The Mexican Crime Cartels

Spiegel has vivid and gruesome coverage of the continuing violence in Mexico. Several things are clear at this point

1. The violence has become to some extent self-sustaining because several of the cartels are fighting each other. Whether the government ramps up or rolls back its heroic efforts, there will be violence as the cartels battle for territory as well as perpetuate the we-commit-atrocities-as-vengeance-for-past-atrocities cycle.

2. Had Proposition 19 passed, the cartels would still be there and Mexico would still be enduring horrific violence. I personally expected a modest drop in violence if the initiative passed, although people who study the cartels tell me I am wrong about that. They forecast that the effect of a small loss of business would be akin to taking away a few street corners from a drug market, which tends to increase violence as the remaining players fight it out over the reduced territory.

No matter who is correct about that issue, California’s marijuana business is just one of many lines of activity for the cartels. To wound them seriously the U.S. as a whole would have to legalize meth, heroin and cocaine (which isn’t going to happen and shouldn’t), and even then the cartels would have income from human trafficking, black market movies and cigarettes, kidnapping for hire, drug trafficking within Central and South America etc.

3. But even presuming national legalization in the U.S. of all drugs, the idea that the removal of the drug business would wipe out the cartels is an example of the “reversability fallacy” (which probably has a proper name in logic but I don’t know what it is). Reversability was also invoked during alcohol Prohibition in the U.S. Repeal advocates promised that re-legalizing alcohol production would eliminate the Mafia. But once a process has been put in place, removing an original cause does not logically imply that the process will stop. The Mafia was enriched by Prohibition, but by the time of repeal it had a life of its own and survived for decades afterwards as a force in American society. (Note, same fallacy applies to human activity and climate change…whether we caused it is irrelevant, all that matters is whether changes in our behavior now will make a difference…it’s entirely possible that we caused it to start but no longer have the power to stop it).

4. The basic problem in Mexico is not drugs but endemic corruption and weak governance in the states. Visting a peaceful city there a few years ago, I was informed by a police officer that he and the other officiers paid 10% of their salary each month to the sergeant who hired all the officers. The sergeant did the same for the captain. This was not considered remarkable, it was just the usual way of doing business, the culture of mordida.

As the Spiegel article notes, the corruption and weak states result in impunity for most crimes and widespread distrust of police and judges. This means that if drugs magically disappeared tomorrow, the cartels would still have enormous revenue available to them by tapping the legal economy – shaking down big companies, charging protection money to local merchants, supporting corrupt candidates who would siphon tax revenue to the cartels, and so forth.

How does a society with this level of in-built corruption correct itself? Can it? I have the same question about Iraq. A Mexican friend tells me that aguantar (to endure) is the most important verb in Mexican politics — the people expect little, demand little, and get little. If some RBCer has a compelling, relevant example of a society that made a successful cultural and political transformation from corruption at all levels to strong, honest, government, this would be a great time for you to share it and cheer me and lot of other people up.

Author: Keith Humphreys

Keith Humphreys is the Esther Ting Memorial Professor of Psychiatry at Stanford University and an Honorary Professor of Psychiatry at Kings College London. His research, teaching and writing have focused on addictive disorders, self-help organizations (e.g., breast cancer support groups, Alcoholics Anonymous), evaluation research methods, and public policy related to health care, mental illness, veterans, drugs, crime and correctional systems. Professor Humphreys' over 300 scholarly articles, monographs and books have been cited over thirteen thousand times by scientific colleagues. He is a regular contributor to Washington Post and has also written for the New York Times, Wall Street Journal, Washington Monthly, San Francisco Chronicle, The Guardian (UK), The Telegraph (UK), Times Higher Education (UK), Crossbow (UK) and other media outlets.

20 thoughts on “The Mexican Crime Cartels”

  1. even then the cartels would have income from human trafficking, black market movies and cigarettes, kidnapping for hire etc.

    Certainly, but one would think that businesses, even criminal ones, like to optimize their risk/benefit ratio. If these alternative enterprises are more lucrative and/or easier than drugs, then the cartels should be providing greater focus/effort on them, relative to drugs. The thing about drugs is that the transaction's consensual, concerns a finite quantity of a product that needs to be replenished for further consumption, and has no legal competition. The same can't be said for the above competing business ventures.

  2. I would be curious about Italy, as it, too, seems to have weak governance and powerful criminal groups, at least in some areas.

  3. Everyone knows government/police corruption will be with Mexico for the foreseeable future. That's economically damaging, but at the levels seen in say 2005, it was not devastating for the soul of the country. You seem to be arguing that cartels are immune to the loss of a massive portion of profits, and have the ability to sustain themselves (buying arms and government bribes) indefinitely on non-consensual (more difficult to commit) crimes in a significantly smaller economy. This is magical thinking.

    It's honorable that you're committed to our drug policy as essential to public health, but it has massive externalities that are going to be more difficult to hand-wave away as time goes on.

  4. "How does a society with this level of in-built corruption correct itself? Can it? I have the same question about Iraq."

    I have the same question about the U.S.

  5. Keith:

    I would look to South Korean, Malaysia, and Taiwan as socieities that use to have a lot more corruption than they have now. I don't know this 100%, but my impression is that these governments were corrupt for a number of decades after World War II, but then became more legitimate and societal relations became more transparent and legitimate over time.

  6. Entropy, hysteresis, etc.

    Or if you want your name on it, call it Humphreys-dumpty conundrum. Easier to break the egg than to reassemble it.

  7. Keith writes: The basic problem in Mexico is not drugs but endemic corruption and weak governance in the states.

    Are you prepared to extend that to the whole of Central America?

    Because it is increasingly looking like you must:

    President Obama, faced with skyrocketing violence and evidence of growing drug cartel power in Central America, for the first time has named three of the region's countries to the U.S. government's list of major drug-trafficking nations.

    The inclusion of Costa Rica, Honduras and Nicaragua on the "Majors List" was front-page news throughout the region, but there was little expectation that the designation would mean the U.S. would make new money and other resources available.

    In Nicaragua, President Daniel Ortega said the U.S. determination could be a wake-up call for U.S. legislators that narcotics "are seriously contaminating" Central America.

    Keith also writes: But even presuming national legalization in the U.S. of all drugs, the idea that the removal of the drug business would wipe out the cartels is an example of the “reversability fallacy”…

    This may be true. On not. The actual implementation would no doubt have quite a few surprises. One of which may be Steve Clay's analysis up above: Starve the revenue stream and you necessarily starve the beast. But in no way does your statement free from moral blame the effects the USA's demand for drugs has had on this region.

    As a matter of fact, if I was president of Nicaragua, I would be morally tempted to defray the cost of that demand on Nicaragua by legalizing drugs in certain areas. I would turn America's demand into a revenue stream. Which is to say: I'd set up holiday camps for Americans to fly in and snort and smoke and swim and sun. Leave your money, then go home. Would I be immoral to do that? I think not. The demand isn't going away. I'd cut a deal with the cartels and make it so.

  8. Keith,

    I think your argument is flawed on a number of levels:

    1. Legalizing marijuana in California, if allowed to stand by the US Federal Government (a big if, granted), would be akin to national marijuana legalization. As the recent RAND report on the issue argued, legalized marijuana from California would outprice Mexican marijuana everywhere within the continental US, except for Texas and New Mexico. That would be about 95% of the total marijuana export market of Mexican drug cartels.

    2. According to another RAND paper, marijuana constitutes between 16-26% of total gross export revenue for the cartels. Although not stated in the report, that more or less constitutes 30-40% of their net export revenues (about USD 1.2-1.5 bn). That is not losing a "few street corners": it is a massive exogenous shock.

    3. Would that reduce or increase violence? I don't know for sure (neither are Caulkins, Kilmer, et al), but for the life of me, I cannot think of a single example where the reduction or elimination of an illegal market as a result of an exogenous shock (legalization, trade liberalization, etc.) leads to an increase in violent crime rates. Maybe you can.

    4. There is an additional issues to consider: a) marijuana legalization would be an assymetric shock for Mexican cartels, i.e., it would be far more harmful to some cartels than to others. The Sinaloa Cartel probably controls 60-70% of the marijuana trade, which could represent as much as 50% of its net export income. Would that fact induce more violence? Not necessarily: I would argue that in the absence of marijuana income, Sinaloa would probably not be able to wage war pretty much everywhere. It would have to pick its battles far more carefully. Given that about two-thirds of all drug-related murders since 2006 involve Sinaloa (either as perpetrators or victims), that fact could have a significant violence-depressing impact.

    5. As for other illegal activities, they are, in terms of income, a drop in the bucket compared to the drug trade. Consider some basic parameters: there are officially some 1,500 kidnappings in Mexico every year; the average paid ransom is about USD 15,000. That comes out to USD22.5 million (not all of which is collected by drug cartels); that may very well be a large underestimate, but even if you multiply it by ten, you still get a figure that is about 1/6th of net marijuana export income and about 1/20th of total net drug export revenues. Or think black market movies: their price in any Mexican street is about USD 1-2 per DVD; even if the per capita yearly consumption of pirate DVDs was, say, two (a wildly inflated figure, mind you; according to record industry executives, some 60 million pirate CDs and DVDs are sold every year in Mexico, and those guys are prone to exaggerate), the total market would be worth some USD 220 million(not all of which would accrue to druga cartels; some 30-40% of that market is likely in Mexico City, where the cartels have little or no presence). Or think of the domestic drug market: considering prevalence rates and price rates, it is probably worth no more than USD 300-800 million (at most). So, in brief, Mexican organized crime would indeed survive full or partial drug legalization, but it would be way, way, way smaller, and far less of a threat to the Mexican state and people.

    6. The corruption canard has very little explanatory power: yes, indeed, there is corruption in many levels of government in Mexico, but that has been the case for a long while. And by most metrics (see the TI index, for instance), there is less corruption now than 20 years ago, particularly at the federal level. So how does that fit with your corruption=violence story? How do you account for the timing of the current violent wave? More pointedly, how do you account for the geographic distribution of said violence? By most accounts, there is far less corruption and better governance in northern Mexico than in southern Mexico; and yet, southern states have been pretty much spared from the current wave of killings (Yucatán, for instance, has a murder rate similar to that of Switzerland).

    Best regards.

    How about other sources of income? They all pale in comparison with international drug trafficking

  9. Estimado Alejandro:

    Thank you for your thoughtful, detailed and civil post. Let me address your points:

    1. I do not speak for the Obama drug policy team any more so this is my personal speculation, but I think it is logical: If California legalization of MJ "goes national", then many states that don't want cheap, legalized marijuana flooding in will put enormous pressure on Congress and the Administration to act. And if California marijuana goes national, the legal case for acting will be much stronger as we will be discussing interstate commerce. So I think there is almost zero chance the federal government would not stop California legalization from going national.

    Note though I did say that true national legalization of drugs would have an adverse impact on the cartels, so we agree on that.

    2. I may have explained this badly, but the proportions we are both quoting are similar. A drug market might be ten street corners, so losing a few street corners is not insignificant. Remember though my own view is that I expect some drop in violence, I was quoting others who study the cartels (I haven't), and giving their alternate view for balance, and to acknowledge the unknowns.

    3. I don't know either, as I indicated. I applaud you for saying you don't know, I wish more people in drug policy would use the words "I don't know"…humility is often wisdom in this area.

    4. Excellent point about asymmetric impact and thanks for the data. I could imagine the outcome you imagine, Sinoloa backs off. I could also imagine that Sinoloa's enemies see this as a time of weakness and try to wipe the remains of that cartel out. But lets say the first result occurs, they back off. If the impact of MJ legalization is asymetrically bad for that cartel it is by definition asymmetrically minimal for the others, so they'd still be very strong. As I said in my post, a significant wound to the cartels would require federal legalization of MJ, heroin and cocaine.

    5. Thanks for the kidnapping data (And is there a published source you can present/link to, I would like to learn more in this area). You are quite right that kidnapping that plus pirated records will not make up the income. I mentioned other things though that are more lucrative, like black market cigarettes, human trafficking, the drug market of central and south america (not just mexico) and potentially biggest of all, tapping the legitimate revenue stream of business and government.

    Remember the parallel of Prohibition: The mafia had only one illegal drug to market and it was taken away. And repealers promised the mafia would be crushed and it wasn't, it went on until it was forcibly dissembled (even that isn't true, it still goes on, but much weaker). The mafia moved into ripping off unions, prostitution, loan sharking, illegal gambling etc. Given that example I don't think we can dismiss the possibility of similar adaptability among Mexican cartels.

    6. We will just have to disagree about this. I think with respect that saying corruption is a "canard" trivializes what is an absolutely terrible problem. You seem to be saying that the pre-existence of the corruption undermines my argument but it actually reinforces my point, the corruption was fundamental, it is part of how the cartels got as strong as they are.

    I couldn't tell if you had a last point after "best regards" or if that was a word processing fragment. But in any case, thank you for responding to the post.



  10. Keith,

    Thank you for the detailed response. Let me try to clarify a few points:

    1) We basically agree on the basic framework of the issue: a) national marijuana legalization in the US would hurt the cartels; and, b) that is unlikely to happen through a state initiative/legislative process (such as Prop. 19).

    2) I think we also basically agree that marijuana is a significant portion (maybe the second largest, after cocaine) of a diversified portfolio of income streams accruing to the cartels.

    3) I once again declare my ignorance on the issue of the potential impact of marijuana/drug legalization on violence. A move of that sort would probably generate both violence-depressing and violence-inducing processes, and the net effect is uncertain. There's probably not a single data point that can settle the issue. But maybe we can proceed by analogy: did the (partial) legalization of gambling in several US states (through, say, Indian casinos) increase or reduce violent crime rates? How did the numbers-running crime syndicates react to that loss of an income stream? Likewise for prostitution in many countries. Or, probably more significant in terms of the number of people involved, what was the impact on violent crime rates of trade liberalization in many countries? That most likely put a lot of smugglers (i.e., criminals) out of work. Did they move into a different criminal activity or did they shift into the licit/semi-licit economy? Again, I don't have the answers to those questions, but it seems to me, at first glance, that there is a dearth of evidence linking the reduction/elimination of an illegal market with an increase in violent crime rates.

    4) On the assymetric shock issue, I think it would be awesome to try to model it using game-theoretical tools. I don't know if there's an ambitious graduate student reading this, but that sounds like a great thesis project. An issue to consider, though, is the potential impact of marijuana legalization on relative state capacity, given that the Mexican armed forces devote a significant number of troops to eradication. What would happen if those troops were devoted instead to interdiction efforts in Mexico's southern border? Or to peace-keeping/law enforcement duties in, say, Tamaulipas? My guess is that you could see a significant shift in the state/organized crime balance. A second issue to consider is the potential for cross-subsidies and/or synergies between different parts of the drug trade: with marijuana gone, would it become more expensive in relative terms to produce heroin or smuggle cocaine (e.g., a customs officer will probably not charge less to let in just cocaine, instead of cocaine and marijuana)? And would that cost increase be enough to shift some significant portion of drug flows back into the Caribbean route? Again, not sure, but those potential second-order effects are not trivial: losing the marijuana market might mean far more to the cartels than just the elimination of that specific income stream.

    5) You can check (for an independent assessment) or for government data (you might find some at Agreed on the rest: extortion (of either the private or public sector) is potentially a much larger revenue stream than pretty much any other illegal business. There is no good data on the extent of that phenomenon in Mexico, but here's my take on it: a) large companies (with the potential exception of the mining sector, given that their facilities tend to be in exposed rural areas) are not going to pay protection money to the cartels. Why? Because it's probably cheaper to beef up your private security spending: why pay the Zetas, when you can bring in 200 Israeli bodyguards or Blackwater or whatever for a significantly lower sum? As far as I know, that has been the case so far; b) most extortion victims so far have been small to medium size firms (and in Mexico, small is small: 94% of Mexican firms have 10 or less employees and sales of less than USD 20,000; you can check the economic census data at INEGI); those firms will probably pony up, but it does put a cap on the amount of money you can collect: shaking down small firms (for, say, USD 3000 per year) is a time-consuming process and probably, not a very efficient expenditure of limited violence capabilities (the cartels don't have that many thugs at any given time, mind you); c) that leaves the public sector and that could, indeed, be a problem (as it has been in, say, Italy or the US for a long time), but my guess, not having studied the issue that closely, is a) the primary target would most likely be small municipal governments with little disposable income and small public works programs (and that brings you back to the issue of efficiently using your violence resources), and, b)that seems to me akin to old-style corruption, an undoubtedly toxic activity, but relatively low violence-intensive. As for the amounts that might accrue from such activities, I have no clue, but here are some basic parameters: total public spending in Mexico at all levels is approximately USD 250 bn (some 25% of GDP); out of that, some 90% is debt service, wages and transfers (not the usual target of organized crime). That leaves you with USD25 bn, out of which some 60% is federal expenditure (again, not the likeliest of targets); so the ceiling on public-sector extortable income is probably some US 10 bn, a portion of which goes to states/municipalities with weak organized crime presence (say 20%, for argument's sake). So just to replace lost marijuana income, they would need to extort around 20% of the remainder. I hasten to say that seems highly unlikely. My best guess is potential public-sector extortion income is more in the hundred of millions of dollars range, and not in the billions range.

    5-a) As for trafficking to Central/South America, that seems highly unlikely. Could Mexican cartels beat the Colombians, price-wise, in trafficking cocaine or heroin to, say, Brazil (the only relatively large market in the region)? I highly doubt it (as far as I know, there is not a shred of evidence that they have even tried it). Mexican cartels have a competitive advantage over other organized crime groups in one (rather significant)area only: smuggling drugs to the US (and, maybe, Canada).

    6) I think we are talking past each other on the issue of corruption. Yes, indeed, there is a lot of corruption in Mexico (particularly in the police and the judicial system) and that is one of the reasons for the growth of organized crime. But that is not saying much. My point is about temporal and spatial distribution: why is impunity causing such widespread violence now and not 10 or 20 or 30 years ago, particularly given the fact that impunity and corruption was probably worse a decade or two ago? Mind you, the murder rate in Mexico went down consistently for two decades prior to 2007. And again, why is relatively less-widespread corruption coupled with high violence in Northern states, whereas relatively high-corruption Southern states remain peaceful? Or look at it in comparative terms: Mexico is not more corrupt than Indonesia or Sri Lanka or Argentina or Bulgaria; then, why the difference in the level of criminal violence? The short answer is drugs; or more to the point, the current pattern of drug flows into the US market and the current Mexican policy response to said pattern. To say that violence in Mexico is not fueled by the drug trade, but by an in-built, culturally-driven propensity for corruption, is disingenous and avoids dealing with a major issue. I hope we can agree on that.

    Best regards.

    PS: I left indeed an unedited bit in my last post. Sorry for that.

  11. Keith,

    Alejandro addressed most of the points I would have raised. However, I would very much like to hear you respond to the following questions:

    You described the Mexican government's war on drugs as "heroic", so I assume you view it positively.

    1) Do you believe that it will result in a long-term reduction in the supply of illicit drugs to the USA?

    2) If so, what historical precedent is your belief based on?

    3) If not, what other benefits do you feel justify continuation of a policy that has cost over 30,000 lives in the last four years?

  12. pfroehlich2004 said you described the Mexican government’s war on drugs as “heroic”, so I assume you view it positively.

    Battling people who make their living destroying other people's lives is indeed heroic. The cartels are absolutely horrible organizations and to fail to condemn them or imply moral equivalence between them and the government would be complete moral bankruptcy.

    On the general efficacy of supply control, the most up to date review of the evidence is in Drug Policy and the Public Good, of which I was a co-author. But this is not just about supply control. The U.S. could help the Mexicans by ramping up demand reduction dramatically, particularly using methods like HOPE probation which target the cartel's best customers.

    Also remember there is more at stake that supply control here, there is also the issue of helping the Mexican people get good, honest, democratic governance throughout the country. I am not qualified to judge in some grand moral equation how much that is worth, but as a factual matter the desire for a free, safe and democratic society is something tens of millions of people over the centuries have sacrificed their lives for.

  13. Keith,

    I have always been of the belief that policy should be judged on its results, not its goals (the road to hell, good intentions, etc.) President Calderon decided to use the military to suppress Mexico's drug cartels, and the results so far have been massive bloodshed, widespread insecurity for the Mexican people, and no discernible impact on the flow of drugs into the US. I would argue that the results of Mr. Calderon's policy, rather than its lofty intentions, are what should be used to determine whether this is indeed heroic or simply an act of monstrous stupidity.

    Regardless, I appreciate you answering at least one of my questions. If you have time, I would be interested in your answers to the first two:

    1) Do you believe that Calderon's drug war will lead to a long-term reduction in the supply of illicit drugs?

    2) If yes, what historical precedent provides the basis for your belief.

  14. @pfroehlich2004

    1) Do you believe that Calderon’s drug war will lead to a long-term reduction in the supply of illicit drugs?

    2) If yes, what historical precedent provides the basis for your belief.

    As I said, check out the drug policy and the public good book — the supply control literature takes time for a thoughtful person to digest, but its worth digging through (and I can't summarize it in a sentence or two)

  15. Didn't repealing prohibition dramatically reduce violence (until the next war on drugs ramped up)?

  16. Amazing thread, people (for the most part).

    What if we only looked at combatting violence? I for one don't really give a patoot about supply, other than that a) people shouldn't drive high or commit crimes for drug money, and b) we should have treatment for people who want to quit. I don't believe this idea that legalization would lead to many more addicts, not when it's soooo easy to get now. But it would be great if people stopped killing over drugs.

    Whereas, our export of money and guns and deported gang members (does anyone think that works? btw…) to violent organizations is a national shame. Just to get the price down a little here and there. No disrespect to our many wonderful law enforcement people, who deserve better from the rest of us.

  17. Alejandro

    Thank you for another thoughtful reply. I notice a slight difference in our framing that may explain why we see these issues somewhat differently. I have been mainly explaining why the cartels are so powerful, your post focuses more on why they are violent, for example you point out "To say that violence in Mexico is not fueled by the drug trade, but by an in-built, culturally-driven propensity for corruption, is disingenous and avoids dealing with a major issue." my response is that I said that the corruption makes the cartels strong, not that it necessarily make them violent. Indeed violence is often more an indicator of weakness, a change in the equilibrium — they are violent in part because they are under pressure, one or two of them are getting crushed, and their status is insecure (I would also mention the flow of high powered weapons as a factor in the violence).

    I am not disputing the important of violence as a policy problem of its own. David Kennedy has done work suggesting that certain policies can reduce the violent aspect of gangs while leaving the gangs intact, so it is meaningful from a policy point of view to treat that as a discrete, important matter for policy debate. My only point here is that you and I may be trying to explain somewhat different things. I would assume though that we share the long term goal which is not just that the cartels are non-violent, but that they disappear or are severely weakened and democratic institutions responsive to the people become stronger in their place.

    Let me turn to some of the specific issues you raise. Does the legalization of gambling reduce violence? I would suspect not, because it's not clear legal gambling reduces illegal gambling. Legal gambling has greatly increased the market of gamblers (the world series of poker has grown in size a hundred fold since it went mainstream). But this creates a large pool for people who can get addicted to gambling and those that do often want to gamble illegally, because they want to gamble all night somewhere where they can't or they want a game where they can hock their mortgage after they have burned out their legitimate credit. I don't see any evidence for a net decline in illegal gambling, even though of course a large number of people switch to gambling legally only when it is legalized — their exit is more than replaced by addicted gamblers fleeing the now huge legal gambling sector.

    Whether trade liberalization reduces violence is a good question. Seems plausible that you would reduce smuggling — do smugglers go legit? Great question, don't know the answer. Regardless of what smugglers do, the counter-point is that free trade often prodcues economic shocks and dislocations, the plant closes, wages fall suddenly etc., which can have serious health effects on communities as you know.

    Your point about opportunity cost is well taken, if the troops were not fighting the cartels they could be doing something else. No question you are right about that. This has to be balanced against another cost were the U.S. to legalize drugs — U.S. corporations flooding Mexico with cheap and legal drugs, which would impose costs of its own.

    If your numbers on the Sinaloa cartel's dominance in MJ are correct (and I say this recognizing that we all are somewhat in the dark because they don't file an annual corporate report), then it seems quite compelling to say that if the Congress legalized marijuana that cartel would be very very badly damaged. Its remains might well get absorbed or slaughtered by the other cartels. But here we have the asymmetric question of the other cartels not being hurt by the action, and perhaps even being strengthened — yes that would be a great dissertation for a graduate student so if one is reading this maybe you and I can be on his/her committee.

    I very much hope you are right that the available public sector extortion income is not very large relative to drugs. If you are, that is great. I would worry though that much of the stealing wouldn't be the sort you can deter with 200 blackwater guards, i.e., the person on the inside works actively and willingly with the cartels to divert funds into lucrative illegal activities. Parallel is how Teamsters' officials enriched themselves personally by investing their members' pension funds in mob-owned endeavors in the U.S. No one had to threaten them with violence because they were in on it.

    You are right again to point out the structural advantage the Colombian drug traffickers have in the South American drug trade, it would be very hard, maybe impossible for the Mexican cartels to compete with them. In the lands in between the two countries, there would presumably be price competition, i.e., very cheap drugs, which would impose some costs in terms of addiction and overdose– but I concede your basic argument that the cartels' income stream would probably never go beyond Cartagena.

    Best regards


  18. Keith,

    Thank for the response. This has been a very productive exchange: it has forced me to think hard about difficult questions. Let me just add some final comments:

    1. We do share a long-term goal of reducing the influence of organized crime and improving the quality and responsiveness of democratic institutions in Mexico. I believe we also share a long-range goal of reducing the harms produced by drug consumption and trade. However, I think we can also agree that, in the short-term, illegal drug trafficking from Mexico to the United States will continue to be a part of the landscape and, thus, from a Mexican perspective, the immediate policy objective should not be to stop drug flows, but to minimize their deleterious effects on Mexican society.

    2. My focus on violence is driven by a sense of urgency: over the past three years, the national murder rate has doubled (after two decades of steady decline) and drug-related homicides have jumped 500% (there is a very good piece on that question by Fernando Escalante in this months's issue of Nexos magazine: It's in Spanish, though). The current violence spiral is overwhelming the limited capabilities of many state and local governments and strechting to the limit the capacity of federal authorities. More pointedly, it is subverting public support for the campaign against organized crime. Reverting it is therefore an absolutely indispensable component of any sustainable effort at reducing the power and influence of criminal gangs. Doing so might involve a dynamic concentration strategy a la Mark Kleiman/David Kennedy, but it could also include measures to limit the size of illegal markets and thus the incentive to use violent means. Does some form of marijuana legalization fit into that picture? Maybe, maybe not: I am just saying that all options should be on the table (and yes, reducing gun availabilty would also help: any chance the US might reinstate the 1994-2004 assault weapons ban?).

    3. I think this exchange has shown that there are significant gaps in our understanding of the internal dynamics and industrial organization of drug cartels. That makes it very hard to predict the first- and second-order effects of a major shock, such as marijuana legalization. Maybe we need a more nuanced approach that takes into account organizational (not all cartels are alike) and regional differences: maybe, for instance, legalization could have significant violence reduction effects in marijuana production areas, but not in transshipment areas (such as Ciudad Juárez).

    4.There is also a need for nuance when dealing with corruption. There is great heterogeneity in levels of institutional development and responsiveness across Mexico (see this piece by Jorge Castañeda and Héctor Aguilar Camín on regional divergences, In Spanish). You can find many instances of decent, effective governance throughout the country, even at the state and municipal levels. Even in law enforcement agencies and the criminal justice system, you will find many examples of institutional transformation (e.g., the introduction of oral trials and alternative sentencing in several states). Of course, much needs to be done, but it is no longer the case that every cop in Mexico is on the lookout for a bribe (which might partially explain why so many of them have been killed over the past four years). Painting the country with too broad a brush will lead you astray in trying to understand the dynamics of the current conflict.

    Best regards.

  19. Thanks Alejandro — I will give you the last word other than to say thank you and also I read Spanish and will check out those articles



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