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Study Views Drug Dealers as Entrepreneurs


July-August 1998

The drug business in minority neighborhoods consists of innovative "entrepreneurs" who have adapted their trade to accommodate the risky environment surrounding the transaction, according to a study by John Hagedorn, a professor at the University of Wisconsin at Milwaukee. The report, titled "The Business of Drug Dealing in Milwaukee," was funded by the conservative Wisconsin Policy Research Institute (John Hagedorn, "The Business of Drug Dealing in Milwaukee," Wisconsin Policy Research Institute Report, June 1998, Vol. 11. No.5; Editorial, "The business of dealing drugs," Chicago Tribune, August 15, 1998, sec. 1, p. 20).

To gather data for the study, Hagedorn distributed small business questionnaires to 28 drug businesses in two Milwaukee neighborhoods, one predominately Latino, the other mostly African-American. He dubbed the communities "Horatiotown" and "Algerville" instead of using any identifying terms. Hagedorn concluded that these drug markets are often "innovative," or adapt to changing conditions, and are driven by economics, not morality. While drug sales formerly took place on street corners and in houses, they now occur through drug runners who use beepers and cell phones, lessening the probability that the police will catch them.

Milwaukee mayor John Norquist called the report a product of "drug-addled minds," and denounced the study's conclusions as a "celebration of criminality." The president of the Wisconsin Policy Research Institute, James Miller, defended Hagedorn's study, saying it was based on several years of legitimate research. Hagedorn said that he expected his conclusion to be attacked. "We have different jobs," Hagedorn said. Politicians have "simple answers ... [but] my job as a social scientist is more complicated than the simple answer" (Mike Nichols and Jack Norman, "Norquist Launches Attack Against Drug `Business' Study," Milwaukee Journal-Sentinel, June 16, 1998; Wendy Cole, "Shhh! We Don't Discuss The Drug Biz Here," Time, July 13, 1998, p. 18).

John Hagedorn - University of Wisconsin at Milwaukee, Center for Urban Initiatives and Research, P.O. Box 413, Milwaukee, WI 53201, Tel: (414) 229-5916, Fax: (414) 229-3884, E-mail: <>.

Mayor John Norquist - 200 E. Wells Street, Milwaukee, WI 53202, Tel: (414) 286-2200, Fax: (414) 286-3191.

Wisconsin Policy Research Institute - P.O. Box 487, Thiensville, WI 53092, Teil: (414) 241-0514, Fax: (414) 241-0774, E-mail: <>, Web: <>.