Narconomics How to run a drug cartel

Tom Wainwright, 1982-

Book - 2016

"How does a budding cartel boss succeed (and survive) in the $300 billion illegal drug business? By learning from the best, of course. From creating brand value to fine-tuning customer service, the folks running cartels have been attentive students of the strategy and tactics used by corporations such as Walmart, McDonald's, and Coca-Cola. And what can government learn to combat this scourge? By analyzing the cartels as companies, law enforcers might better understand how they work ... [and have more success in efforts] to win the war against this global, highly organized business"--Amazon.com.

Saved in:

2nd Floor Show me where

364.13365/Wainwright
1 / 1 copies available
Location Call Number   Status
2nd Floor 364.13365/Wainwright Checked In
Subjects
Published
New York : PublicAffairs [2016]
Language
English
Main Author
Tom Wainwright, 1982- (author)
Edition
First edition
Physical Description
vii, 278 pages : illustrations, map ; 25 cm
Bibliography
Includes bibliographical references and index.
ISBN
9781610395830
  • Introduction
  • Chapter 1. Cocaine's Supply Chain: The Cockroach Effect and the 30,000 Percent Markup
  • Chapter 2. Competition vs. Collusion: Why Merger Is Sometimes Better Than Murder
  • Chapter 3. The People Problems of a Drug Cartel: When James Bond Meets Mr. Bean
  • Chapter 4. PR and the Mad Men of Sinaloa: Why Cartels Care About Corporate Social Responsibility
  • Chapter 5. Offshoring: The Perks of Doing Business on the Mosquito Coast
  • Chapter 6. The Promise and Perils of Franchising: How the Mob Has Borrowed from McDonald's
  • Chapter 7. Innovating Ahead of the Law: Research and Development in the "Legal Highs" Industry
  • Chapter 8. Ordering a Line Online: How Internet Shopping Has Improved Drug Dealers' Customer Service
  • Chapter 9. Diversifying into New Markets: From Drug Smuggling to People Smuggling
  • Chapter 10. Coming Full Circle: How Legalization Threatens the Drug Lords
  • Conclusion: Why Economists Make the Best Police Officers
  • Acknowledgments
  • Notes
  • Index
Review by New York Times Review

IN JANUARY, AT least nine people were shot to death in Mexico's Guerrero state during a traditional coming-out party for a 15-year-old girl. Many victims of drug-related violence in Mexico ceased a long time ago to have any apparent connection with the trade. In 2014, members of a drug cartel along with local police abducted and presumably killed 43 student teachers for no discernible reason other than they were preparing to demonstrate against the lamentable state of education in their region. According to a PBS documentary broadcast last year, the number of homicides in Mexico stood at more than 164,000, between 2007 and 2014. The combined figure for civilian deaths in Afghanistan and Iraq over the same period was 103,000. In the last decade, Mexico has been the most dramatic theater in a crisis that engulfs countries as far apart as Jamaica and Brazil. The Rio-based research institute Igarapé (on whose international advisory board I sit) has found that half of Brazil's more than 50,000 annual homicides are directly related to the drug industry. Brazil is one of the locations chosen by the British journalist Ioan Grillo for his second book, "Gangster Warlords," in order to impose a narrative on the causes, course and likely future of this inferno that scalds and asphyxiates so much of the Caribbean and Central and South America; the other regions he includes are Mexico (where Grillo is based), Jamaica and the "Northern Triangle" of Honduras, El Salvador and Guatemala. If it were anything other than drugs driving the violence, these conflicts would long ago have been designated civil wars. Grillo quotes Robert Bunker, a researcher for the United States Army War College: "We have this blurring of crime and war. And it doesn't fit either nice model for us. . . . And this is why it's driving everybody bananas. It doesn't fit how the world is supposed to be. So our thinking has not caught up, and our institutions and laws have not caught up." Drugs are not the only cause of this epidemic of killing. Extreme poverty, gross wealth inequality, weak states and corruption, along with a hierarchical culture of machismo, all play a role. But the overwhelming motivation for the butchery is narcotics - or, to be precise, the fabulous profits associated with selling a prohibited commodity for which demand is off the scale, especially in the United States and Europe. For those who believe the violence is the product of some intrinsic aspect of South American culture, the Brazilian case is instructive. In 1982, the homicide rate in Rio de Janeiro was on a par with New York City's, at 23 per 100,000 inhabitants. Seven years later, while New York's had shown a modest rise, Rio's had jumped to 63 per 100,000 inhabitants, a threefold increase that prefaced an even greater blood bath in the 1990s. During those seven years, Brazil had become the central transit country for cocaine heading across the Atlantic to Europe. The Colombian cocaine cartels were desperate to find new sales for their product once the North American market had reached a saturation point in the early 1980s. By the mid-1980s, the astonishing profits accrued from the prohibited commodity enabled the relatively benign criminal gangs that had always existed in Rio's slums, or favelas, to equip themselves with frighteningly potent weapons. These were enough first to challenge and then to outgun Rio's police. Grillo charts the fascinating rise of Rio's oldest and most powerful drug gang, the Comando Vermelho, or the Red Commando. In the 1970s, common criminals from the city's favelas were locked up during the military dictatorship in the Cândido Mendes prison on Ilha Grande, which lies an hour's boat ride from the coast west of Rio. Here they mingled with the guerrillas who had taken up arms against the generals, learning the strategic value of planning, organization and solidarity. Grillo tells the story of William da Silva Lima, a former bank robber known now as "the Teacher," who escaped from Ilha Grande in 1980 and returned to his favela, taking "the Red Commando from the cellblock to the ghetto." The Red Commando used revolutionary terms to describe its activities: Robberies became "expropriations," and a gang became a "liberation group." Once cocaine entered the equation, the Brazilian state was confronted by one of its most formidable opponents in history. AS GRILLO UNFOLDS the complex and often gruesome stories of the drug trade, it becomes clear that this terror is comprehensible. It is the result of ossified policies - chief among them the so-called War on Drugs - that are wholly inappropriate for a globalized world. Grillo and his compatriot, Tom Wainwright, an editor at The Economist and the author of "Narconomics: How to Run a Drug Cartel," belong to a growing band of writers who seek out the testimony of criminals in order to better understand the rational calculation that often underpins the violence. The economic weight of transnational organized crime - not to mention its devastating political and social impact - is so considerable that without this testimony, we simply cannot grasp what is going on. It is an exhausting and often nerve-racking job, but Grillo in particular scores some spectacular successes, notably his long conversation with a gunman for one of Kingston's most notorious or (depending on your point of view) celebrated drug lords, the appropriately named Christopher Coke, more commonly known in Jamaica as Dudus. Grillo's descriptions of a "don system that trains and directs assassins" evoke the wild world of the film "The Harder They Come," the story of a well-meaning country boy who slides into a life of violence. But I wouldn't underestimate Wainwright's contribution. His writing is less passionate than Grillo's, but he brings a fine and balanced analytical mind to some very good research, undertaken largely in northern Mexico. By looking at the drug trade as a business, Wainwright is able to reveal much about why it wreaks such havoc in Central and South America. The issue of violence is not a random by-product of gangster culture. It is central to the industry, Wainwright observes, as the only way "to enforce contractual agreements." To control or police a market like drugs, from which the state has consciously absented itself except through law enforcement, the cartel must be able to wield decisive violence or, at the very least, be able to project a credible threat of violence. Occasionally, Wainwright has to shoehorn his interpretation to fit the conceit: To describe the police as a drug cartel's "regulator," for instance, misconstrues the role of law enforcement in a weak state, where it frequently acts as a competitor or, indeed, an accomplice. But he also makes an important and too often unnoticed link between marijuana legalization in states like Colorado and Washington and what could be a profound policy shift across the Western world. As long as the production of drugs - and the accompanying violence - took place far away in Colombia or Afghanistan, the impact on social stability in North America and Europe was negligible. Now much production of marijuana and, critically, synthetic drugs like MDMA takes place in cannabis grow-ops and labs next door. In the age of austerity, strapped police forces do not have the resources to keep up with this. "Attacking supply networks is ineffective," Wainwright notes. "America has forgone Colombian-style crop eradication programs in favor of legalization." Americans would do well to read both these books. The move toward drug law reform may not be unstoppable, but it is certainly tilting in the direction of a more rational policy. Grillo and Wainwright show how drug violence is not so much senseless but the devastating result of economic calculations taken to their brutal extreme. Wainwright's conclusion is titled "Why Economists Make the Best Police Officers." It is one of the pithiest and most persuasive arguments for drug law reform I have ever read. MISHA GLENNY writes on crime, security and politics. His most recent book is "Nemesis: One Man and the Battle for Rio."

Copyright (c) The New York Times Company [February 7, 2016]
Review by Library Journal Review

Don't let the provocative title fool you: Wainwright (Britain editor, The Economist) earnestly compares the economics of drug cartels to those of legitimate businesses and analyzes the effectiveness of current strategies in the "war on drugs," ultimately concluding that too much time and money have been spent attempting to make prohibition work when the evidence clearly shows that it does not, and that legalization works better. The author's almost algorithmic structure and seamless execution come from the balanced and detached perspective of the economist in possession of all the raw data he needs. Wainwright pulls no punches in his conclusion, critical though it may be of institutions such as the UN. He may convince even the staunchest prohibitionist of the sobriety-if not the outright economic sense-of more pragmatic, evidence-based approaches to tackling the drug marketplace. People who enjoy solving problems with creativity and flexibility will cheer as Wainwright exposes why the "war on drugs" has failed and shows how it can be fought better. VERDICT Readers interested in the intersection of crime, economics, entrepreneurship, and law enforcement will find this work fascinating.-Ricardo Laskaris, York Univ. Lib., Toronto © Copyright 2016. Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.

(c) Copyright Library Journals LLC, a wholly owned subsidiary of Media Source, Inc. No redistribution permitted.
Review by Kirkus Book Review

In his first book, seasoned journalist Wainwright asks a radical question: what if we stopped looking at drug cartels as armies of faceless gangsters and instead analyzed them as innovative global businesses? Like many journalists, Wainwright is critical of the war on drugs and its ineffective tactics. But during his tenure as a correspondent in Mexico City for the Economist, the author observed that high-level drug dealers are successful often because they understand effective management strategies. The full-body tattoos of the Salvadoran maras encourage loyalty among gang members, who are essentially lifelong employees. Mergers between Mexican gangs help expand international trade, while rival gangs spark competitive innovation. Wainwright suggests that the cocaine trade is eerily similar to the business approach of Wal-Mart, which holds a "monopsony" over its suppliers. The most astonishing chapter covers Internet commerce in the "deep web," where pills and stolen credit card numbers are effortlessly exchanged. Using a bogus account, Wainwright discovered that anonymous participants employ a rating system to assess buyers and sellers, just like eBay, keeping customer service at high levels. "Even when I send a deliberately annoying message to a meth-pipe dealer called vicious86,' asking if he does custom engraving of his pipes for gift orders, he sends a nice reply regretting that he can't but wishing me luck in finding someone who will," writes the author. Wainwright has a good sense of humor, and he describes himself as a "not very brave business journalist," yet his book is courageous on several levels. He not only ventured into brutal prisons and Andean coca fields, but he also approached illicit drugs from a thoughtful new direction. In order to combat the cartels, governments must work together and evaluate the cost-benefit of their social policies as well as the prices of firearms and flak jackets. In a way, Wainwright challenges everyone at oncethe dealers, the drug czars, and the bystanders in between. A daring work of investigative journalism and a well-reasoned argument for smarter drug policies. Copyright Kirkus Reviews, used with permission.

Copyright (c) Kirkus Reviews, used with permission.