The neighborhoods of hourly gunfire are the ones with the highest unemployment, the most rundown housing, the most abandoned businesses and empty factories and workplaces.[55] These are the precincts with the highest rates of teenage pregnancy and infant mortality. These are the communities with the rundown schools and the high rates of truancy and dropping out. The great challenge of American domestic policy for over thirty years -- since the days of the war on poverty -- has been to restore the vitality of our cities. But those policy initiatives, by and large, have utterly failed.[56]

One must wonder why our cities have been so resistant to restoration. With a largely intact infrastructure of utilities and transportation, and with neighborhoods inhabited by an eager and educable workforce close to markets, there do not seem to be obvious economic obstacles to revitalizing our urban industrial and commercial centers. With initiatives for public-private partnerships, and with substantial public investment, we must ask why our cities are resistant to rebirth. One answer may be that those who would manage such ventures, and those who would make such investments see the ever-present threat of violence and crime. Why should a businessperson choose to locate his or her business where -- of all possible locations -- there is a real daily risk of being mugged on the way to lunch or in the parking lot? Indeed, of the most highly trained, competent or inspired teachers, how many choose to risk orphaning their own children by teaching in neighborhoods where violence is almost inescapable? Which developers would bring new housing to blocks where theft from the construction site is a nightly occurrence? Ultimately, the greatest bar to the numerous individual acts that create real urban development -- in contrast to large scale public expenditures -- is the real and perceived threat of crime and violence which are the consequence of drug prohibition. While the number of actual killings are very low for teachers or the few investors in the inner cities, the fear is real and the danger of robbery is great.

In thinking about urban violence, it is commonplace to associate that violence with drugs. Indeed, politicians and pollsters typically use a unitary term, "crime and drugs." The police, of course, will tell you that where drugs are sold there is the increased likelihood of violence. Drug dealers carry guns and have body guards because they carry or have access to prodigious sums of cash or valuable drugs. Until we end the violence in poor neighborhoods, it will be impossible to substantially rebuild the housing, to invest in the businesses that will create employment, or to substantially improve our schools.

Our national murder rate is dropping right now. Nationally, between 1991 and 1995 the murder rate fell by 16.3%.[57] Police chiefs are taking credit for having adopted new strategies. Some Federal officials point to the expansion of police forces under the 1994 Crime Bill. Other officials point to expanded prison population and claim that we are locking up our way to safety. Yet, in over seventy-five of the nation's metropolitan areas, the homicide rate has increased between 1991 and 1995.[58] Nowhere does anyone dare claim that the violence of the drug trade has been reduced to insignificance. Indeed, following the current strategies in which there is the greatest investment -- prison construction and operation, and drug enforcement -- violence is unlikely to be significantly reduced. In fact, 1996 witnessed repeated warnings that a new wave of violence, fueled by the growth in the teenage population over the coming decade, will unleash hundreds of thousands of new "superpredator" violent criminals. Is there a strategy that can substantially address the factors that drive much of the urban violence?

While many drug dealers are immoral if not outright evil people, their use of violence is ultimately practical, and indeed, they feel it is necessary.[59] There are three fundamental facts that must be understood in this regard. First, the illegal drug trade is a business, a business that engages in between $45 billion and $50 billion in commerce in the United States every year.[60] This business is in the same league as the largest markets in America. In 1994, the total retail sale of furniture and home furnishings was $119 billion; gasoline service stations revenues were $142 billion, clothing and apparel sales amounted to $110 billion.[61] These revenues are comparable to the largest corporations in America. In 1995 the Chrysler Corporation's revenues were $53 billion (9th largest corporation's revenues in the U.S.), Philip Morris  -- $53 billion, Prudential Insurance -- $41 billion, State Farm Group -- $41 billion, Du Pont -- $38 billion, Texaco -- $37 billion, Sears Roebuck  -- $35 billion.[62] The second fact is that illegal drugs are extremely valuable. For example, in 1996, gold was selling for $400 per ounce. By March 1997, it was selling for $350 per ounce. In 1993 marijuana was retailing for $341.70 per ounce.[63] In 1993 cocaine was retailed in a range between $120 and $151 per pure gram or between $3402 and $4280 per ounce.[64] At wholesale, an ounce of cocaine sold in the range of $1200. That is, cocaine is between three times and ten times more valuable than gold on an ounce for ounce basis. And third, crack cocaine users make many purchases during the course of a day -- perhaps a half-dozen -- compared to purchasers of heroin (once or twice a day), or marijuana (once a week, or even less frequently)[65]. Crack cocaine, with its many daily transactions, requires a much larger retail sales force than other drugs.

Every business in America has conflict. Car buyers get stuck with lemons. Hollywood actors decide not to go ahead with a movie deal. Computer makers sue others for violating the antitrust laws that regulate competition. Customers do not pay what they owe to sellers. Sellers sell defective goods. In every one of these cases, there is a well understood body of law that governs how business is to be done, conventions about the common language of the business, and the law courts are open to all market participants to nonviolently resolve conflict. This situation is true for every business in America but the illegal drug business. If I contract to obtain a mortgage to buy a house and agree to pay three points, everyone understands that we are talking about 3% of the amount of the loan. If my mechanic charges me for replacing six points in my car, we understand that he is referring to automobile parts. If I am unsure about a transaction, I have an obligation to find out what the terms of the deal are.

But drug business operates under severe handicaps. First, there are limitations in the clarity of the terms of transactions. Since the transactions are illegal, conversations about them -- in person, in writing, or over the telephone -- are evidence that can be used to prosecute the parties. Thus drug dealers try to minimize their conversations, and to communicate as indirectly as possible. The parties speak vaguely or in code attempting to make any conversation less incriminating. Such conversations increase the likelihood of misunderstanding. Misunderstandings in legitimate business can be resolved by arbitration or a lawsuit. Misunderstandings in the drug business can't be resolved in court. A drug dealer cannot sue a customer to collect on a debt. A drug buyer cannot sue for breach of contract if the cocaine is not delivered on time, or has been "cut" to lower than expected purity. The only way that these conflicts are resolved is through violence or the threat of violence. A study of homicides in New York City in the late 1980s by epidemiologist Paul Goldstein and his colleagues found that of the drug-related homicides, they were overwhelmingly in connection with the drug trade, not the result of someone getting high on drugs (except for those high on alcohol), nor the result of someone killing to get the money to buy drugs.[66]

The second salient fact is the enormous value of the illegal drugs. By comparison, gold is kept in Fort Knox, in bank vaults, or highly secured jewelry stores. Gold is surrounded by guards, and by security systems. If someone robs a jewelry store, there are automatic alarm systems, video cameras, and armed guards. The police will be immediately summoned and respond almost instantly. Insurance investigators will soon follow, and their investigative powers are not limited by the Bill of Rights. If one should rob a retail store, one would get away with lots of checks and credit card receipts which are almost impossible to liquidate. One would not rob a car dealership, because almost no one buys a car with cash. But why rob gold jewelry if you can rob cocaine worth three to ten times as much?

Drugs are almost always paid for in cash at the retail level.[67] The drug spot does not take checks with two pieces of identification, and they do not accept American Express (unless you actually leave your card). The drug sellers have a product that is worth three to ten times the price of gold or cash receipts for selling such valuable merchandise -- thus they are a prime target for robbers. Drug sellers, like all cash businesses, need protection from robbery. But they cannot hire licensed security guards from the Pinkerton Agency, Wackenhut or off-duty police officers. Drug dealers have to hire their own security. What are the best employment qualifications to be a guard at a crack market? A proven willingness to shoot people. Talk is cheap. An applicant may claim that he is willing to shoot at a robber, but the best deterrent to robbery is to have guards who have a street reputation as shooters -- preferably killers. One of the largest businesses in America has the need to routinely hire killers. And people are looking for the work. When an underling in the Chambers brothers crack cocaine organization in Detroit stole $50,000 from the organization, numerous people sought the head of the organization, Larry Chambers, asking for the "contract" to kill the thief.[68]

The large number of transactions in the crack trade means a large sales force which means lots of young men carrying guns. Acclaimed criminologist Alfred Blumstein has attributed the dramatic rise in teen violence to the spread of crack cocaine in the late 1980s. As the number of kids carrying guns increases, other kids carry guns strictly for self-defense, and still other kids start to carry guns as a perverse kind of fashion statement. Teenagers have always fought. Now, however, instead of fighting with fists, knives, or zip guns, they fight with the tools of the drug trade -- assault weapons, semi-automatic handguns and sawed-off shotguns.