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Comment by tomrod | Hacker News Reader

Diseconomies of scale and scope can prevent action in each of these industries, in a static analysis. It may prove to be more profitable to focus on a single industry (e.g. marijuana) than seeking at the present moment to dominate or even enter other industries (e.g. opiods) until market conditions change.

As things evolve, they may naturally enter other industries. Heck, even become legitimate.

EDIT: Fixed second paragraph.

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Sure, but I'd expect that there's some agent already in those niches and that agent would have experience new agents would lack. Then, uh, non-linear returns to expertise at violence do complicate the issue in ways I can't predict but the empirical observation that violence has gone down would tend to support the the observation that profits have done down and argue against the idea that marijuana cartels are now violently displacing heroin cartels.

One complicating factor is that the cartel can't use the traditional monetary system (as I understand it), thus allowing a quick pivot of assets (as they pull their money out from under their mattresses). Hence, if they _do_ decide to enter an industry, then can enter quickly, pay high wages, get a foothold, then undercut the existing market. Much like Google, Apple, and other tech companies with massively large cash piles they sit on.

Organized crime has typically been highly diversified, and it seems odd that the most successful organized criminal organizations would ignore those opportunities. Typically so-called vice crimes such as illegal prostitution and gambling are the base of the pyramid, with protection rackets, violence for hire, and whichever dugs are in demand. Human smuggling is another source of income, although I don’t know much about those practices in the Americas.

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