Narconomics. How to Run a Drug Cartel
What Big Business Taught the Drug Lords
Ebury Press 2016, 254 pages
NO…this is not a step-by-step guide to setting up your own drug cartel!
In fact, it’s quite the opposite. Tom Wainwright, a writer for The Economist, has analyzed the way drug cartels function from an economist’s point of view. Many of the strategies used in this extremely violent and profitable business are the same as those of any large company.
He starts off with the coca farmers, barely eking out a living at the lowest end of cocaine’s supply chain, and points out the similarities between the cartels and Walmart, both of which are able to dictate prices to the suppliers. This means that no matter how many coca farms are destroyed, the ones who suffer are the farmers. Retail prices are not affected enough to put off consumers, even with mark-ups of up to 30,000 percent from the price of coca to the final retail price of cocaine.
Human resource problems cause just as many headaches for cartels as they do for large companies. Incompetent employees bungle up their jobs here too, often with disastrous results. And, as crazy as it sounds, cartels take PR and advertising just as seriously as any other firm, sometimes providing community services such as building churches, roller-skating rinks, or housing for the poor, in areas where the government has failed to do so. There is also PR in the form of using violence in order to discredit rival cartels.
Cartels take advantage of off-shoring opportunities and use a sort of franchising system similar to that of McDonald’s. The ‘legal highs’ industry, which boomed for some time in New Zealand, is described, and the author explains why customer service is just as important when shopping online for drugs as it is for any other product. He also travelled to Colorado to research the legal marijuana business and analyzes how legalization affects the cartels.
In the conclusion “Why economists make the best police officers”, there is a roll your eyes/bang your head against the wall description of an incredible “success” in the “war on drugs” – a billion dollar bust made without ever having to leave the office.
I’m quite sure this should be required reading for drug enforcement agencies in every single country.
Quote from the first page:
Crooks already know these tricks. Honest men must learn them in self-defense.
(How to Lie with Statistics, Darrell Huff)