A specialist in one field trying to apply their knowledge to another domain is often a hit or miss exercise. In this case, longtime Economist Mexico City bureau chief Tom Wainwright looks at the drug industry not as a moral crusade but an efficient, if bloody, market. The product is an uneven but often very insightful take on a topic that few, particularly the US Federales, approach with the dispassion necessary to really understand what’s driving the profits and body counts.
Narconomics features a good number of “huh, that’s pretty interesting” paragraphs and every twenty minutes or so a “wow that’s really interesting” moment. The first few chapters, on how cocaine gets marked up through the supply chain (hint: the big leap is when it gets into the US, which is why burning coca is so pointless), why cartels decide to merger, and the “corporate social responsibility” efforts are among its best.
My favorite chapter was on cartel HR, “When James Bond Meets Mr. Bean.” A few things make it hard for the average cartel to staff up. First, you can’t just run ads on LinkedIn. Second, you need to be able to trust your people. And third, the nature of the work isn’t exactly attracting the best and the brightest. So you often have to endure crappy employees and pay them above market wage to make sure they stick with your crew.
The best detail of the book had to do with the HR impact of gang tattoos. Despite how their employees’ stealth game falls off, cartels benefit from their employees getting massive gang tattoos. For starters, it’s hard to get a job at a mall with a giant face tattoo. Also, it’s harder for gangsters to defect to another gang, a common practice in Mexico where tattoos aren’t as much of a thing as in Central America. With these physical barriers to exit (think reverse occupational licencing?), gangs can then pay their goons less. Consequently, tattoo removal is one of the more cost-effective interventions the state can take as it allows gang members a better chance at getting out of the game.
In another counter-intuitive HR twist, prisons function as criminal MBA programs. It’s much easier to recruit from a pool of convicted criminals than walking down the street handing out cards. Further, Getting the “connect” (see the Wire season 2 when Stringer trades the towers for Prop Joe’s dope connection with the Greeks) is a really tricky part of the puzzle, and prisons function as a great place for likemindeds to come together. For instance, Carlos Ledher, of Narcos fame, was ready to go clean before meeting in a federal prison in of all places Danbury, Connectitut partners who would help him hook America on cocaine.
The book features a few more strong tidbits:
- Some online dealers on Silk Road successors market their cocaine as “fair trade” and “conflict-free.”
- Gangs that tint their meth with a little blue food coloring ala Walter White can command a premium for their product.
- Cell phones have made territory less important as the dealers can now come to you. Some argue this was a big driver in the decline of violence in 1990’s New York.
- Driving is crazy in Mexico City but cars are super courteous and spaced out in Juarez. Why? If there’s a drive by you’re less likely to get killed by accident. Also, the streets vacate at 5:30pm because gangs want to make hits then to lead the 6pm news.
- Franchising can have its drawbacks. Sure, you can license your name out to some local hoods so that their extortion efforts sound scarier. But when some scrub calling himself a Zeta goes and kills a DEA agent, you gotta pay the price.
- No country smokes more weed per capita than New Zealand, or sells more of those creepy fake drugs from head shops. One reason is thatit’s really expensive to get other drugs over there.
- Due to the rise of prescription opiates as a gateway, the average age of first-time heroin users has gone up from 16 to 24, and the drug is now 90% white up from only 50% in the 70s.
- Spending more on making prisons nicer and safer means that criminals may feel less need to band with gangs who can provide protection and smuggled perks.
Narconomics trips over itself at times. Wainwright’s attempts at “oh I’m walking around Juarez and it’s scary” journalism are pretty weak — he gets his best personal details from fixers telling him stuff. The last few chapters, particularly his take on legalization, are the least interesting, probably because it doesn’t take an economics specialist to deduce their market consequences. But all and all it’s a breezy and differentiated romp through a subject that needs a breath of fresh policy thinking. The first hundred pages (or five hours in audible time) in particular are worth a read.