars been autonomous.
—Jay-Z, “Drug Dealers Anonymous
Jean-Eugène Buland (1852–1926), Le Tripot (The Dive) (1883), oil on canvas, 63.5 × 109.2 cm, location not known. Wikimedia Commons
The latest iteration of rap beef—this time between the multiplatinum hitmaker Drake and the street-credible lyricist Pusha T—had all of the attributes of the tradition, only inart was fueled by the warp speed of social media and the glitz of a calculated marketing plan. Witty innuendo, gossip, and slick production were married to the Spotify playlist algorithm and Instagram stories. But there was something else at work in the reemergence of Pusha T, a forty-plus-year-old rapper who was the consensus winner in the battle. His open embrace of references to and imagery from the entrepreneurial aspects of drug culture brought a motif of the decades-old gangster subgenre in rap music1 back to front-and-center status. Pusha T relied on the artistic presentation of a black American antihero—the drug dealer MC (master of ceremonies)—a play on the transmutation of cultural capital that has accrued to both the street hustler and hip-hop artist who remain closely tied to their communities.

When Pusha T rapped on “If You Know You Know” that “A rapper-turned-trapper can’t morph into us / But a trapper-turned-rapper can morph into Puff,” he indicated a separation of sorts: an artist could never do what a street entrepreneur does, yet a hustler could not only make music but also conduct business at the highest level of the music industry (a nod to Sean “Puffy” Combs, whom Pusha described as the ultimate “street dream”). And by making clear that he didn’t care whether the average person understood the code he spoke, he (and the TMZ-destined, meme-worthy aspects of the back-and-forth) intrigued both those outside of the culture and people residing within those zip codes most familiar with “the life” he described.2 But why are such figures so intriguing?

The Celebration of Crime in Popular Culture
The celebration of crime is not a new phenomenon in American culture. David E. Ruth’s Inventing the Public Enemy: The Gangster in American Culture, 1918–1934 (University of Chicago Press, 1996) showcases the phenomenon as it played out a century ago. And Thomas H. Pauly, in tracing the evolution of the criminal throughout popular culture, describes the development of an image that makes the pure celebration or condemnation of criminal activity virtually impossible:
The criminal is the menace, the alien, the Other—the one we fear, avoid and condemn. Because criminals are outlaws, they operate outside of the rules and expectations by which we define ourselves as a society. But because they exist within our society, they threaten those codes that give our lives order and security. [But] we also realize that criminals are not always obvious outsiders. Some operate at the highest levels of respectable society and from very influential political and business positions. When this type of criminal ceases to be the random oddity and seems commonplace, our normal suspicions become confused and turn back upon themselves.3
Normalization of the street hustler, criminal, and gangster has been a staple of American pop culture, largely (it seems) because the lines between immoral and moral, informal and formal, illegal and legal have always been blurred.

In “Big Funerals: The Hollywood Gangster, 1927–1933,” a treatment of the image of criminal entrepreneurship, Andrew Sarris discusses the presentation of the “urban criminal” in cinema from The Musketeers of Pig Alley (1912) to The High Sign (1921) to Underworld (1927) to Little Caesar (1931) to Scarface (1932).4 “Crooks and criminals go back very far and down very deep in all cultures,” he wrote: “Cain as sinner rather than criminal because murder violated God’s law before there were any laws drawn up by men, The Thief of Bagdad, MacHeath in The Beggar’s Opera and later in The Threepenny Opera, Fagin, Bill Sikes, Raskolnikov, Smerdyakov, the denizens of François Villon’s Paris, the pirates, outlaws, highwaymen, and cutthroats of song and story. . . . The movie gangster drew from time to time on all these prior cultural sources.” With this in mind, Sarris determined, “The gangster movie was thus born full grown out of the union of mythology and sociology, literature and journalism.”5 That union—as it plays out across ethnicity, specific criminal activity and prohibition, legalization and decriminalization movements—suggests the superiority of art, at times, over politics in conveying popular sentiment in society.

It is the centrality of community sentiment and the shifts in it that explain why criminals are often popular. Black’s Law Dictionary defines crime as “an act committed or omitted, in violation of a public law, either forbidding or commanding it; a breach or violation of some public right or duty due to a whole community, considered as a community.” If a “community” finds a public law (or the motivation for it) more offensive than a committed or omitted act, however, or even sees public authority as less legitimate than its own customs and traditions, it stands to reason that the definition of “law” will not always be in alignment with the community itself. Should a “criminal” emerge who is seen as more faithful to the customs of the community, notwithstanding the standards of public law, he or she is likely to be more trusted than any central lawmaking or law-enforcing institution.
Perception matters, and in America kinship-based communities have often seen local, state, and federal governments in the light of Psalm 94:20 (“Shall the throne of iniquity have fellowship with thee, which frameth mischief by a law?”)—as entities with which they are incompatible, entities that even conspire against them, at times, through legal means. Inseparable from those perceptions, moreover, are the economic and entrepreneurial aspects of crime, and how they interact with community aspirations.
The Criminal as Businessman
Daniel Bell’s seminal 1953 essay “Crime as an American Way of Life” pursued greater clarity about the true relationship between crime, community, and culture.6 Crime, he suggested, “has a ‘functional’ role in the society, and the urban rackets—the illicit activity organized for continuing profit rather than individual illegal acts—is one of the queer ladders of social mobility in American life.”7 Bell argued that American organized crime could not be understood without an appreciation of “(1) the distinctive role of organized gambling as a function of a mass-consumption economy; (2) the specific role of various immigrant groups as they one after another became involved in marginal business and crime; and (3) the relation of crime to the changing character of the urban political machines.”8 To update that tripod, one may add a fourth category—the lens of artists and mass media.

Bell understood the centrality of gambling to the underground economy of his day. “Like American capitalism itself,” he wrote, “crime shifted its emphasis from production to consumption. The focus of crime became the direct exploitation of the citizen as consumer, largely through gambling. And while the protection of these huge revenues was inextricably linked to politics, the relation between gambling and ‘the mobs’ became more complicated.”9

The “mobs” organized around gambling sorted themselves along distinct ethnic lines. Among the poor and lower class, and black Americans in particular, gambling germinated in the policy racket and “numbers” game whereby participants bet upon the selection of certain numbers. How the disparity between black American numbers entrepreneurs and those from the Jewish and Italian ethnic groups played out can be seen in the takeover of the Harlem policy racket. In African American Organized Crime: A Social History (Rutgers University Press, 1997), Rufus Schatzberg and Robert J. Kelly describe this takeover as follows:
“Dutch” Schultz was a notorious gunman, widely feared in the New York underworld during the bootlegging wars. . . . [He] recognized the enormous potential of the Harlem policy racket. . . . Because policy was an African-American game, and illegal, and because the policy operators did not have a reputation for violence, a take over seemed relatively easy and not very costly, either in lives or in bribes. The Harlem “coup” could be conducted, therefore, through a series of staged incentives that appealed to the common sense of his African-American competitors. . . . Pitted against the New York crime bosses, Harlem seemed vulnerable. Harlem policy operators paid the police but they lacked a crucial advantage—the political machine. . . . More than removing law enforcement as an obstacle in criminal enterprises, Schultz mobilized police officers, bail bondsmen, lawyers, and court officials as active participants in his criminal enterprises and as appendages in his war for the numbers rackets in Harlem.10
This history represents an early example of the complexities surrounding the intersection of organized criminal activity, ethnic succession, and politics. Three of the most iconic black American figures historically tied to the numbers business are Casper Holstein, Stephanie St. Clair, and “Bumpy” Johnson. Casper Holstein, an immigrant from St. Croix, became the “numbers king” of Harlem early last century. Holstein is the real-life figure who serves as the basis of the character “Valentin Narcisse” on the HBO series Boardwalk Empire. Madam St. Clair, an immigrant from the French West Indies, was another Harlem boss who dominated the numbers racket. “Bumpy” Johnson, the enforcer for Madam St. Clair, later negotiated an agreement with Lucky Luciano—after Dutch Schultz was killed—to return control of the Harlem numbers racket to black operators. (Incidentally, considering her pioneering role as “Madam Queen” and “Lady Gangster,” it is surprising that a criminal entrepreneur such as Madam St. Clair has received so little attention as a figure of female empowerment.)

The importance of this form of gambling to the so-called legitimate economy was immense. Ivan Light wrote in 1977 that “Numbers racketeers have been the largest investors in black-owned business or ghetto real estate and the chief source of business capital in the ghetto. . . . Numbers bankers have been virtually the only sources of business capitalization available to local blacks lacking collateral or credit rating.” In addition, “numbers bankers have been leading philanthropists in depressed black neighborhoods, making donations to churches and athletic teams, and providing Christmas and Easter baskets for the poor.”11 Light views the numbers racket as an adaptation by blacks to address their inability to source and form capital from legal market and government sources. The numbers game in Harlem, the “Italian lottery,” and “Bolita” (popular among Cubans) are as much the ancestor of the modern lottery in America as those which existed during colonial times, but few are aware of this history.

All of these issues related to gambling continue to play out today, though legalization has changed, and continues to change, its economic and cultural implications. As Bell noted, criminal entrepreneurial activity declined when its consumption-based profile ascended, and the emergence of the legal lottery as a fundraising source for governments appears to have removed intrigue from the practice, although it clearly still exists underground. The marriage between live entertainment and gambling as a leisure activity contributed to the rise of the racetrack and the casino as physical locations. Casinos eventually won out, as horse racing faded in mass popularity, and boxing moved from outdoor arenas to become an event hosted in venues inside of or attached to casinos and their hotels. As these changes occurred, criminal entrepreneurs gradually receded because they were unable to compete on such a large scale.

More recent developments in legalization, however, may precipitate a shift in the opposite direction. When Bell was writing, the transformation of gambling paralleled the transition from an industrial to a consumption economy. Today, developments like the recent Supreme Court decision (Murphy v. NCAA) that effectively legalized sports gambling reflect the transition to an information economy. The legalization of sports betting in an era of social media introduces a new legal opportunity—the efficient transfer of increasingly valuable information. As Bell pointed out, the most important aspect of horse racing was not the outcome of the competition itself but rather the pursuit of accurate information in advance of it:
As other rackets diminished, and gambling, particularly horse-race betting, flourished in the ’40’s, a struggle erupted over the control of racing information.
Horse-race betting requires a peculiar industrial organization. The essential component is time. A bookie can operate only if he can get information on odds up to the very last minute before the race, so that he can “hedge” or “lay off” bets. With racing going on simultaneously on many tracks throughout the country, this information has to be obtained speedily and accurately. Thus, the racing wire is the nerve ganglion of race betting.12
Sports betting and its lucrative newswire should reward the combination of a detailed knowledge of sports and higher social media usage (notably, in this decade Latinos and African Americans have shown disproportionate engagement on Twitter and Instagram). With athletes disproportionately coming from lower-income communities—at a time when such communities have increased access to these celebrities—a greater flow of material information regarding factors that influence their athletic performance may be at the disposal of entrepreneurs from these communities. And since variables impacting athletic performance are not gambling-specific, space remains for individuals who specialize in information and data curation. The modern version of the “racing wire” appears to provide more opportunities for entry-level derivative monetization.

Another positive contributing factor in this direction might also be the increased importance of status-signaling through social media and the disclosure and transference of previously unknown information by rappers and celebrities. This was a factor in the Pusha T/Drake beef. It is widely believed, due to the fact that both artists (and Kanye West) have contractual relationships with Adidas, that Pusha T was privy to information about an upcoming marketing campaign the company was developing around Drake and his previously unknown baby son. Some pondered whether the disclosure cost the company untold millions by preempting the promotional effort and weakening Drake’s popularity. Others, though, saw it in terms of the publicity boost it gave to a company fiercely competing with Nike and holding off Puma.13 Nevertheless, the incident gave lower-income communities—generally more known for consumption—the kind of information that only well-heeled investors and company insiders would typically have access to.

Here, culture is not innovating; it is only continuing a long tradition of art serving the function of information provider. As decision-makers increasingly value intelligence, human and artificial, and as social media and the internet have democratized access to the distribution of information, those closest to poorer communities have more opportunity than ever to unearth insights, reveal gossip, identify trends, and exchange them for compensation.
The Oldest Profession
When Dave Chappelle held up Pimp, Iceberg Slim’s legendary book, during a 2018 Netflix special, and used an aspect of the narrative as a metaphor for his own career and American society, he not only struck a chord with his audience, he also brought one of the most popular personalities in urban street culture back to center stage. Iceberg Slim, born in Chicago in 1918, was the author of seven books during his lifetime, two of which were published posthumously. Pimp: The Story of My Life (Holloway House, 1967) was his autobiography, in which Slim details his career as a pimp from the age of eighteen to forty-two.14 Filled with gut-wrenching anecdotes, slang, and proverb-like sayings, the book has become more than a cult classic....
About the Author
Cedric Muhammad is an entrepreneur and author of The Entrepreneurial Secret. He is the former general manager of Wu-Tang Management and is a member of the African Union’s Congress of Economists. Follow him on Twitter.
...MUCH MORE (including enough footnotes to make Matt levine weep for joy)

Possibly related, one of our top 20 posts of 2010:

Business Plans: Keep it Pimpin' Edition
Original post:
One of these days I'll do a post or two on business plans. For now:
From Vice Magazine's Viceland Today blog (we have 1300 feeds, what can I say):

Speaking of great amateur literature, here’s a detailed business plan from a pimp that outlines his strategy to expand business and “take care my bitches more better” titled, “Keep it Pimpin’.”

Judging from this guy’s lofty goals, we can only assume he’s small time and probably deals primarily in broken-ass hoes who don’t yield a high rate of return right now, but if he follows through with his plan to “discover hoes from all over (jail house, small cities),” and stays “high in pursuit looking for a prostitute,” his goal–to take his “game to the next level (from the concrete streets, to executive suites)” will be realized before he knows it. There is, however, one glaring omission from his business outline, and that’s the mention of slapping his product. Any pimp worth his weight in vagina knows sometimes the girls will get out of line. It’s important to have a record of your disciplinary intentions to keep both parties (pimps and prostitutes) on the same page.

It’s sort of hard to read, but the whole letter is below. Read it and take whatever advice you will from it. BTW, this thing came from a prosecutor. It’s real.