I asked Scott Shane sent to me about Tim Ogden’s quote, and he emphatically rejected the claim attributed to him as implausible and not supported by the evidence he presented. Here is his summary of what he wrote:
In my book Illusions of Entrepreneurship I describe a paper written by Rob Fairlie of the University of California Santa Cruz who found that people who were drug dealers in their youth were 11 percent more likely to be in business for themselves in adulthood. This effect, he argues (and has some evidence for) comes from preferences of certain types of people for certain types of jobs, not “having a drug record.”
UPDATE: This post originally had a longer direct quote from Shane, but I heard indirectly that he was displeased by my quoting without asking permission (shades of Lawrence Auster). I have edited it down to the most relevant bits that I already referenced and gotten a response from at Ogden’s blog.