09-12-2011, 11:50 PM
Friday, 09 December 2011
Six Lessons from Mexico's War on Drugs
One thing is a certainty: when the global economy tanks, black/grey markets and smuggling networks will zooom. This new commercial layer will suddenly be everywhere and you will interact with it constantly. NOTE: this contact less so if you are a) one of the lucky ones in the emerging global ne0-feudal financial aristocracy or b) in a networked resilient community. On that note, here's some unusual insight from Melissa Dell, a doctoral student in (Forensic) Economics at MIT. She has written an excellent paper on Mexico's war on drugs. Here are her insights into the business dynamics of the Mexican Drug War:
Mica said...
I've been trying to tie together the various accusations coming out of the Fast and Furious scandal too. The main question being what are the ties between the Sinaloa cartel and the US/Mexican governments?http://mrgnc.blogspot.com/2011/12/zetas-...s-and.html
Six Lessons from Mexico's War on Drugs
One thing is a certainty: when the global economy tanks, black/grey markets and smuggling networks will zooom. This new commercial layer will suddenly be everywhere and you will interact with it constantly. NOTE: this contact less so if you are a) one of the lucky ones in the emerging global ne0-feudal financial aristocracy or b) in a networked resilient community. On that note, here's some unusual insight from Melissa Dell, a doctoral student in (Forensic) Economics at MIT. She has written an excellent paper on Mexico's war on drugs. Here are her insights into the business dynamics of the Mexican Drug War:
- Black markets/smuggling networks make decisions like businesses in aggregate. They hire, fire, compete, partner, and optimize. The rules can be a bit different though (as you will see below).
- There will be a diverse mix of local and national organizations. 49% of Mexico's 320 drug producing municipalities were controlled by major organizations. 51% by local gangs. Local gangs ally with major organizations for transhipment of product to the United States. Most of the rest of the municipalities (90%) are either on a smuggling route or a market.
- There will be lots of national/regional smuggling/criminal organizations and they won't be monolithic. For example, in 2011, Mexico had 16 major trafficking groups. This level of fluidity and diversity is the result of decentralized decision making. Local gangs make many of their own decisions in order to compartmentalize failure. However, this works against organizational integrity at the national/regional level since autonomous local gangs can switch affiliations easier.
- The election of "law and order" politicians/parties at the local level increases violence. Here's why: Law and order politicians increase police activity. Increased police pressure weakens the gang currently in control of a municipality. It usually doesn't destroy the gang in charge (unless the police themselves become an informal militia that replaces the local gang's economic role). A weak local gang is often attacked by new rival gangs intent on taking over the municipality. This means: gun fights/battles, lots of bodies, collatoral damage, kidnappings, etc..
- Spillovers: If a smuggling route can't traverse a town due to a crackdown or congestion (too much drug traffic), it will reroute to an optimized alternative.
The optimal path within a complicated road network isn't obvious without analysis. Melissa found that Dijkstra's algorithmworks well as a way of predicting the new route. What this may mean to you? Crackdowns in other municipalities may cause your municipality/town to suddenly become a node in a smuggling network. Spillovers are an important dynamic worth studying (see the inset picture for a simplified example of it -- the PAN victory is a "law and order" disruption to a route).
- General effects. When a town becomes a node on a smuggling route, informal sector wages fall 2.5% due to the ability of smugglers to extract protection money (primarily from poor people). It also leads to a fall female workforce participation (fear).
Posted by John Robb on Friday, 09 December 2011 at 10:46 AM | Permalink
Comments
Karl said...
If you remove the American attitude toward cannabis (illegality; criminality) and look at it instead as production and movement of things that humans WANT, it's a lot easier to understand.
Analyze it from the perspective of people wanting to get something that someone won't let them have.
And not from the perspective of "that's ILLEGAL! look at those CRIMINALS!"
Tainting black/grey market analysis with law-and-order perspectives is a disservice to those trying to manage the transition to and survival within our collapse.
What is "illegal" in the Mainstream Economy is not the same as what is unacceptable in the black/grey market economy. The rules are purer and relate more to what people want. It's not a managed economy.
Karl said...
If you remove the American attitude toward cannabis (illegality; criminality) and look at it instead as production and movement of things that humans WANT, it's a lot easier to understand.
Analyze it from the perspective of people wanting to get something that someone won't let them have.
And not from the perspective of "that's ILLEGAL! look at those CRIMINALS!"
Tainting black/grey market analysis with law-and-order perspectives is a disservice to those trying to manage the transition to and survival within our collapse.
What is "illegal" in the Mainstream Economy is not the same as what is unacceptable in the black/grey market economy. The rules are purer and relate more to what people want. It's not a managed economy.
Dusty Sensiba said in reply to Karl...
One problem--you're advocating empirical analysis or some other logical or scientific approach to problem solving. Politicians don't work that way.
Politicians and their minions/handlers are experts at stirring up emotions in others to manipulate them into giving them what they want. Using things like logic or science gets in the way of their sociopathic, narcissistic goals.
ReplyFriday, 09 December 2011 at 03:06 PM
One problem--you're advocating empirical analysis or some other logical or scientific approach to problem solving. Politicians don't work that way.
Politicians and their minions/handlers are experts at stirring up emotions in others to manipulate them into giving them what they want. Using things like logic or science gets in the way of their sociopathic, narcissistic goals.
ReplyFriday, 09 December 2011 at 03:06 PM
Scott Supak said in reply to Dusty Sensiba...
This is, of course, more true of one class of politician than the other. (See: evolution, teaching of; climate change; et al)
ReplyFriday, 09 December 2011 at 03:45 PM
This is, of course, more true of one class of politician than the other. (See: evolution, teaching of; climate change; et al)
ReplyFriday, 09 December 2011 at 03:45 PM
Scott Supak said...
I read recently that the big drop in violent crime in the US was directly attributable to the huge drop in the price of cocaine. As the price dropped, the low level dealers who make minimum wage and engage in most of the violence couldn't make a big enough profit, and have dropped out of the game.
http://www.theatlanticcities.com/jobs-an...crime/474/
With this in mind, as the police are increasingly unable to enforce the stupid classification of pot as a schedule one drug, there will be an increased supply, and a big drop in price, which will remove the profit that a lot of these gangs depend on. Resilient communities will just grow their own, demand for imports will drop, the price will drop, and the war will end.
I read recently that the big drop in violent crime in the US was directly attributable to the huge drop in the price of cocaine. As the price dropped, the low level dealers who make minimum wage and engage in most of the violence couldn't make a big enough profit, and have dropped out of the game.
http://www.theatlanticcities.com/jobs-an...crime/474/
With this in mind, as the police are increasingly unable to enforce the stupid classification of pot as a schedule one drug, there will be an increased supply, and a big drop in price, which will remove the profit that a lot of these gangs depend on. Resilient communities will just grow their own, demand for imports will drop, the price will drop, and the war will end.
Mica said...
I've been trying to tie together the various accusations coming out of the Fast and Furious scandal too. The main question being what are the ties between the Sinaloa cartel and the US/Mexican governments?http://mrgnc.blogspot.com/2011/12/zetas-...s-and.html
"Where is the intersection between the world's deep hunger and your deep gladness?"