THE FINAL WORD
of the major drug lords and their lieutenants is still very much like what you would expect from any other international company with vast resources, a built-in market, and competitor, franchisee, and distributor issues. Tom Wainwright, the British author of the excellent book Narcomomics: How to Run a Drug Cartel , describes how these “narcos” present the day-to-day challenges of the most sophisticated criminal syndicates on the planet in terms that would sound like they came from the Walmart or IBM handbook: “The same mundane problems that blight the lives of other entrepreneurs: managing personnel, navigating government regulations, finding reliable suppliers, and dealing with competitors.” So while the cartels operate ruthlessly and in the black market, they also must operate efficiently. This means that, even though they sell illegal products to a customer-base that is often addicted to them, they have to adjust with the times. Marijuana legalization and decriminalization in several U.S. states is one recent example. As recently as a decade ago, a big portion of cartel profits – some estimates as high as 20%-30% – came from marijuana. With legalization in Canada and some U.S. states like Colorado and Washington, the cartels have adjusted their business model, albeit on a minor scale. The losses to date are estimated to be small – in the 2%-3% range of revenue. This is not surprising, as most U.S. states still adhere to federal law and treat marijuana as a criminal
The most obvious one is the hardest to change so far... The illegal drug trade is really profitable. As a function of supply and demand, no reasonable, informed observer could ever think that we will wipe out – or even substantially reduce – the global illicit drug trade with more laws, policing, and interdiction efforts. The illegal drug trade is worth hundreds of billions of dollars, much of that going to the Mexican cartels. And it is estimated that the global war on drugs costs as much as $100 billion a year. With financial incentives that strong, there will always be men and women who will find a way to supply the demand for others to get high. And it’s clearer than ever that the biggest players in this mess – the Mexican cartels – are structured and operate like a black market Fortune 100 company. Yes, all of the stuff you have heard about cartel executions conducted in grisly and sadistic fashion are true. Cartels have beheaded, mutilated, and tortured on a systematic scale that is every bit as sadistic as what we have seen from Islamic jihadis like Al Qaeda. Despite what a casual observer may think, cartel violence is at a peak right now. Under the tenure of President Felipe Calderón, from 2006-2012, the country suffered a staggering 120,000 homicides. But Mexico recorded 29,168 murders in 2017, the most since the country began keeping homicide statistics in 1997. Yet underneath the bloodthirsty quasi-anarchy of the cartels warring with each other and the Mexican government, the decision-making
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March 2019
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