“Narconomics: How to Run a Drug Cartel” by Tom Wainwright

Narconomics

I was at the Munich airport and had time to kill. I went to the bookstore and my eyes fell on a book with an intriguing name. I went ahead and bought it. And sure, I got my money’s worth.

I was startled to learn that this is the author’s first book. He sure writes like a pro. And he’s chosen a mind-blowing topic. I’ve read many books written by journalists, but this one’s the best of all. It’s a lesson in economics, sociology, crime and the dark side of human life.

We learn that the world’s taxpayers spend $100 billion a year combating the illegal drugs trade. “There is an overwhelming focus on suppressing the supply side of the business, when basic economics suggests that addressing demand would make more sense.”

The global narcotics industry has annual revenues amounting to about $300 billion and serves a quarter of a billion consumers. It closely resembles a professionally run multinational corporation. “Colombian cocaine manufacturers have protected their profits by tightening control of their supply chains, along the same lines as Walmart. Mexican cartels have expanded on a franchise basis, with the same success as Macdonald’s.”

Monopsony means ‘single buyer.’ While a monopolist can dictate prices to its consumers as it’s the only seller, a monopsonist can dictate prices to its suppliers, because it’s the only buyer. Drug cartels keep the price of coca stable by putting pressure on the suppliers who in turn squeeze the growers. So any production loss or destruction of crop affects only the farmers – those at the very bottom of the supply chain. On the international market the price of cocaine has remained steady for over two decades. So has the number of cocaine users.

“Prison is fabulously expensive. Sending a teenager to jail costs more than it would to send hint to Eton College, the private boarding school in England that educated Princes William and Harry.” For criminal organizations, prisons pay a pivotal role in the recruitment and training of staff. The La Nuestra Familia (our family), a California based prison gang was founded in the 1960s by prison inmates looking to protect themselves from another gang, the Mexican Mafia. The Aryan Brotherhood is another American prison gang. (Gosh, there’s a whole world out there that we’re clueless about!)

“Buy cocaine in Europe or the United States and it’s an uncomfortable certainty that you have helped to pay for someone to be tortured to death…” Drug cartels often seek publicity for their gruesome murders. The author was told that the worst time to step out in Ciudad Juarez (in the Mexican state of Chihuahua) is 5-45 p.m. because that’s when the gangs carry out their executions in time to lead the 6 p.m. news broadcast.

There’s a whole lot of interesting information:

  • In the early 1970s, Stanford University students used Arpanet (a precursor of the internet) for the first time to arrange a deal with the students of MIT. The subject of the transaction was a bag of marijuana. Today, on the ‘dark web’ of the internet drugs and weapons are anonymously bought with bitcoins, and contract killings are said to be on sale. A recent Global Drug Survey revealed that in the UK 22% of illegal drugs are purchased online.
  • Many hotels in La Paz, Bolivia serve coca tea to guest on arrival.
  • The UN estimates that the average coca grower in Columbia earns $2 a day.
  • Brazil is the world’s second biggest market for cocaine after the United States.
  • Spain is the main gateway to Europe for Latin American drugs.
  • New Zealand shuts down more crystal-meth labs each year than any country in the world apart from the United States and Ukraine.
  • “For criminals looking for an offshore base in the Americas, Guatemala has a lot to offer. But it faces stiff competition from its southern neighbour, Honduras.”
  • Guatemala’s president Otto Perez Molina, stated that, “Today more people are dying in Central America through drug trafficking, and the violence it generates, than are dying in the United States through the consumption of drugs.”

The book talks of the franchising of criminal brands, the manufacture of ‘designer drugs’, the emergence of “Frankenstein drugs’, and lots more. In short, it’s one deadly cocktail.

Overall Assessment: Absolutely brilliant.

Narconomics: How to Run a Drug Cartel
AUTHOR: Tom Wainwright
PUBLISHER: Ebury Press
YEAR OF PUBLICATION: 2016

Contributor: Pushpa Kurup lives in Trivandrum, India and works in the IT sector.

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