How a Mexican Drug Cartel Makes Its Billions | Hacker News Reader

How a Mexican Drug Cartel Makes Its Billions

nytimes.com

452 pointsjlees232 comments

The only way to stop these large criminal enterprises is to legalize the stuff. Just like alcohol prohibition created some of the most notorious American criminals, South American drug prohibitions produce powerful criminals down there. There isn't any large crime related to South American cocoa or coffee imports. Legalize it and then spend money and make laws regulating consumption, it would greatly reduce the misery in our corner of the world.

At this point, I doubt it will help. Why? The cartels thrive in countries where you can essentially buy off any official.

When you legalize drugs, they aren't going to suddenly stop selling it. They will now have a legal business which will continue to fund their criminal empires. We most likely will see an increase in other crimes, like extortion and kidnapping.

Drugs are still illegal in the US and we don't really see the same kind of crime in our country because the police actually (for the most part) do their job.

If you really want to stop the violence, stop the corruption. I know the recreational drug users of HN don't really want to hear this..

People who have lived in big cities in the U.S. would strongly disagree with you. There are entire areas that are dangerous to walk in thanks to drug gangs. Legalize the stuff and dealers can't continue forcing out the competition with guns, since that competition will be the local supermarket.

Alcohol is already legal, so why gangs are not gone?

:-)

It looks like you're being downvoted, so I'll provide a reason.

Alcohol is legal. The gangs that formed around producing, smuggling, and selling alcohol (e.g. Capone) are gone.

The hope is that once other drugs are legal, the same thing happens to their producers.

So if everything illegal will be legal, like in America before USA, then all gangs will gone?

Of note, since I was curious as to the answer myself and just found out, there are still 'gangs' (though less the urban variety we're used to seeing) based around moonshining.

That prompted me to ask "why is moonshining illegal", and the best (wrong) answer I could come up with was for production and delivery to dry counties.

Turns out, it's just a matter of taxation. Moonshiners are welcome to go legit, but they then have to pay $2.14 for each 750ml bottle they make, which cuts into profitability.

As they likely don't have reputations and/or massive marketing budgets, they still and distribute illegally, which turns it into a pure profit + overhead scenario.

That's an interesting point that I've never considered (or heard mentioned in the legalize argument). I'm for legalization + taxation of all drugs but will we still see significant folks producing and selling illegally as a tax dodge? May legalization merely get drugs into more hands but still maintain significant illegal production? If so, a lot of the supposed benefits of legalization dry up.

The ratio of moonshine to legit alcohol sold is tiny though.

It depends on what the markup is. You can't have taxes that equal current costs. If that was the case the market would largely stay the same.

The market for moonshine is niche at best :

"The number of jurisdictions which ban the sale of alcoholic beverages is steadily decreasing which means that many of the former consumers of moonshine are much nearer to a legal alcohol sales outlet than was formerly the case. Moonshine-like distilled beverages with names like Collier and McKeel White Dog,[27] Everclear, Virginia Lightning, Georgia Moon Corn Whiskey, Ole Smoky Tennessee Moonshine,[28] Platte Valley Corn Whiskey Cat Daddy and Junior Johnson's Midnight Moon are produced commercially and sold in liquor stores, typically packaged in a clay jug or glass Mason jar. As a result of these changes and aggressive law enforcement, moonshine production is far less widespread than it was formerly." [1]

[1]http://en.wikipedia.org/wiki/Moonshine_by_country

Yes, here in the UK cigarettes are legal but smuggled cigarettes are a massive (£multi-billion) business because taxes are so high.

Obviously there is a point at which taxation is virtually equivalent to prohibition (1,000,000%?) so the aim of a good tax in this arena is to (1) discourage consumption (2) provide some revenue to offset against social costs of the activity (healthcare costs of smokers, for example) while (3) not being so outrageous as to push the activity underground altogether.

There's still a small safety element. Sometime moonshiners produce toxic alcohol, or they contaminate their product with things that are toxic.

I agree that the main element is taxation.

Very many cigarettes sold in England are smuggled in from EU because of tax. But now people are counterfeiting so some cigs are both smuggled and fake - the quality of some of the smuggled product is alarmingly poor. (But it's tricky to get any sensible information about this because the only people releasing information are the customs / police who want to make it seem as scary as they can.)

And the cigarettes sold in EU are smuggled from Ukraine :-D - at least they're the real deal, even though they're like 5 times cheaper there...

"I know the recreational drug users of HN don't really want to hear this"

They are of course part of the problem.

Legalizing drugs means that the street price will drop by 90% and that will eventually make drug trafficking obsolete.

This of course doesn't solve the real problem which is consumption.

Meth is very cheap already. Any changes?

From what I understand meth is produced really poorly by regional producers.

I think it would end up more expensive at your local pharmacy if legalized. The benefit would be you know you won't lose your teeth from the odd chemicals the producer is using.

(I could be horribly off on the details)

You are horribly off.

Methamphetamine is currently available at your local pharmacy. It's a generic drugs and costs less than a $1 per dose.

You don't lose your teeth from meth because of chemicals used in it's production, you lose them due to a combination of poor oral hygiene and reduced saliva production. The same thing happens if you abuse the stuff you can get at the pharmacy.

No because Meth can't create huge profits for drug cartels. Street price is too low when compared to heavy drugs. And it's the money that makes cartels invincible.

> This of course doesn't solve the real problem which is consumption.

I object to your use of the definite article here. We can argue about the degree to which consumption is a problem vs. it leading to problems, moderate use, what particular drugs, etc... but making the police into the enemy of a large swath of our population is itself a real problem, gang violence to control distribution territory is itself a real problem, etc.

If people are doing things that hurt themselves that's bad, but it's important we don't cause worse problems (for those people or the rest of us) in trying to stop it, and legalization frees up huge resources that we could put toward educating people about the dangers of various drugs and cleaning up the mess when they don't listen.

Street price doesn't even need to drop: it is safer for customers to buy it at the local drug store (legal, pure drug) than on the street (unknown quality).

It might be safer but I'm not sure it's preferable. You see the local drug store owner knows you and there's still a stigma for drug consumption. Your local dealer on the other hand doesn't know you and you don't risk been exposed or stigmatized buying from him.

If on the contrary you take the huge profits part out of the equation then the whole network collapses; there just aren't enough money to support all the individuals involved in trafficking.

Re. your first paragraph, here is a counter-example: go to another town where they don't know you, purely to obtain your coke; problem solved.

Besides, haven't you heard the saying: "Always know your dealer"?

Why is consumption the real problem?

Even if so, moving to a harm reduction / medical model is more likely to fix the addiction problem than criminalizing (or worse, militarizing) the consumption side of the equation.

When the US legalized alcohol its use doubled, but alcohol abuse only went up around 15%. That is, people who will only use a substance if its legal will tend to use it responsibly. I expect that if we legalized other intoxicants they'd mostly displace alcohol, which would actually be a public health win for many currently illegal drugs. For the others, I expect that having the FDA ensuring a pure supply would be enough to make it a net good idea, even if its one with disadvantages.

Corruption is a tradeoff. Is the risk to lose your safe job and possibly land in jail worth the money? So you need money to corrupt officials on a large scale, a lot of money.

Obviously that kind of money is no problem if your profit margin is 80%. Legalizing drugs (hence introducing highly industrialized competition) and helping those who are truly addicted tends to quickly kill that margin.

I'm not saying legalization is the golden bullet; obviously you will have to do a lot more to reverse the damage done by millions in prison, impoverished, killed, or corrupted in the government apparatus. But its the starting point to stopping the cancer from expanding.

>Drugs are still illegal in the US and we don't really see >the same kind of crime in our country because the police >actually (for the most part) do their job.

I strongly disagree with your statement. Police? Mexico is not using your usual police officers to fight drug violence neither Colombia. They are using highly trained military forces. Why? Cartels have very advance military equipment that is, sometimes, even purchased directly from the U.S. government as stated by one of the captured Zetas cartel heads (http://www.washingtontimes.com/news/2011/jul/7/inquiry-of-we...). One of the main reasons the U.S. doesn't have the amount drug related crimes that countries like Mexico do is because it's their primary market (in the case of Mexican cartels) so they, obviously, don't want to create that much problems there and mess up their business.

This is not about pointing fingers or saying that the police is useless but as someone who was unlucky enough to witness hitman executed individuals (in front of my house) but lucky enough to _not see anything_ useful for the police I have to tell you that is not about an effective police force. The production, distribution, violence, money laundering, and all the other problems that revolve around drugs are shared between: consumers, criminals, and corrupt individuals (private, government, and public service sectors). My point is that this very complicated problem has only gotten worse since the "War on Drugs" started so legalizing drugs to have some regulation could be an alternative.

"Police? Mexico is not using your usual police officers to fight drug violence neither Colombia. They are using highly trained military forces. Why? Cartels have very advance military equipment"

If you read the article, you'd see the reason Colombia and Mexico use the military is mainly because the cartels own the police. Virtually ever person has been bribed. That's the core problem here.

...and if US users can grow their own, legally, in their backyards, then that bribery money goes away.

America has more drug driven crime than anywhere else on earth, by far. The source of the destruction (crime + violence) of our inner cities is purely drug based. Before the drug revolution of the 1960s and 1970s, our inner cities were livable.

A quick examination of the FBI's data on African-American crime proves that out. We put four million black men in prison every decade due to drug related criminal activity, and have nearly two million black men in prison at any given time. The lifestyle of said criminals is always tied to illegal drugs (there's no other profit source powerful enough to drive that kind of crime wave).

Cartels wouldn't have a business selling something like marijuana post-legalization. Just about anybody can grow it almost anywhere so its natural market value is extremely low. I doubt there are a lot of gangs financing their criminal activity off of potato sales or whatever.

Extortion and kidnapping must be way less pleasant and much more difficult than dealing drugs. It's very hard to believe that they could scale up to be the same sort of revenue source.

As for the US and its supposed success, sure, it's better off than Honduras, but it still spends a fortune on law enforcement and has a massive prison population. I don't want to think of how many lives have been ruined over needless drug-related convictions. US demand and money are also what's fuelling a lot of the violence in Latin America.

I disagree. I think the cartels or some large agro businesses would set up huge farms just like tobacco farms. I'm fairly certain it's perfectly legal to grow tobacco in your backyard, but no on does because it's so much cheaper and easier to buy it from a farm.

So those people with expertise in growing it would continue to do so but out in the open in huge farms and profits would plummet to near at-cost production levels as they compete with similar large farms.

If you read the article, it points out that the price premium is for all the risk various actors bear in the cocaine supply chain. If you derisk it, you kill most of the profits and suddenly the cartels will have to compete with industrialized agriculture. This will not do wonders for the cartels' profits, and once the profits disappear, the ability to pay enormous bribes follows.

Also, without making any judgement about whether people should or should not do certain things, banning private, consensual transactions rarely works well or inexpensively. My politics do not trend libertarian, but this is a well established fact at this point, whether it's prostitution, drug use, etc.

Why would the largest consumer (US) purchase drugs from the drug cartels if it were legal in the US and could be sold at every 7-11?

The drug cartels would lose a lot of the revenue which makes them powerful.

Why you are worrying about revenues of cartels? If you think that selling drugs is legal, then their business is equally legal to business of Apple or Microsoft. Why you are not worrying about revenues of Microsoft or Apple?

Because Apple and Microsoft aren't using their revenues to kill thousands of people. If cutting off their revenues diminishes their ability to do that, it'd be irresponsible of us not to worry about it, or at least consider it

Because Microsoft and Apple's retail employees don't do drive-by shootings of each other's storefronts.

No one here is claiming that selling drugs is legal. Some of us think that selling drugs should become legal, in the hopes that businesses that are like Microsoft and Apple, i.e., don't assassinate judges, etc, will outcompete the cartels and decrease the cartel's revenues, hence decreasing their ability and participation in such undesirable activities.

"When you legalize drugs, they aren't going to suddenly stop selling it. They will now have a legal business which will continue to fund their criminal empires. We most likely will see an increase in other crimes, like extortion and kidnapping."

No. Once a drug is legalized, supply can go up and price plummets. What was once a "criminal empire" now has the cash flow of a 7-11. And because price plummets, addicts no longer need to crawl in your bedroom window to steal money/goods to buy drugs. Crime drops. Drug-related extortion and kidnapping would virtually disappear.

While that would reduce violent crime, it would also sanction people using recreational drugs besides alcohol, tobacco, and caffeine. Many voters and politicians find it against their religious or moral beliefs to allow other people to do recreational drugs besides the ones they themselves are doing.

Arguably it would take time for the violent crime to subside. A culture of violence does not vanish over night, but rather over generations.

My prediction is Mexico's violent crime spilling over to the US resulting in a drug war surge (both already happening to some degree.) In the background, regulators slowly loosen up laws as to not lose face (would explain the toleration of medical marijuana.)

I can only imagine that from the outside American appear completely crazy. Regulators and lobbyists write the laws, bankers and the wealthy fund the enforcement, and then both parties consume them in obscene quantities. The exporting country pays the price in blood and corruption. From my perspective as an American, that's not crazy, that's evil.

Homicide and other violent crime rates tracked pretty tightly to the creation (and eventual repeal) of alcohol prohibition laws in the US. Homicide rates dropped dramatically immediately after prohibitions repeal. We likely wouldn't need to wait "generations" to see a benefit.

One reference for prohibition homicide data: http://www.cato.org/publications/policy-analysis/alcohol-pro...

Still, we should anticipate some delay before decay. Otherwise it could cause cold feet, leading to a pretty strong backlash.

One of the articles points is that violence is used because there are no other means to settle disputes. In a legal atmosphere, the legal system could be used instead of violence.

In additional, legalization would cause prices to crash because the risk would drop significantly. Even so, in a legal environment there would still be a black market because regulations would still impose restrictions, but it would be more like teenagers paying homeless guys to buy beer and cigarettes.

add sugar to your list. People definitely eat for recreation and it is addictive.

People simply don't think rationally about the war on (some) drugs.

They make most of their money from cocaine and methamphetamine (which can be legally acquired, but that didn't stop traffic). 90% of all cocaine in the US come from mexico. [1] Do you mean cocaine should be legalized? Alcohol is a bad analogy to legalizing cocaine, you should probably be comparing to the Opium Wars instead, which didn't really end well. [2]

[1] http://www.fas.org/sgp/crs/row/RL34215.pdf

[2] http://en.wikipedia.org/wiki/Opium_Wars

Why isn't cocaine legalized? Honest question - I've never done it nor have a I done a ton of research.

Should any substance be illegal?

If we start banning substances rationally, wouldn't cigarettes top the list.

Cigarettes, while harmful, don't result in instant death. Banning cigarettes would result in the same problem banning other drugs has created.

The only things that should be "banned" are those that are so intrinsically harmful they cause severe, immediate, measurable harm to both the abuser and society.

There aren't many drugs that people consume that qualify for this standard since to be able to continuously abuse something it can't kill you the first try.

Perhaps not, but you can overdose and die from nicotine.

Almost nobody does though because there is a legal form from which to get the high that is a minute fraction of what is required to kill you.

Interesting perspective.

Firstly, substances can be used without 'abuse'. Alcohol is a good example of this, you probably know many users who never abuse it. Alcohol most certainly can cause severe, immediate harm to the abuser an society.

Why ban substances based on harm? Why not just enforce the rules around the actual harm?

For example, enforce driving under the influence and don't ban alcohol.

Is there really a need to ban things like heroin which have a high rate of causing harm to the user? It seems like it is more of social and community issue. Throwing that person in jail is hardly improving their life.

Managing harm, as you suggest, is the best way to handle things going forward. It also covers a lot of things beyond drugs, things that are addictive for some people like gambling.

In terms of priorities it should be avoiding harm to others, such as not driving under the influence as you suggest, and then avoiding harm to the individual, as might be the case with a chronic alcoholic.

As a note, heroin isn't as inherently harmful as it's made out to be, but, like other things, so long as it's illegal it will really only be popular with the more hard-core drug users. It was legal before, after all.

I agree with the spirit of your argument, but for reference 30mg of nicotine is fatal. It's a potent neurotoxin and is actively used as a pesticide. It would easily qualify as something "so intrinsically harmful [it] cause[s] severe, immediate, measurable harm."

True; it seems there's some more fuzzy element involved, involving how the substances are used rather than their intrinsic potency. For various reasons, turning nicotine into a more potent drug hasn't become popular. And, tobacco leaves smoked as-is are not acutely dangerous (only chronically dangerous). But, the same is basically true of coca leaves. The difference seems to be that coca leaves are refined into more potent/dangerous recreational drugs, but tobacco leaves aren't.

By a very loose interpretation so would water and surely more people drown than die of a nicotine overdose.

I'd rather not be driving around on the same road as someone tripping on LSD.

Even if LSD were legal, it would remain illegal to drive while under the influence of it. But more importantly, do the laws prevent someone who wants to drive while consuming LSD stop anyone from doing it now?

I'm not sure about the USA, but in Canada, the number of people who use marijuana and the number of people who use tobacco are almost equal, despite only one of those substances being legal. That seems to indicate to me that the laws have no impact on consumption or the limitation thereof.

If you are worried about the effects of people using drugs, you are already witnessing them.

I agree, and feel the same way about people on alcohol -- which, incidentally, has a much greater risk of toxicity than LSD if you overdose. Which of these substances, if any, do you think should be illegal?

I don't mind if people kill themselves on drugs. I just don't want that to negatively impact me.

And the current War on (some) Drugs isn't having a massive negative impact on you? Do you not pay taxes? Do you own nothing at all of value and never go outside?

I have never liked the line of argument where 'but alcohol or cigarettes are worse than cocaine'. they should all be legal and people should decide for themselves what is more dangerous

Because there's always the risk that someone will try it out of curiosity. And since it's a highly addictive drug you might end up causing more problems than you intend to solve.

Like tens of thousands dying in the global drug wars annually, mixed with the cultural destruction we see in America's inner cities and with two million people in prison from drugs?

I don't see how you're going to stand any chance of causing more problems than that.

Cocaine has gotten cheap enough that anybody can try it if they want to. In the 40 year war on drugs, they've had a nearly unlimited budget and all the time that could ever be needed, things have only continued to get worse. The Cartels have already taken over every city in America, and they literally control portions of the south west. It's time to neutralize them, and the only way to do that is by destroying their profit centers with 'free market' competition that they can never beat (government regulated ala alcohol).

Only the government can create organized crime. And it's always through prohibitions of activities that should be legal.

There's plenty of organized crime arranged around things that should be illegal, for example slavery.

There's no organized slavery without complicit governments.

Bah, there is plenty of slavery without complicit governments.

Typical example: Criminals lure naive poor country girls with prospects of lots of money and a job elsewhere. As soon as they arrive to the destination country, they are held captive (they steal everything they own, and use violence) and then used as prostitutes. I fail to see government help in this scheme.

"The government" is absolutely complicit in that crime because they turn a blind eye to it.

Do you think that the cops don't know about Backpage or other prostitution outlets? Do you think that law enforcement is impervious to corruption?

I don't know about the US, but in other countries, slavery prostitution outlets are indeed persecuted and closed once found. Other prostitution outlets are tolerated (or encouraged.)

My point is even assuming incorruptible law enforcement, these outlets would still exist, might last less if you wish.

From there to saying it's a government sponsored slavery is a big step.

The government is complicit by keeping it illegal.

If it were legal, it could be taxed and regulated like anything else. Most people are OK with letting others do what they want with their own body. It's certain puritanical, tyrannical, authoritarian and powerful government factions that don't allow that.

I'm not sure that by legalizing prostitution the slavery outlets would disappear.

I think it depends on the government. If the taxes or regulatory fees on legal prostitution are too high, it can create a black market similar to that of tobacco or pharmaceutical drugs.

Quick thought experiment...

Same addict in two societies.

Society 1) Drugs are regulated in pretty much the same ways they are in the US, and because of this prices are high. The addict may have a family or maybe not, but has bills to pay. He spends all his money on drugs leading to neglect of his bills. He gets arrested and is now unable to hold down a job. This leads into other problems after he gets out of legal trouble. He now has to steal to obtain the drugs.

Society 2) Drugs are largely decriminalized and cheap enough that a days supply for any addict don't break the bank. He doesn't lose his job because of legal ramifications and he just spends all his free time doing cocaine. He doesn't have to steal to obtain the drugs.

In the US, minorities in cities live in Society 1 while whites in suburbs are in Society 2.

I think you might have an exaggerated idea of how addictive illegal drugs tend to be compared to alcohol and tobacco. Heroin and Meth actually are more addictive[1] than legal drugs, but not magically so. Still, banning just those two drugs would be a coherent policy, unlike our current laws that also ban Cocaine, Marijuana, normal Amphetamines, LSD, etc.

[1]http://www.americanscientist.org/libraries/documents/2006451...

IANAH, but this runs counter to my understanding. The Opium Wars are closer to what we are currently fighting, than to the results of legalization. The British (Mexico) wanted to sell opium to the Chinese (US) when it was against Chinese (US) law. There is a significant difference in that Mexico technically forbids this activity too, of course, while the British did not, but legalization by the US would move it further away from the historical situation, not closer to it.

It's impossible to run an organization like this for so long and with profits so large, without the help of some (lets call them corrupt) FBI/CIA/DEA agents or politicians inside US. I may be just a sheep but the shepherd and the dogs are always working together. We are driven to believe that all this is Columbia+Mexico vs US conflict when in reality there may be an invisible and silent war inside every country (not only US) between the ruling class and middle+lower class and the "war on drugs" is just one of the never ending battles, which will not be won by anyone as long as the rulers don't have serious interests in winning it.

The article clearly pointed out that corruption is the biggest contributor to the continued survival of the cartels. If, somehow, we were able to make everyone in law enforcement and the government honest, then the cartels would find it significantly harder, if not practically impossible, to do smuggle their goods.

It does seem like the war on drugs could be fought more by addressing those that are supposed to be fighting it and removing corruption. Perhaps huge pay increases and bonuses for turning in people that attempt to bribe?

The smuggling can be stopped in less than a year. A country so powerful and resourceful that sent a man on the moon, waged wars with countless countries, played nuclear chess with the soviets, influences and spies everyone with satellites & drones, can't get to the roots of this drug octopus ? Bullsh*t. They don't want to. They went in Iraq for a bunch of imaginary weapons and in Afghanistan for a terrorist that killed 3000 citizens. If they really wanted to stop the drug dealers they would have invaded Mexico and Columbia 3 times by now, and no one could have stopped them because drugs kill tens of thousands every year. It's all politics and the politicians can play limitless dumb when they want to and no one can arrest them for that. They never admit conspiracy, never admit betrayal of citizen's or nation’s interests, they only admit incompetence cause that is not punished by law and the fools still buy it.

That is just hilarious; you think the drug cartel can be stopped by invading Mexico?? Did you see what happened in iraq; what happens in Mexico will be many times worse, a full on insurgency, funded by drug money, paid by US citizens...

Our best example of a good way to go about reducing the drug trade is to go the way of Portugal.

It was just a way of saying that US has a huge capability (intelligence and military) which could be used and is used when the "national interests" dictates, but it's not used in this case, simply because there might be not enough national interest. Another way of viewing this: US attacks only the dealers that refuse to subordinate (the Talibans were guests in Washington, but something went wrong in this relationship).

Let me quote [1] "An estimated 90% of cocaine entering the United States transits Mexico."

The key word here is "transits". Every other country in Central America, and some in northern South America are part of that "transit" too. Mexican just happens, to its bad luck, to be next to the biggest consumer.

Nobody is arguing to have cocaine accesible by kids at the grocery store. The argument is to legalize it to regulate it and, as someone below commented, to bring the prices down so is no longer such a profitable business.

What will happen to consumers when prices will be so low, so no body will want to sell drugs, because they are no longer profitable?

Hi! This is the Market Economics Fairy! I help supply and demand equilibrate everywhere! If there is unmet demand for a fairly easy-to-grow cash crop, then it means that the prices are too low! Raise them, and farmland will switch from other commodities as it becomes marginally profitable to do so!

Sincerely, the Market Economics Fairy!

(Full disclosure: I'm just borrowing this character because it's suddenly relevant.)

So, if you will be legal drug seller and you will be tight on money, what you will do? Just invest into few small doses and you will have clients for life...

yet somehow we allow nicotine to be sold... or sugar. both are highly addictive.

Same thing that happens when places get so crowded that nobody visits them anymore.

Do you have a source on your claim that most of their money comes from cocaine and meth?

The first link provided actually says they are the largest foreign supplier of marijuana.

Yes, I am saying cocaine should be legalized. People that want the drug today are able to obtain it anyway. We could put all kinds of restrictions on its sale and use, as long as it is easier to obtain legally than underground it would prevent the formation of wealthy criminal gangs.

As shown in the report I linked before. Meth is a highly regulated hard drug that can be obtained legally. [1] Mexican drug cartels still traffic it, still makes tons of profit from it, thousands of people die because of it. Regulating Meth didn't stop the drug war.

What exactly makes you think any other drug would be different?

[1] http://en.wikipedia.org/wiki/Methamphetamine

When most people refer to the legalization of "drugs", they are typically implying decriminalized (or semi-decriminalized) recreational use and not tightly regulated medical use (Desoxyn).

This makes sense, since a highly regulated substance is de-facto illegal if it is unobtainable by the vast majority of its target market.

Excuse me, but it's NOT legal. It's not legal to produce and it's not legal to sell or buy. Therefore, it's not being produced or sold by legitimate operations. THAT is why Mexican drug cartels still traffic it. Because it's still illegal.

Desoxyn is pharmaceutical methamphetamine. It is extremely infrequently prescribed, but technically more legal (schedule II, along with cocaine) than LSD or Marijuana (schedule I).

Methamphetamine is still illegal. That is why the cartels still traffic in it. There is no legitimate corporation to supply it and there won't be unless it's legal.

Alcohol sales are in the billions, why aren't the cartels making money from that? Because legitimate corporations are there to supply it already. (You can also produce your own alcohol at home, but most people don't.)

I'm in favor of drug legalization, but it's not going to happen any time soon, and I don't think it would reduce crime even if it did

It's hard enough to get pot legalized in most states - the "harder" drugs don't stand a chance.

And even if they were legalized, it's not even possible for a big illegal drug operation to "go legit". All of the drug cartels will still have long histories of violence, piles of cash, boatloads of weapons, and a ton of smuggling expertise. They'll probably just "pivot" to smuggling the next most profitable thing. Or smuggle untaxed and unregulated drugs.

People stop giving huge wads of money to violent criminals. Drug users stop being legal pariahs and are able to be a part of the criminal justice system other than as just a defendant. The courts stop being crammed full of drug users. Police departments stop being preoccupied by "dope on the table" drug busts and concentrate on things like homicide and violent crimes.

No, gangs aren't going to go away, but they will be reduced in capability and law enforcement will be far more effective. Crime will go down. Not instantly, but over a fairly short amount of time.

It would be hard to accomplish, yes.

With regards to effect, though, I'm sure it wouldn't magically fix everything. It would, however, mean that the cartels would face competition without the overhead of smuggling, which would drop the profit available substantially. They might well move on to smuggling the next most profitable thing, but obviously the next most profitable thing is not as profitable. The power and wealth of the cartels would thus not be growing as fast as it is, which is a much better situation long-run.

I'm reasonably sure that suitable mechanism design could be performed to make full legalization not only possible but much more desirable than the current scenario. It would require extensive reworking of legal and economic regulations and public policy. The first hurdle is legitimizing this type of research. From casual reading on the subject, I haven't seen any serious research like this in regards to the US, though admittedly I haven't looked very hard, but for obvious reasons the public coffers are not exactly overflowing to fund serious investigation into the matter.

You might want to take a look at:

http://www.tdpf.org.uk/blueprint%20download.htm

"After the War on Drugs: Blueprint for Regulation"

The fact that bad people will be bad people does not change the fact that taking away a major revenue source of theirs will lessen how much bad they will do.

For a historical analog, look at the Mafia. When Prohibition ended, the Mafia didn't become nice people. They continued a life of crime. However they had diminished power, and we had fewer open gun battles in the streets. On the whole this was a good thing.

Compare to alcohol prohibition.

Yes, they will pivot. But if you legalize pot (easy income) and some harddrugs, there is not much to pivot to. The market will be too small to sustain. I mean ; if cocaine/heroine is legal, other drug users would swarm to that as it will be cheap (it is cheap to make anyway), so what do you pivot to?

The big difference of drugs from alcohol and tobacco is their addictiveness. While you can't get addicted to alcohol or tobacco after one use, certain drugs cause severe addiction after first dose. Of course you can legalize only mild drugs. But it won't solve the problem because as we see this business is mostly about very addictive ones.

EDIT: typo

The key problem with your argument is the idea that we can reduce drug use by making it illegal. That fact isn't born out by reality.

[citation needed]

"Scientists have found, for instance, that nicotine is as addictive as heroin, cocaine or amphetamines..."

http://www.nytimes.com/1987/03/29/magazine/nicotine-harder-t...

Food and water are even more addictive than nicotine.

Drugs are changing your brain by altering it rewarding system.

I don't think drug legalization is the final answer the problem of cartels. Like the article says, '“The goal of these folks is not to sell drugs,” Tony Placido, who was the top intelligence official at the D.E.A. until he retired last year, told me. “It’s to earn a spendable profit and live to enjoy it.”'

If you shut down their income from drugs, they will find another way to make money. I had the opportunity to talk to a former U.S. Border Patrol sector chief in San Diego about the cartels. He said that in San Diego, they achieved some level of success in constraining the drug trade. The cartel response? Kidnap people and hold them for ransom. Like any business, they will find another way to make money when the market changes. As their innovations in finding new ways to bring drugs into the country shows, they can be creative when faced with a business problem.

The only reason there were suddenly large numbers of people with the appetite for the high life and a lack of scruples is that you can't exactly put "Regional Drug Cartel Leader" on your resume. This is a transition cost that will fade over time, unlike the costs of prohibition which seem only to mount.

You don't see the Kennedys going around kidnapping people, do you? Why should it be any different with modern drug dealers?

Kidnapping is not nearly as scalable an operation as drug trafficking.

I think we should do even more: develop new drugs(and processes) with less side effects. Drugs(and processes) that let you escape reality when you want, but still enable you to manage life reasonably well and be relatively healthy.

It's clear that the need or desire to escape reality won't change anytime soon. Instead of ignoring and fighting this reality, we should try to find constructive solutions.

Simply regulating dosage and purity would be a huge safety improvement.

I think that merely by using objective scales to determine what to ban, like this[1], we would accomplish the same thing. We already have safe opioids and amphetamines from medical research. If those were legal over the counter but Heroin and Meth weren't I expect more people would use them instead.

[1]http://drugwarfacts.org/cms/?q=node/28

Here's an unpopular view: Let's work together to make reality less dreary such that you don't have an urge to escape reality.

You're going to have to work pretty hard to make reality not look a bit dreary compared to the average LSD trip...

I read this and wonder how bad it needs to get before politicians take legalisation seriously.

50,000 people dead? - check. Billions in profit? - check. Narco-states on the US border? - check. Criminals walk out of prison? - check. Gigantic crack & methaphetamine problem within the US? - check.

Have you seen Law Enforcement Against Prohibition - http://www.leap.cc/ ? They appear to be a rare bastion of sanity on the subject. I keep meaning to buy one of their t-shirts.

It would need to start happening in a country that's in a position of defying the United States, or happening in the United States itself.

So long as the policy is perpetuated by people who are elected by those who still sheltered from the worst of it, I wouldn't expect any change.

Particularly not now that there's a robust military-incarceration-industrial lobby with a strong incentive to maintain the status quo and no limitation on their ability to make 'campaign contributions'.

Very well said. The media generally doesn't specify and inter-relate the problems or state them as plainly.

Having a gigantic drug war going on right across the US border in Mexico is a crazy thing to begin with. Add to that it's about owning territory to import drugs into the US, to feed a large demand.

Plus the cartels make bales of money on marijuana sales, when it could easily be a huge cash crop for so many US counties. Job creation blah blah blah.

I'd support legalization and taxation of marijuana, it seems like the honest thing to do since it's everywhere anyway and doesn't seem to destroy people's lives like crack and meth.

Legalize 'em all. It's unpopular, but it's the only solution that doesn't lead to ever-increasing authoritarianism.

Drugs don't destroy lives, addiction does. Prohibition drives addicts underground. This makes the problem harder to solve, not easier.

The legal status of tobacco and alcohol are proof-positive that biology isn't the metric that's used. It's politics and big business, pure and simple.

Given how much money the cartels are making, I wonder if they are funding politicians lobbying to keep marijuana, cocaine etc. illegal?

The problem isn't gangs; it's gang violence. Making their crimes less stringently punished (reducing the paranoia within their ranks) as well as doing more to restrict the flow of arms from the United States (a better use of funds than incarcerating college potheads) seems a more sensible experiment to try before full legalisation.

Consider the negative externalities of cocaine use (much higher than marijuana's); the healthcare implications and effects on worker productivity are costs that would need to be covered by a heavy tax. That, in turn, would make smuggling profitable.

Legalising cocaine would cause its price to plummet. This would cut into cartels' profits but also spur demand. I'm not sure if I want to walk around the street with people high on bath salts and cocaine. Perhaps in a highly controlled environment? That still leaves a profitable opening for illegal distribution.

For Mexico it makes sense to decriminalise; the United States would bear the cost of use while it could potentially build a viable industry in cocaine processing. It makes similar sense for the US to pressure Mexico to do otherwise up to the expected public cost of higher cocaine use in America.

What if production and sale were legal, but consumption was illegal?

The citizens of Monaco are forbidden from gambling at the Monte Carlo casino; I could see Mexico legalising production and transaction of cocaine but keeping consumption strictly prohibited. For the United States, however, this would be putting lipstick on a pig.

> I'm not sure if I want to walk around the street with people high on bath salts and cocaine.

People probably wouldn't be using mystery-chemical-x-mixed-in-some-bro's-tub bath salts if they could get cheap cocaine from a well established business.

Alcoholics still drink whatever crap they find. Including anti-freeze, perfumes, sanitary alcohol, moonshine. And this is even in countries where alcohol is dirt cheap like Russia.

Mostly they don't. And more of them would do so if potable alcohol was orders of magnitude more expensive.

In the tv show The Wire, third season, a Police Captain tried to 'legalise' drugs sale. He put all the dealers, the little soldiers, and said "If you deal in the streets, we will arrest you. If you deal in the free zone, you are free to go". At first, the dealers were very distrustful, but after some days, all the dealers were in the same place. And the addicteds learned that they could only buy drugs in that zone. They even have the cops in the place, to prevent any thing from happen.

The streets became a better place, no more criminals in the corners. No more shots and dead bodies in the communities. The kids were playing again in the streets. And the cops wouldn't have to arrest minors selling drugs, they were able to focus in the big fishes, the head of the operation. The problem is, after some time, the town hall and the police chief started to not believe in the crime rates the captain was giving to them. They were TOO DAMN LOW. They tough he was manipulating, faking or someway, not giving the actual rates. But they were true, he just couldn't say that he legalized the drugs. After some time, he had to tall, and of course he was fired.

I think the series made a great simulation of what it will happen that we had in our city an area were drugs selling were legal. Everyone in HN should watch the show.

PS. I'm sorry for typos and bad grammmar. Not native speaker. I'll get better.

I think you're taking away too much from a TV show. The post you've made could possibly happen but how much would crime rates (robbery in the best scenario) rise because drugs are legal? I really don't know the answer.

One of the many things I've learned in my life is that criminals will go where the money is. In the early 20th century it was alcohol, prostitution, gambling, etc. They later moved on to drugs which was more profitable than alcohol, especially after prohibition ended. Criminals will always find a way to extort.

I think it's a little dangerous to think of the world as "criminals" and "non-criminals". There are people who commit crime who wouldn't commit them in a different context, and to say that whatever we do "they" will just find a way to keep things exactly as bad.. It doesn't feel like it's a good model of reality to me. There would still be lots of crimes, but the mega-drug-cartels that we're seeing now couldn't exist with legal drugs, and they couldn't be replaced with something else of that size unless we prohibit something else that has the attributes of drugs, and I don't really see it right now.

>There are people who commit crime who wouldn't commit them in a different context, and to say that whatever we do "they" will just find a way to keep things exactly as bad.

It's not as if I'm talking about a father stealing a loaf of bread for his family. The people I'm speaking commit the most vile crimes possible. They are deserving of the tag 'criminal' regardless of what position in life they started.

That said, this isn't really about defeating the drug cartels. It's about the putting an end to the violence that is behind it and stopping it from spilling out into the lives of law-abiding citizens.

In South America, criminals have turned to kidnapping family members of wealthy individuals and even talented baseball players who have signed deals with professional teams. Most baseball teams have backed out of looking for prospects in Venezuela because of these worries. There was even a minor league prospect who was kidnapped last year and held for ransom.

the real effect of what is described on that show would be the opposite. you aren't taking away the 80% of crime where the proceeds go towards procuring the drug. you aren't taking away inter-supplier conflict. and you are decreasing the available drug turf thus increasing competition between suppliers and raising the stakes.

in short:

* same crime to supply addicts is there * inter-gang violence is still there * premium on drug territory increases, thus violence and competition increases

The Wire is excellent fiction, not a simulation.

Something similar ("Needle Park") was attempted in Zurich in the eighties: a place where drug sale and use was officially tolerated. It was closed after a few years. Opinions are mixed.

Just like in The Wire, except Zurich version lasted a few years longer :L)

I don't think drugs are that price sensitive -- they may even be Veblen goods.

I always see this argument when it comes to drug violence in Mexico but I don't think it is that simple.

If the goventment gets involved I'm sure it will want a highly regulated system, just like it does with all of the alcohol regulations on the books now. If the government says that only X supplers or growers are allowed to legally sell drugs then I can't see how this is going to be cheaper than stuff that is out on the street. If the government wants to make drugs on par with high end drug cartels that customers like I see it being overrun in bureaucracy and will cost the buyer much more than if they hit up their local dealer for better product at a cheaper price.

If the government can't beat the price + quality then people are going to continue to buy from suppliers in Mexico, which will keep fighting it out for this market.

You're just making stuff up. You mention alcohol regulations; how many people are running moonshine from Canada these days to get around all those regulations and tarifs?

Not from Canada, but go to any music festival and you'll find Moonshine is quite common.

Legalizing drugs by itself does not imply that the price of drugs will fall and that the violence will end. Lest not forget that, in Latin American, revolutions have been fought because of the impact of the exploitation of the people and land for the cultivation of commodity products such as bananas (see Banana Wars in Wikipedia) and for which gangs like La Mara are a consequence. Drugs for personal use are legal in Mexico, so the violence itself is not related to the criminalization of drugs, it's related to the profit of drugs. And legalizing drugs only strengthens the cartels grip on that profit (see OPEC).

The one key aspect that I often find that is missing from the intellectual reasoning of the drug cartel violence in Mexico is that most Americans don't understand that narco culture that exists in Northern Mexico. For over 30 or 40 years, there has developed a narco culture in Mexico where songs and movies have been influenced by the trade (see Chalino_Sánchez). Basically, Chalino_Sánchez was like the Mexican Jay-Z except he didn't sell out and was gunned down by an unknown assailant.

"And legalizing drugs only strengthens the cartels grip on that profit (see OPEC)." OPEC is powerful because they are an oligopoly. The current drug situation is an oligopoly because there are a limited number of people willing to risk their life and liberty to produce and sell drugs. By legalizing the production of drugs in the US, you allow honest US citizens to compete with far less risk. This will break the drug cartel's oligopoly. Whether they maintain their power depends on their ability to compete in a fairer market.

> Drugs for personal use are legal in Mexico, so the violence itself is not related to the criminalization of drugs

That's a recent development, plenty of violence before that desperate measure.

The entire supply chain needs to be legalized before the violence will end. Killing will stop, former murderers will be caught, and the American drug use rates will stay as steady and unaffected as ever.

Is coca that different from tomatoes? I mean, is it, all things considered, harder to produce cocaine than ketchup? If fully legalized, shouldn't the price of cocaine be similar to ketchup?

The reason that cocaine is as expensive as it is, stems from its illegality.

And subsequently, the only reason that the cartels were able to grow to such monstrous proportions is the amount of money that can be made with the production and distribution of illegal drugs. Remove the money and you'll remove their power.

Coffee is a better comparison than ketchup. Tomatoes grow more widely.

Do you really think these people are just going to go away?

Ironically, I'd imagine the cartels would be for keeping it illegal - it's their market!

not would be. I'm certain they are lobbying hard on any potential policy change that would affect them. What multi Billion dollar industry does not do this?

Or the less popular option is to forcibly remove them from the planet.

No crime, barring [b]child slavery[/b].

http://vision.ucsd.edu/~kbranson/stopchocolateslavery/ataste...

https://en.wikipedia.org/wiki/Children_in_cocoa_production

Top comment, and many comments totally oblivious to the realities of life. Not surprising for HN, sadly. Keep those libertarian blinkers on boys!

See, the thing is that, when a legal company is caught enslaving children, they get massive political, social, moral and economic pressure to stop. For instance, Nike and its famous sweatshops.

If your business is illegal, however, you're neck deep in shit already, so the marginal benefit for stopping is almost zero. Twenty to fourty years added to a life sentence.

Sadly, I think if the US were to decriminalize all drugs, the most drastic changes would be seen in Mexico and central american countries. So, what incentive does the US have to help out poorer nations which supply us with drugs? These countries suffer the majority of the negative externalities associated with the drug trade, and supply for drugs thoroughly meets demand in the US, with minor unpleasantness north of the border.

Won't they just shift to the next most profitable illegal good or service?

Yes, but it would be less profitable. That's less extra money for turf wars. Also, less incentives for people to become criminals, even if current ones are hopeless.

I know I'm unpopular for saying this but I doubt it would work and by that I mean people like Guzmán will always exist whether it's drugs, prostitution, stolen merchandise or whatever.

Even today tobacco, mostly cigarettes, is smuggled and it is legal, people hate the high taxes implemented to help cover healthcare costs. The majority of legal drug (tobacco, alcohol) users it seems are low income so it would make sense taxes are a large part of the purchase price.

It's the same for alcohol easy to make and I think if I remember hearing it correctly from high school teacher that (here in Canada) the cost of alcohol is 99% tax.

Then people would say tobacco, alcohol, and probably drugs too if they are legalized should not be taxed so high, it's never ending.

If I said I didn't care if someone killed themselves using drugs that sounds callous but if I said I cared and thought people should not be able to use meth or crack then I'm told to mind my own business.

And people are living shorter lives due to morbid obesity because they can't manage to eat a healthy diet what would happen if drugs are legalized? People balk at taxing unhealthy food I can't imagine adding legal crack into that mess. People in the US and Canada can't seem to regulate their vices, I foresee massive numbers of deaths if drugs are legalized.

The issue is less about whether people like El Chapo will profit on drugs and more about the 50,000 people murdered due to illegal trafficking. People might smuggle cigarettes, but they don't usually murder to do so.

I also think people would be much more willing to tax drugs than food. The reason food is not taxed more heavily is because of industrial heavyweights lobbying congress extensively. There is relatively little money spent in pro-legalization lobbying.

Furthermore, drug legalization in Portugal has made it easier to treat users of particularly dangerous drugs (such as heroin) and has in fact reduced use. Portugal might not have the same drug culture as the US, but it's still a promising result.

> Portugal might not have the same drug culture as the US,

That's what I mean. I often deal with people from Monaco and work with a guy from Portugal and the difference in culture between southern Europe and here (US/Canada) is striking.

It's interesting to see how similar Monaco and Portugal are generally speaking. People from each area seem shocked by the excess we take for granted.

Food for example eating out and having a near litre container of sugar water plopped down in front of you doesn't raise an eyebrow here yet S. Europeans (as I call them) seem almost nauseated seeing it. Food is the same pounds of meat and lots of everything else, years ago a family would eat what one person eats today. None of the people I speak with eat after 8PM and most meals are small except maybe noontime, Portugal may be later.

I can't see the same results here for legalizing drugs we are a culture of excess, me first, I'm better than you, you-can't-handle-it-I-can kind of culture. It couldn't be more different going by what I can gather from speaking to locals from S. Europe.

As for cigarette smuggling not causing deaths, a car bomb going off in downtown Montreal killing an 11 year-old boy because rival biker gangs fight over smuggling turf, strip clubs (prostitution front) is pretty similar. Add to that Native American Mohawk warriors on the NY/Quebec border.

Hmm. It's tough to say. I see what you mean now. Food is one thing, because it doesn't carry the negative stigma that drug use does here. The US is also extremely friendly towards obesity, from what I see. Obese people do not undergo anywhere near the same amount of humiliation as they would elsewhere. You're completely right though that the food culture in the US is one of absurd excess. I'm just not sure that excess would carry over to drugs.

Re: cigarettes, they're actually smoked much less than in Europe, despite being cheaper and having less graphic warnings. Alcohol is certainly consumed differently as well, but most people grow up and stop binge drinking past a certain age.

I don't really know about the cigarette smuggling you're talking about, so I won't comment on that. If you can point me to an article about it, I'd be interested to read more. I do find it hard to believe that it's had the same effect on communities as drug trafficking in Northern Mexico.

It seems the majority of cigarette smuggling goes on at the Quebec/NY border. The two big players involved are the Rock Machine/Hells Angels (Bandidos and Bacchus) and Mohawk Natives who reside in the border region.

There is also quite a bit in eastern Quebec and New Brunswick , it's into the remainder of Maritimes the border really where a lot of this occurs.

CBC.ca has news of it from time to time mostly when violence erupts, a lot of it occurred in the 90s when the Rock Machine and Hells Angels were separate club but I think they merged, violently.

Of the regions involved all are areas of high rates of smoking. Even here where I live where the federal tax centre building is the local news found illegal unmarked cigarettes outside the smoking area! Imagine if in the US the IRS workers on their smoke break smoked illegal cigarettes and just put them out on the ground, ballsy!

http://www.montrealgazette.com/news/Mohawks+gangs+tobacco/14...

(PDF) http://www.cisc.gc.ca/annual_reports/documents/2001_annual_r...

> Michael Braun, the former chief of operations for the D.E.A., told me a story about the construction of a high-tech fence along a stretch of border in Arizona.

>“They erect this fence,” he said, “only to go out there a few days later and discover that these guys have a catapult, and they’re flinging hundred-pound bales of marijuana over to the other side.” He paused and looked at me for a second. “A catapult,” he repeated. “We’ve got the best fence money can buy, and they counter us with a 2,500-year-old technology.”

This is the border in Arizona, south of Sierra Vista. I often drive the international road and rarely see anyone else...not even border patrol. One does not need a catapult.

http://postimage.org/image/wtie29yrb/

Are drones patrolling the area from above?

There's a conspicuous blimp that flies about sixty miles to the north. I'm not sure of drones. I camp out there a lot and have never seen them.

[edit] it's an aerostat, not a blimp: Fort Huachuca is about fifteen miles to the north and "is home to a radar-equipped aerostat, one of a series maintained for the Drug Enforcement Administration by Lockheed Martin. The aerostat is based northeast of Garden Canyon and, when extended, supports the DEA drug interdiction mission by detecting low-flying aircraft attempting to penetrate the United States."

http://en.wikipedia.org/wiki/Fort_Huachuca

Well...the drones aren't exactly huge, and they're flying really high up in the air, so it's doubtful that you'd see them.

The MQ-1 has a wingspan of two dozen feet, and a service ceiling of 26,000 feet. (ten thousand feet lower than a 747) It's also got a pretty tinny piston engine, with a fairly distinctive sound.

Think more "cessna with missiles" than "RC plane".

EDIT: Just checked the wikipedia pages for both:

			MQ-1 Predator	Cessna 172
	Wingspan	8.22m		11m
	Gross weight	1,020kg		1,111kg
	Service ceil.	25,000ft	13,500ft
	Cruise speed	90kn		122kn

The blimp is out of Ft Huachuca and it is equipped with cameras, and there is a drone unit stationed there also. I sold some test equipment there in 1999 to TRW, now named something else.

There is also a really tall tethered balloon around there somewhere.

Well...at least there is on the map, :-P, I've never seen it in real life.

Does it really matter? It's kind of a big data problem at the best case. How do you detect who is a smuggler and who is a just lost in the desert? Do you send patrols to stop every single person? My intuition is that's cost prohibitive and an arms race with the cartels. They'll just get more sophisticated and buy off the drone operators.

I have ridden along that on my motorcycle and noted the many places that the barbed wire was cut and their were large vehicle tracks running across the border. Spent all day down there a couple of times doing some fun dual sport riding and not once was I questioned by a Border Patrol officer. The border is basically unsecured around there and as far as the eye can see to the east.

Which is why it's one of my favorite spots.

To be fair, fences are an even older technology.

Joaquín Archivaldo Guzmán Loera is a true hacker, he continually breaks into the most secure country in the world by exploiting it's weaknesses.

"The cartel makes sandbag bridges to ford the Colorado River and sends buggies loaded with weed bouncing over the Imperial Sand Dunes into California."

Because of this, even when he is caught and send to a maximum security prison he is able to organize an escape by hacking the prison system.

"...[Joaquín Archivaldo Guzmán Loera] was transferred to the Puente Grande maximum security prison in Jalisco...Guzmán carefully masterminded his escape plan, wielding influence over almost everyone in the prison... The escape allegedly cost Joaquín $2.5 million... According to officials, 78 people have been implicated in his escape plan." - Wikipedia (http://en.wikipedia.org/wiki/Joaqu%C3%ADn_Guzm%C3%A1n_Loera)

It sometimes blows my mind how much power money can buy. This gentleman seems to also have a powerful charm.

Not just a carrot, but a carrot and a stick. If you don't comply, your family and friends can and will be harmed.

It's a large reason why Mexico military forces stays anonymous by wearing balaclavas on duty and getting rid of the short hair requirement.

Also notable are the stories of what he has done since his escape:

"In 2005 on a Saturday evening, Guzmán reportedly strolled into a restaurant in Nuevo Laredo, Tamaulipas, with several of his bodyguards. After he took his seat, his henchmen locked the doors of the restaurant, collected the cell phones of approximately 30 diners and instructed them to not be alarmed.[26] The gangsters then ate their meal and left – paying for everyone else in the restaurant.[27]"

(from the same wikipedia article, of course)

He also seems to have very ... sophisticated understanding of markets, supply chain maagement and logistics. that and a very healthy sense for risk management. One only has to tip his hat in the light of these operations. Which dosn't mean they don#t have to be stopped.

Maybe legalizing would help, but I'm not sure if legalizing heroine would actually do something good. what you have to do is to wreck havoc with their supply chain. But in order to do that you have to discard philosophie and biases first. Something I don't seen coming any time soon as long as politians all over the place only think in names in fugure hats.

As the article mentioned, removing Chapo won't do any good, the worst case ould be the zetas taking over his supply network and logistics, something that doesn#t thrill me a lot.

How you actually disruopt his operations, hard guess. At the minimum it would involve some serious leg work and analyzing. Continous analyzing and leg work. Again somethiing I don't see western law enforcement fit to do right now. and as long as intelligence is running their asses of in pursuite of some afghan hill billis that won't change anytime soon.

My 2 cents.

This is a 101 on capitalism. Raw capitalism, where killing someone is cheaper than settling on a solution that works for everyone. One where power amasses. But most importantly: where all actors are innovating. You can be amazed at crudely built submarines and private cell relay stations but really its just market pressure at work.

Which brings us back to the obvious conclusion: prohibition doesn't work; the market will find its way. It doesn't need intricate portraits like this one to make that clear.

Yes, exactly.

The war on drugs is a perfect example of capitalism v socialism. In the red corner we have black market capitalists engaged in an enterprise with extremely high risk premiums. In the blue corner we have socialized law enforcement. If you truly believe that capitalism is the superior force, you can't help but know that the war on drugs is absolute unwinnable folly.

Upvoted for quality.

But I disagree with your choice of colors. The communist/socialist side is traditionally colored red.

Also impressed that the cartel smuggles cocaine on 747s that they own. That's a large operation.

I'm a bit surprised by this; I'd expect spy satellites to be able to spot a rogue 747.

You're assuming the money that bought a 747 can't buy a fake company for registration, plane manifests, flight plans and whatever else is needed to make it look legal.

Indeed. Where do they take off and land those planes? I don't think a flat stretch of grass will do.

With their cash flow they could own a company like DHL outright. A 747 is small potatoes.

I'd be really curious to know what their IT department looks like.

http://web.archive.org/web/20021014183134/http://www.busines...

Well, 'cept the subs part, it doesn't really sound like much. Someone should offer them services. :)

Numerous drug submarines have been uncovered since the article was written. It seems that they are badly made, some sink, others just break down.

I found their software engineering to be much more advanced than their submarines.

I found their software engineering to be much more advanced than their submarines.

Care to go on?

Sorry for the late reply.

I remember reading an article (That I cannot seem to find at the moment) about US border agents stopping a Cartel submarine dead in its tracks. What they found is a minimalistic submarine, capable of transporting a small load of product to a destination. They've found other submarines that have sunk due to their bad quality.

I think we're confusing actual military submarines with a makeshift version.

> They even use a fleet of submarines, mini-subs, and semisubmersibles to ferry drugs -- sometimes, ingeniously, to larger ships hauling cargoes of hazardous waste, in which the insulated bales of cocaine are stashed. "Those ships never get a close inspection, no matter what country you're in,"

That's interesting...I wonder if these ships are actually getting inspected now (since the article is from 2002) since they are a known transportation vessel.

> The mainframe was loaded with custom-written data-mining software.

> Most of the cartels' technology is American-made; many of the experts who run it are American-trained.

American-trained or Americans? I wonder if 'hackers' actually go to these countries to earn some big bucks while developing some "cutting-edge" technologies.

I've heard more than one hacker say with lots of humor and hushed speaking something along the lines of:

"You know if I wanted to..."

Apparently, they're not above acquiring IT staff by kidnapping and forced labor. Like the Nextel techs described here, who are probably being forced into maintaining one cartel's private cell phone network:

http://www.npr.org/2011/12/09/143442365/mexico-busts-drug-ca...

> She says in 2009, a group of Nextel technicians who were repairing cell towers in Tamaulipas were abducted from their hotel.

Fascinating. You're fixing a tower in the morning and then you're forced to work for some crazy cartel boss for the rest of your life. These people are destroying honest families.

I'm going to guess low-tech. If I were running a dangerous, cutthroat business, I certainly wouldn't trust my profits, life, or freedom to anything I didn't understand completely. Having an IT department puts Chapo's sysadmin(s) in a position to stage a coup that he can't detect or address until it's too late.

On the other hand, if you were running a dangerous, cutthroat business, wouldn't you want every possible edge to stay ahead?

I'd be interested in knowing how they were able to buy Boeing 747s. Those are huge transactions, you can't simply buy planes with cash.

I would assume that it would be through shell companies, but wouldn't (or shouldn't) Boeing be careful about who their customers are?

Times are not great for plane airlines, I'm sure a struggling airline CEO would have no issue selling a plane to ShellCorp with a large bag of money.

Airlines in the developed world almost never own planes, especially in the dimensions of any typical commercial airliner. The other problems that plane ownership brings (besides routine maintenance, which the airlines do own) are outside the desired core competency of airlines. The leasing of aircraft to commercial airlines is quite an industry in itself, and the transactions often involve complex, multilateral bond financing. There are almost always complex financing arrangements involved. Few buy a 737 with a bag of cash anymore than one buys a skyscraper outright. It is done by some of the world's less creditworthy airlines, and American has a penchant for owning, but it is increasingly not the normal industrial practice. Investors go in on planes just as they do on any other massively expensive capital goods.

Thus, the key for a drug cartel would be to get the various intermediaries involved in the aircraft leasing and financing process (some of which are surely quite corruptible) to lease one to ShellCorp, or buy on the secondary market, as some have suggested.

The bigger mystery for me is how they manage to fly in the context of overall international airspace control and air traffic control. Like someone else said, a 747 can't take off and land on a desolate patch of grass. Law enforcement and intelligence aren't stupid; they know how much money is in the "air charter" business, and it definitely won't pay for a 747. Charter companies use much smaller aircraft.

Edit: Unlike airlines, drug cartels actually do have the cash to buy a $138m plane outright, yes. But that would set off enormous alarm bells, because nobody otherwise obscure does that.

Edit: http://www.nytimes.com/2007/05/10/business/10flyboy.html?_r=...

I would assume they weren't new planes: likely easier to buy them off a company in a country with lax regulation than get Boeing to build you one.

Exactly. Lots of relatively undeveloped nations have their own carriers.

I can't imagine it would be than hard to buy a used 747 from a state with a dictator that was hard up for money.

'Money doesn't stink', as the Roman Emperor said. Who's to say they aren't selling?

But in any case, money and planes are pretty fungible. Perhaps they use straw buyers, or perhaps they simply buy used. Plenty of 747s out there now.

I was going to say the same thing, you see a lot of them parked on the tarmac in Mojave with out of business livery or sometimes just painted white.

There have been stories of folks laundering money in the middle east where there are apparently a lot of 'cash' jobs that take US currency, still the cartoon picture of the pallets of cash was pretty hilarious. I wonder if you could trade a pallet of cash for a check from a Saudi Prince?

I am most fascinated by the tunnels though. At some point these guys will be able to plan long enough ahead that they can buy a tunnel boring machine and starting south of the border have it end up in like down town San Diego. Maybe they could fund one of those evacuated tunnel trains we read about here recently :-). Given the work on quad copters I'm still surprised that there aren't semi autonomous groups of quad-copter mules carrying cocaine in swarms from point A to point B.

If that day were to come, as a hacker, how do you turn down a chance to work with a well-funded customer that want you to build a evacuated tunnel train, but on the other hand, this is essentially blood money. A passion vs moral dilemma...

Tunnel boring machines are extremely difficult to buy and more difficult still to run without oversight. They're just incredibly complex and hard to maintain machines. It's not impossible mind you , I mean, the cartels have all kinds of expertise available to them, but consider that the cartels have access to humans enslaved by their drug habits. Many people, fueled by cocaine, with picks and shovels can make short work of a tunnel like those described in the article.

You are much more practical than I am Chris. Looking at what humans, motivated by gold, did to the Sierras I'd have to concur it would be far simpler to do it your way.

They launder their money through major banks like Wells Fargo. If you do a Google search there are hundreds of recent news stories about this.

"but wouldn't (or shouldn't) Boeing be careful about who their customers are?"

Forgetting for a second whether we are talking about Boeing or the used market that is what money laundering is all about. Taking ill gotten gains and putting into a legitimate business. It wouldn't be a stretch to form a legitimate air charter company and even get customers as a cover for buying an airplane. If you've got the level of money they have there are many things you can do. Obviously you are hiding the transactions even if some of the parties might know there is something wrong going on.

Hell, it'd be good for your cover if 99 out of 100 flights are genuine charters with real passengers on board.

You are completely missing what the cartels are. They aren't gangsters in mountains with bales of cash. They are hundreds of businesses, thousands of people in everyday life, part of the law, justice system, etc.

Having a 747 isn't that much of an accomplishment when you consider that the Google guys have 7 planes and their own NASA airport.

There's a direct correlation between misery and drug use, as well as a direct correlation between misery and high levels of social inequality.

People who agonize between the dangers of prohibition vs. the dangers of legalization (or even decriminalization) are doing so in the context of a highly unjust society that offers virtually no social mobility, no access to the courts for anyone who isn't fantastically rich, no prospect for wage growth for anyone who isn't already in the top 10%, no job security for anyone not worth putting under contract (i.e. nearly everyone), and the terrifying prospect of loosing access to the health care system in the event of a job loss - all of which imposes tremendous levels of anxiety and insecurity for the vast majority of its members.

In spite of all this, we're still rich enough for most people to have some disposable income. Add that to the conditions under which most people live, and it's no wonder that the US is, per capita, a tremendously big consumer of drugs.

Given this environment, either option will have predictably bad results. But a society that was far less friendly to the winner-take-all ethos, and more concerned with basic health and economic security for a large middle-class population would find that drug coming down to much more manageable levels, making the decriminalization route a much more attractive option.

Laws could punish behavior that affects other people rather than behavior that does not.

With alcohol, it is legal but certain actions that involve alcohol are not, like driving. So, driving while high would be illegal and there would still penalities for committing other crimes while using drugs, but casual use that affects only oneself would not be illegal.

However, there may be other consequences to actions like higher medical premiums or getting fired from a job for misuse, etc.

To me, laws should be designed to protect people from other members of society, not to protect people from themselves. Breaking someone else's things is illegal, but breaking your things is not.

I've found this article to be 100 times as effective when listening to this as I read it: http://www.youtube.com/watch?v=4-wtJuqyKko

I wonder is Ignacio "Nacho" Coronel is the basis for Gustavo on Breaking Bad.

Reading this article made me think about how well researched Weeds and Breaking Bad are.

I wonder if we could find a way of making these drugs less "popular", similar to how we've done with smoking. That might require legalizing them, so I'm not sure it would actually reduce consumption. But it would hurt the cartels either way.

Here's a link to story on the Wisconsin hunter that stumbled upon a marijuana farm operation on public land.

http://fox6now.com/2012/05/17/cartels-invade-the-northwoods/

I admit that I (in a way) root for those guys. If they can move around such quantities of physical illegal stuff then we can be sure we can move around any strings of bits we choose to.

It is a matter of priorities - drug enforcement isn't high up the agenda.

The DEA has a budget of $2.4 billion. The NSA's budget is classified, but most analysts estimate it's at least $6 billion - over double that of the DEA. And that's just one intelligence agency. The total intelligence budget of the USA is $80 billion.

Cartels could easily be dismantled if the will and money was there - it isn't, because we would rather spend that money on other things, such as nation state intelligence and counter-terrorism.

They might be dismantled, but all the incentives of illegal distribution would remain. Demand would remain, prices would climb, and inevitably new cartels would spring up in their place to fill the demand.

The drug trade provides a great way for three letter agencies to transport money, men, and materiel around different parts of the world.

For example, the recently deceased Jon P. Roberts of Cocaine Cowboys infamy (great book, btw) is alleged to have become a CIA asset in his later years, after he was captured and removed from the cocaine importing business.

"The Sinaloa is occasionally called the Federation because senior figures and their subsidiaries operate semiautonomously while still employing a common smuggling apparatus. ... To reduce the likelihood of clashes [between competing interests], the cartel has revived an unlikely custom: the ancient art of dynastic marriage. ... An associate may be less likely to cheat you, or to murder you, if there’ll be hell to pay with his wife."

“A catapult,” he repeated. “We’ve got the best fence money can buy, and they counter us with a 2,500-year-old technology.”

seeing as stone walls have been around for minimum 20000 years, and wooden fences likely much longer, I find his comment kind of funny.

Catapults are cutting-edge tech compared to a fence..

Preaching to the converted.

What's the point of these articles if they have no impact on legislation or the national conversation?

Opium Wars - there is at least 1 President who had connections in some way or another to this earlier form of the drug trade.

FDR (via his maternal grandfather Warren Delano).

There are others who also became President, (starts with a B) who are alleged to have been heavily involved while in a secretive government position.

Can anyone recommend a good book/author detailing the history of these cartels?

If you guys have interest in this topic, this is a good blog to watch:

http://www.borderlandbeat.com/

Why does government follow policies that make drugs so incredibly profitable?

The folks I know who work for the government are pretty rule driven. Folks like that seem to think that rules have real power over people in a way that isn't true -- as if the rule itself has intrinsic power to stop people from doing X rather than the rewards and punishments which get tied to it.

The market for illicit drugs rivals that of oil.

Factions in our government and governments around the world can make money secretly from it.

Powerful people also see the value of playing both sides. They profit by producing it and they also profit by owning stock in many private prison corporations here in the USA where we have the highest percentage of non-violent prisoners.

Whats the easiest way to stop people from breaking the law? Change the law.

I believe that in order to fix drug policy, we need to think about the issue a completely different way. The main issue is the basic one of sovereignty of the self; the ability to do whatever you want with your own body without imposing costs on others. It's the very same idea underpinning the legalization of suicide. It's bigger than this, but that's for another post. The short version is that all laws should be guided, first and foremost, by the harm principle.

Keep in mind the one thing that is paramount with applying the harm principle: /without imposing costs on others/.

So what we should do is make smoking anything where others can inhale it without consent illegal and legalize everything else-whether snorted, injected, swallowed or absorbed of all drugs. The only places you should be allowed to smoke are designated private smoking facilities with air filtration systems or your own home if you install an air filtration system yourself. I cannot refuse or consent to inhaling smoke (and where I live, it's a constant assault on your respiratory system. If the people using it ate, snorted, or injected it, there would be no problem). Otherwise, just legalize and regulate; you should have to go through a process to determine whether you're fit to use certain types of drugs, sign consent forms, and agree that any costs incurred due to potential addiction are your own and will not be borne by the state (including things like alcohol - nothing would be exempt from the basic health indemnification. Addiction programs would be covered, though.) If you agree, you're sold drugs by state-chartered companies that are tightly regulated, including pricing, to eliminate the black market. If you use them for medical purposes, you'd be able to bypass the process with a prescription (subject to the same regulations about methods of use.)

We should also deign to move hardcore addicts into treatment programs, or, in the case of those who are incorrigible, to long-term "use and protection" facilities. Finally, we should have designated locations with medical personnel, security, and addiction counselors where addicts could use drugs without fear of personal harm and without being public nuisances.

With a harm reduction-based system, the entire apparatus surrounding the drug war crumbles. The income of smugglers and dealers disappears. The need for most costly state organizations to fight it goes away. The violence largely disappears (what's the nominal level of violence surrounding nicotine and alcohol?) Regarding DEA funding. Under the system I outlined, this agency would actually get useful: to crack down on and prosecute black market (for those who want to go around the screening process) drug smugglers, importers/exporters, and sellers to the full extent of the law.

People are going to do drugs no matter what we do, so we should be talking about methods of use and harm reduction, not just "substances." Don't "legalize pot" or the like; protect sovereignty of the self, and reduce harm to individuals and society.

Caveats:

Is a full drug legalization policy feasible everywhere? In every country? I would have to give that an unqualified no. In order for a system like this to be feasible, many things are needed.

- A working system of justice that is generally trusted by the populace.

- A largely transparent system of governance.

- A government, justice system, and law enforcement personnel that are perceived to be (and actually are) to be largely free of corruption.

- A strong state that can actually enforce edicts against black market suppliers.

- A strong state, stable state that would be difficult to overthrow.

- A culture that truly accepts harm reduction, and does not simply regard using it as "defeat" or "moral midgetry" Most developed countries fit, or could fit this bill. There are places, however, that are so plagued by corruption, are already so violent, are so unstable, or are already basically run by drug organizations that legalizing drugs would be like legalizing murder (Mexico fits this definition, unfortunately. It appears to already be near to a full-fledged narco-state.) It's already the rule, and would basically have no effect except to make these drug organizations laugh. In those places, some of which are bordering on failed states (or successful narco-states) cannot be fixed in this way. Those places need to re-establish order, trust, and strong states. They should not be thought of as drug wars, however. They should be thought of more like "reclamation missions." Criminal organizations have gotten so powerful, that they are often their own nations inside of existing states, and those states need to "reclaim" their territory and power from said organizations. Those situations are far beyond the drugs. They're fundamentally about power.

Moving beyond today's current drug-related battles, we need to ask another question: why, in the face of so much effort to combat it, do so many people still want to use recreational drugs? 1) To escape crushing poverty, despair, depression. For these, only addressing the root causes are going to get us anywhere. Economic opportunities, physical security, better social safety nets, better mental health services, etc. 2) Pure enjoyment. For this, developing largely non-addictive, side-effect-free, cheap, legal alternatives to current recreational drugs. This could be anything from better drugs to computer-neural interfaces that allow more pleasurable/realistic experiences.

It's disheartening to see the intense division on this subject on Hacker News. It leads me to believe the issue gridlock will continue, and the only plausible solution (legalization) will continue to be a fantasy. And as a consequence millions will continue to be jailed, tens of thousands will continue to die and the cartels will continue to grow stronger.

Small prediction: the US Government won't legalize drug use and production until the cartels are so powerful the Feds can no longer even partially contain the drug trade. Within a decade the cartels will be powerful enough to directly threaten the US President. I think that'll just about do the trick.

I don't like the way the author glibly compares his subject with startups like Facebook and Netflix and seemingly seriously uses real notions of economics such as 'cartel' and 'capital-intensive'. ("Sinaloa is both diversified and vertically integrated, producing and exporting marijuana, heroin and methamphetamine as well. ") It's frankly disgusting.

Of course economics is the study of how people behave with money and resources. You can make these comparisons - just as you can study the economics of lynchings and torture by slaveowners to assert ownership over their property, the practices of the East Indian Company, or the (taking out touchy subject - think of warmongering; not saying such a thing exists). But please don't do it "straight" or without any irony. This isn't economics. This is death and murder (or war etc).

The economics is important. But it's not the economics that keeps me - or the Coca Cola company or your uncle Jack - from arming up with an uzi and "diversifying" into this "sector". Have some decency.

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