Reporting on the Mexican Cartel Drug War

Undermining Mexico’s Dangerous Drug Cartels

Monday, November 21, 2011 |

We have included the opening summary, conclusion and author's highlights of this Cato Institute policy paper advocating the legalization of drugs. The link to the complete report in PDF format is listed below.

http://www.cato.org/pubs/pas/PA688.pdf

Wikipedia describes the Cato Institute as a libertarian think tank headquartered in Washington, D.C. whose stated mission is "to increase the understanding of public policies based on the principles of limited government, free markets, individual liberty, and peace".

(This post is not an endorsement of the Cato Institute or the author's position on ending the prohibition against drugs. This is a complex issue with convincing arguments for and against.)

Executive Summary
Since President Felipe Calderón launched a military-led offensive against Mexico’s powerful drug cartels in December 2006, some 42,000 people have perished. The situation is so bad that the Mexican government’s authority in several portions of the country, especially along the border with the United States, is shaky, and
the growing turbulence creates concerns that Mexico is in danger of becoming a failed state. Although such fears are excessive at this point, even that dire scenario can no longer be ruled out.

U.S. political leaders and the American people also worry that Mexico’s corruption and violence is seeping across the border into the United States. That danger is still fairly limited, but the trend is ominous. Both the number and severity of incidents along the border are rising. Experts propose several strategies for dealing
with Mexico’s drug violence. One suggestion is to apply the model used earlier to defeat the Colombian drug cartels. But the victory in Colombia is not as complete as proponents contend, and the situation in Mexico is far less favorable to using that strategy. Another suggested approach is to try to restore Mexico’s status quo ante, in which the government largely looked the other way while drug traffickers sent their product to the United States. But too much has changed politically in Mexico for that approach, which would be only a temporary Band-Aid solution in any case.

The only lasting, effective strategy is to defund the Mexican drug cartels. Reducing their billions of dollars in revenue requires the United States, as the principal consumer market for illegal drugs, to abandon its failed prohibition policy. That move would eliminate the lucrative black-market premium and greatly reduce the financial resources the cartels have available to bribe officials or hire enforcers to kill competitors and law enforcement personnel and intimidate the Mexican people.

A refusal to abandon prohibition means that Mexico’s agony will likely worsen and pose a significant security problem for the United States.

Conclusion
The most feasible and effective strategy to counter the mounting turmoil in Mexico is to drastically reduce the potential revenue flows to the trafficking organizations. In other words, the United States could substantially defund the cartels through the full legalization (including manufacture and sale) of currently illegal drugs. If Washington abandoned the prohibition model, it is very likely that other countries in the international community would do the same. The United States exercises disproportionate influence on the issue of drug policy, as it does on so many other international issues.

If prohibition were rescinded, the profit margins for the drug trade would be similar to the margins for other legal commodities, and legitimate businesses would become the principal players. That is precisely what happened when the United States ended its quixotic crusade against alcohol in 1933. To help reverse the burgeoning tragedy of drug-related violence in Mexico, Washington must seriously consider adopting a similar course today with respect to currently illegal drugs.

Even taking the first step away from prohibition by legalizing marijuana, indisputably the mildest and least harmful of the illegal drugs, could cause problems for the Mexican cartels. Experts provide a wide range of estimates about how important the marijuana trade is to those organizations. The high-end estimate, from a former DEA official, is that marijuana accounts for approximately 55 percent of total revenues. Other experts dispute that figure. Edgardo Buscaglia, who was a research scholar at the conservative Hoover Institution until 2008, provides the low-end estimate, contending that the drug amounts to “less than 10 percent” of total revenues. Officials in both the U.S. and Mexican governments contend that it’s more like 20 to 30 percent.

Whatever the actual percentage, the marijuana business is financially important to the cartels. The Mexican marijuana trade is already under pressure from competitors in the United States. One study concluded that the annual harvest in California alone equaled or exceeded the entire national production in Mexico, and that output for the United States was more than twice that of Mexico. As sentiment for hard-line prohibition policies fades in the United States, and the likelihood of prosecution diminishes, one could expect domestic growers, both large and small, to become bolder about starting or expanding their businesses.

Legalizing pot would strike a blow against Mexican traffickers. It would be difficult for them to compete with American producers in the American market, given the difference in transportation distances and other factors. There would be little incentive for consumers to buy their product from unsavory Mexican criminal syndicates when legitimate domestic firms could offer the drug at a competitive price—and advertise how they are honest enterprises. Indeed, for many Americans, they could just grow their own supply—a cost advantage that the cartels could not hope to match.

It is increasingly apparent, in any case, that both the U.S. and Mexican governments need to make drastic changes in their efforts to combat Mexico’s drug cartels. George Grayson aptly summarizes the fatal flaw in the existing strategy. “It is extremely difficult—probably impossible—to eradicate the cartels. They or their offshoots will fight to hold on to an enterprise that yields Croesus-like fortunes from illegal substances craved by millions of consumers.”

Felipe Calderón’s military-led offensive is not just a futile, utopian crusade. That would be bad enough, but the reality is much worse. It is a futile, utopian crusade that has produced an array of ugly, bloody side effects. A different approach is needed. The most effective way is to greatly reduce the “Croesus-like” fortunes available to the cartels. And the only realistic way to do that is to bite the bullet and end the policy of drug prohibition, preferably in whole, but at least in part, starting with the legalization of marijuana.

A failure to move away from prohibition in the United States creates the risk that the already nasty corruption and violence next door in Mexico may get even worse. The danger grows that our southern neighbor could become, if not a full-blown failed state, at least a de-facto narco-state in which the leading drug cartels exercise parallel or dual political sovereignty with the government of Mexico. We may eventually encounter a situation—if we haven’t already—where the cartels are the real power in significant portions of the country. And we must worry that the disorder inside Mexico will spill over the border into the United States to a much greater extent than it has to this point.

The fire of drug-related violence is flaring to an alarming extent in Mexico. U.S. leaders need to take constructive action now, before that fire consumes our neighbor’s home and threatens our own. That means recognizing reality and ending the second failed prohibition crusade.

Author's highlights:

The victims in Mexico’s increasingly chaotic, violent drug war come from all walks of life, including police officers, soldiers, and elected officials.

The chaos is worst in the border cities, such as Tijuana and Ciudad Juárez, but that plague is spreading to previously quiet areas.

A number of business and political elites are so worried about the security environment that they have sent their loved ones out of the country.

The drug cartels might be targeting U.S. diplomatic and law enforcement figures, but ordinary Americans also are at risk when they travel or work in parts of Mexico.

Mexican domination of the drug trade in the United States carries the risk that turf battles in Mexico could become proxy wars in U.S. communities.

Combating traffickers in Mexico and other source countries is at best a brutally uphill struggle, and at worst a futile, utopian crusade.

The Mexican organizations are taking control of trafficking routes and gaining access to potential markets in portions of Sub-Saharan Africa and the Middle East, as well as in Europe.

At best, efforts at domestic demand reduction have achieved only modest results, and the supply-side campaign has been even less effective.

Drug warriors point to Colombia as a model of what can be done in Mexico. But the success story in Colombia is neither as simple, nor as complete, as they want us
to believe

The task facing the Calderón government and its allies in Washington is not merely to defeat two cartels, as was the challenge in Colombia, but to defeat multiple powerful organizations.

Prospects for a policy of accommodation, or “appeasement,” are dim, even if Calderón would countenance it—which seems very unlikely.

There is only one policy change that would have a meaningful beneficial impact: ending the prohibitionist strategy and legalizing currently illegal drugs.

The notion that usage rates of currently illegal drugs would rival those of alcohol and tobacco if prohibition were abandoned is shockingly simplistic.

Disenchantment with the drug war is growing within Mexico’s political elite.

Unless the possession, production, and sale of drugs is legalized, the black-market premium will still exist and law-abiding businesses will still stay away from the trade.

If Washington abandoned the prohibition model, it is very likely that other countries in the international community would do the same.

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25 Borderland Beat Comments:

Anonymous said...

I agree.. not to mention the thousands of people who are sentenced to prison for selling drugs / using drugs. Drugs are here to stay people.. and millions of people use them and admit to using, there are millions who also deny using drugs because they are illegal.

you would be surprised the amount of people who support recreational drug use but cannot stand up and say so because they don't want to go to jail, lose their job, lose their families, ect.

legalize it

Anonymous said...

Whoever wrote this article is concerned only with the welfare of the elites.
Until the elites are removed from power, things in Mexico will only get worse even if all drugs were legalized.
Civil war in Mexico is already happening.

Anonymous said...

USA has no need or desire to end the drug war. It is in their interest to keep it going whether for "dumbing down" of a population in the USA or in the selling of arms. USA is the worlds largest importer of illicit drug and the worlds largest exporter of war. They want it to continue. PERIOD!

Anonymous said...

I wish I could boycott Mexico out of existence.

Anonymous said...

Good idea. If you can't beat 'em, join 'em. But why stop with pot? If you legalize meth and heroin and cocaine and E you can really put a hole in the cartel profits. Then, you can legalize murder and extortion and kidnapping and robbery and you will have put the bastards out of business completely.

Hell I don't need the fucking Cato Institute to figure it out for me.

The problem is that a lot of Mexicans and a lot of Americans are making a lot of money the way things are. They don't want to change anything. They just want to talk about it and bust a few wetbacks with a few kilos of dope. Have a bunch of meetings, have non-violent protests, quote Gandi, negotiate. Sure negotiate with wild animals.

Just because they wear suits doesn't mean they won't cut your throat for what's in your pocket.

Anonymous said...

US loves it's pot, and rightfully so. It amazes me that the US can spend billions to stop people from enjoying the benefits of a plant, but has no problem with alcohol. Imagine the room in the jails and court systems that would be freed from the decriminalization of pot, alone. In no way should coke or meth EVER be legal, but another approach needs to be tried. And people who abuse opiates and other drugs need help, not prison. Although it might scare a few "straight", most small time criminals with drug issues go to prison and come out with a Masters Degree in how to score. Pot and alcohol should be distributed and regulated the same, and those with substance abuse problems should get help.

And I agree with 11:15. As soon as the money starts to trickle to the cartels, the extortion and kidnapping will skyrocket. As bad as that may be, it will at least be the beginning of the end for the cartels. Whatever honest people left in Mexico will be fucked.

Anonymous said...

So by this logic, Mexico should allow the legal importation of all firearms. I mean the price of guns is obviously inflated by the illegal marketing just like your claim for the US status on Drugs right?


And while you are at it, how about making your laws toward outsiders friendlier as well. Mexico arrests thousands each year for illegal entry, that too would go away if they adopted friendlier US style laws. Finally you could even make it legal for foreign citizens to directly own property in Mexico (hey it's legal in the US).

/but this won't happen and the cartels are not going away because the bottom drops out of the drug market.

Anonymous said...

The point that most everyone misses: If we legalize then the DEA budget could be cut in half or more...The Feds dont EVER want to decrease a budget, they want to increase it, at least under Democratic Rule. How about keeping the BILLIONS we now send to Mexico in support of thier Drug War ??? Seems we could keep that money here for awareness campaigns etc!!

Buela said...

The link did not work for me :(

Anonymous said...

its amazing that people can comment on mexico who have never been to the country and have no direct knowledge of what really is happening there boycott mexico ??? a very smart comment really dude??

Anonymous said...

This might have merit if the cartels only had one stream of revenue. But they have diversified and their criminal money making ventures go way beyond just drug sales. These are not just drug cartels, but organized crime corporations, and they would not go away quietly if drugs were legalized.

The other thing that this paper fails to mention is that alcohol is not a success story when it comes to the end of prohibition. If anything we now have corporations and governments that benefit from a population's addiction to alcohol. How is that a good thing?

Not to mention that the World Health Organization put alcohol related deaths at 2.5 million this year alone!

Anonymous said...

Legalize drugs...? Then what... The problem is not the drugs or the guns its the greed for someone always wants to have more power then the rest of the herd. But a lil coke money here and there dont hurt and since their is not a camera on every corner like in the US hell why not kill rape torture kidnap. What momma dont know dont hurt momma

Gerardo said...

The link to the complete article should work now :)

Anonymous said...

Brilliant, absolutely brilliant....!

Anonymous said...

How can you legalize drugs in the welfare state of the USA?? The USA is broke it can not effectivley borrow money any longer,the population is weak,urbanized,politically corrected,the economy is declining,the govt can no longer INFLATE it with borrowed money. When you legalize drugs you will create a huge layer of beauacracy ,the welfare system will swell, HOW CAN WE PAY FOR MORE DEADBEATS? END THE WELFARE STATE then legalize every drug known to man, I'm OK with that.

Anonymous said...

Legalize drugs? Then what will the DEA, CBP, local LE, the politicians do for bribes? I mean that's their mother's milk - they're already on the cartels' payrolls. Like Mexico the US is already a narco-state - stupid gringos just don't realize it!

Anonymous said...

The DEA would have plenty to do with regulation and control of the drugs. The layering of state and local drug agencies would not be needed. ICE could be resolved and transitioned to Border Patrol.

The US prison count is the cost we can no longer afford. There are 200,000 in inmates in Texas prisons alone not to mention those in county jails awaiting trial. Put that into a nation wide count and what is it? Maybe 5 million. This at a cost of $35,000 a year not including the welfare costs of families of those in prison. That alone could turn the budget around.

Create an agency to rediscover "Made in the USA" and reward companies for manufacturing in the US. Use inmates transitioning from prison to create an electrical grid nation wide to develop wind and solar energy and become a manufacturing super power. Move away from the Super Power of War.

But most of all, do away with a Pentagon with 4 huge branches of military leadership. Why do we need 4 huge overly paid branches of leadership quadruplicated. Leave the four branches but shit can all the brass. I have always thought the Army and Marines were a duplication just as ICE and the Border Patrol are.

We will see marijuana legalized within 3 years, maybe 2. It might take 8 for the rest. But these 20, 30 and life sentences for drugs will have to change. It is a common practice when budgets get cut, so do inmate counts. I remember a time when inmates in Texas were getting so much good time that they were averaging doing 23 days on each years sentence. We will soon see this come about again. I don' know about you, but I personally don't want to support a system for locking up a second time caught crack addict for 25 years. I personally don't care if they want to be a crack head. I can say, there isn't much of a future in it.

Lets stop offshoring and produce it here like we use too. And lets put the same tariffs on other countries exporting to us, as they charge for ours. Lets get back to business and vote for true business minded leaders and get rid of the life long politicians, baby kissers, war mongers and lock em up Charley types.

I am tired of watching politicians do nothing for anybody but those worth 400 million while they walk around in their $3,500 dollar suits rationalizing why it is "just" and "fair" to break the backs of the common US citizens with increased taxes but important to keep the elite happy with a continued reduction in their taxes. How long are we going to play ignorant to their games and fall for their propaganda about the War on Drugs? I guess until we are so broke, no other nation will bail us out. China has problems of their own now and we already borrowed against our underwear from them because that was the last thing we had.

Anonymous said...

Always good to feel the hate from all you MExicans

Anonymous said...

Thanks, reporter Gerardo. It was a breath of fresh air to see the victory over Columbian cartels brought into question. There is still a monster pipeline of dope coming out of there. So if its not cartels slinging who is it and what do you call them? Perhaps it is country club grifters calling for law and order while they steal everything thats not nailed down. Me thinks this is whats behind the drug war in Mexico. The big dogs in the U.S and Mexico want all the pie.

Anonymous said...

@9:40 well hey this stupid gringo supports the effort for a better mexico until some moron like yourself comes along saying us stupid gringos don't realize our federal government is involved with drugs? uh hello, of course we realize our government has had drug scandals over the years.

but when people like you open your mouth it makes me not even give a shit about you or your country. stupid gringos. help yourself before you call us stupid

Anonymous said...

In Holland light drugs is tolerated (i.e. sale and consumption is not persecuted) since 20 years. The result? The consumption of these drugs is LOWER than in neighbouring Enlgand where it is persecuted. WHY? Because the dutch consider doing drugs uncool and a sign of being a looser.

Anonymous said...

This author must not read anything that isn't written by him because legalizing marijuana would do nothing. Just because we made the mistake of bringing the hooch back to life, its automatically the only answer to legalize Pot. Look at any medical cannabis state. Tell me or anyone that cartels still don't have a presence even with all the "legit" business goingg on. Face it USA's War on Drugs is the only thing keeping this all going. Portugal has everything legal. Heroin, coke, crack. They will even give u a clean needle and how to pamphlet. Are americans just stupid or addicts? The solution is complete anhilation of any cartel and any gang in the americas. Prevent the blood from spilling over, otherwise you'll see an america with drug induced deaths skyrocket on a daily basis. One last point. Who do you think is going to do the hard work of preparing these illicit drugs if they are legalized? What about the shipping and protection from competitors, it is a free-market now. Spare us your hippie dream solutions. Bear arms and kill some terrorists.

Anonymous said...

Let's face it you Americans and Mexicans are all a bunch of lowlifes and deserve the problems you have. Que bueno.

Anonymous said...

@ November 21, 2011 10:28 PM .Baby,you are talking common sense,aint no politician motherfucker gonna listen to common sense.They like the status quo just the way it is,they work hard to get it this way,and they gonna keep it this way.

Anonymous said...

This document is Undermining Mexico, not Undermining Mexico's Drug Cartels. First marijuana then cocain etc.

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