Narconomics: How to Run a Drug Cartel Kindle Edition

“Narconomics” is about how drug cartels are taking pages from the playbooks of big businesses like Walmart and Coca-cola. In cases like diversifying into new markets or deciding to collude with a competitor, this might not seem surprising. However, it may come as a shock to find out about the franchising and CSR (corporate social responsibility) practices of drug cartels. Other than being outside access to the justice system, and thus resorting to violence to achieve what contracts, mediators, and courts would do for other businesses, the drug business it turns out is very much a business.Along the way a secondary story emerges that is just as interesting and even more important. It’s the story of how the drug war makes no sense from the standpoint of economic logic. Destroying fields in South America only makes for poorer farmers because their monopsonistic (i.e. single buyer) market pushes the cost of lost crops back onto them. And because raw product is such a tiny portion of retail price, their destruction has almost no effect on prices at the user end. Furthermore, as more US and European states legalize marijuana, it seems that this will have more of an effect at putting cartels out of business and ending their reign of violence than all the arms shipments and foreign aid for drug enforcement ever had.The book consists of ten chapters, each of which addresses an area of business practices that have been taken up by the drug cartels. Chapter one is about supply chains, and in the case of cocaine there is a rather long one. The raw product is grown in South America and must be infiltrated into the US—usually through Mexico. (For a while there was a prominent Caribbean route, but it was shut down—at least for a while.) This is where we learn about how the cartels adapt to eradicated crops, as well as how the product is marked up at various stages of the operation.Chapter 2 is about the decision to compete versus collude. We mostly read about the competition, because in a lawless market competition equals violence. However, over time cartels have been increasingly willing to agree on distribution of territory. Although, there are also clever means to compete unique to criminal enterprises, such as engaging in violence in someone else’s territory to cause the police to crack down there—thus making it harder for said opposition.Chapter 3 is about human resources, and the different approaches used to handle problems in this domain. In the movies, an drug cartel employee who fouled up always gets a bullet to the brain, but it seems that this isn’t always the case—though it certainly happens. Different countries and regions have differing labor mobility. In some cases, there is no labor mobility. (i.e. if one has a gang’s symbols tattooed all over one’s body, one can’t interview with a rival gang and Aetna sure as hell isn’t going to hire you.)Chapter 4 is about public relations and giving to the public. One doesn’t think about drug lords engaging in CSR, but in some cases they may be more consistent with it than mainstream businesses. The cartels face an ongoing risk of people informing on them, and at least some of those people can do so without their identities becoming known. Violence is often used to solve problems in this domain, but it can’t do it all. That’s why drug lords build churches and schools, and often become beloved in the process.Chapter 5 explores “offshoring” in the drug world. This may seem strange, but drug cartels, too, chase low-cost labor. But it’s not just about lowering costs, it’s also about finding a suitable regulatory environment—which in the cartel’s case means a slack one. An interesting point is made that all the statistics on doing business are still relevant to the drug business, but often in reverse. That is, if Toyota is putting in a plant, it wants a place with low corruption, but if the Sinaloa want to put in a facility--the easier the bribery the better.Chapter 6 describes how franchising has come to be applied to drug cartels—famously the Zetas. The franchisor provides such goods as better weaponry in exchange for a cut of profits. Of course, there’s always a difference in incentives between franchisors and franchisees when it comes to delimiting territory, and this doesn’t always work out as well for drug dealers as it does for McDonald’s franchisees.While the bulk of the book focuses on cocaine and marijuana, Chapter 7 is different in that most of it deals with the wave of synthetic drugs that has popped up. The topic is innovating around regulation, and so it’s certainly apropos to look at these drugs. If you’re not familiar, there are many synthetic drugs that are usually sold as potpourri or the like. Once they’re outlawed, the formula is tweaked a little. In a way, these “legal highs” may be the most dangerous because no one knows what effect they’ll have when they put the out on the street.In chapter 8 we learn that the drug world hasn’t missed the online retail phenomena. Using special web browsers, individuals are able to make transactions that are not so difficult to trace. In an intriguing twist, the online market may foster more trust and higher quality product than the conventional street corner seller ever did.Chapter 9 examines how drug traffickers diversify—most notably into human trafficking. Exploiting their knowledge of how to get things across the border, they become “coyotes.”The last chapter investigates the effect of legalization, and it focuses heavily upon the effects that Denver’s legalizing marijuana has had in Denver, in the rest of the country, and on the cartels. Wainwright paints a balanced picture that shows that not everything is perfect with legalization. E.g. he presents a couple cases of people who ingested pot-laced food products intended for several servings, and did crazy stuff. However, the bottom line is that legalization (and the regulation and taxation that comes with it) seems to be the way to go if you want to really hurt the cartels and stem the tide of violence, as well as to reduce the number of people showing up at the ER having ingested some substance of unknown chemical composition.There is an extensive conclusion, about the length of one of the chapters that delves into the many ways our approach to eliminating drug use is ill-advised and dangerous. This connects together a number of the key points made throughout the chapter.I found this book fascinating. Wainwright does some excellent investigative reporting—at no minor risk to life and limb. If you’re interested in issues of business and economics, you’ll love this book. If you’re not into business and economics, you’ll find this book to be an intriguing and palatable way to take on those subjects.

This fellow writes like a freshman economics student at one of the ubiquitous socialism -infested junior colleges. He is so proud of having mastered a few economic concepts that his hubris completely prevents him from recognizing the mental gymnastics he must perform in order to reach his utopian solutions. I read about a quarter of the book before I had to put it down due to nausea inspired by his preachy, arrogant and juvenile attitude. If this guy ever grows up and has to deal with a few real world issues, he might write a book worth reading. I regret the time l spent giving this one too many chances.

This books seems to be written by one author with two minds IMO. One writes thorough and gripping stories about the subject. The statistics regarding the problem are interesting and well thought out. However, I cannot understand why the last few pages of each chapter needs to be devoted to the authors so called solutions. How can you write pages and pages about the problem and then decide you can present a solution in 2 pages? At best he gives one anecdotal example of something that works. Invariably the solution has something to do with the government throwing money at the problem. There is almost no research or statistics done in this regard. This guy is clearly left wing and is imposing his political beliefs with no regard for statistics or data. It is shameful and lazy how he ruins such an entertaining book by cramming his political beliefs down the readers throat. It would be so much more intellectually honest to not include any of that if you don't want to do it right and make a real case.

This is a fact based, rational examination of how drug cartels operate and by implication, why they continue to thrive. Although the author speaks in terms of the economics of a drug based business, one is logically lead to the inescapable conclusion that our past and current efforts to eradicate the drug trade are woefully misguided. This book is an enlightening and eye-opening dissection of narco economics. If you've ever wondered why the "War on Drugs" has been lost, you'll find a very entertaining and logical answers in the reading of this book.

It’s a good book but not great. You can see the author has been clueless on the topic initially but has done a lot of research to compile the book and he’s managed to get some good info on a number of occasions yet it’s clear his own understanding and outlook on the topic is still somewhat lacking. Still a good read none the less but it could be better had it been written by someone different imo.I did get a shock listening to the book at one stage as it unexpectedly mentioned the website me and my friends made use of to assist with our studies in this particular field, the wonderful officialbenzofury.com - had he reached out to the operators of this site I believe he could have had a better viewpoint which would have allowed him to write parts of the book with more understanding, particularly regaridng the feelings and motivations concerning the many libertarians in the space.Drugs should undoubtedly be legalised, whichever side of the fence you may find yourself it’s clear legalisation is the only route that works for society!If you believe drugs are dangerous and harmful to society a legalisation framework would both make them safer and society considerably better.If you believe people should have that right to do what they wish with their own bodies, whether for pleasure, bio hacking or medicinal purposes then of course legalisation is the preferred route.Let’s make drugs, users and society as a whole safer by introducing a legal framework that would ensure quality control standards, remove criminals lacking care and compassion from the supply chain, increase awareness and correct information concerning the affects of each drug, allow addicts (addition is about the individual, not drugs! The majority of peope who use drugs are NOT addicts, same as the majority of people who eat food are not addicts but we also have many addicted to food amongst us!!) the help they need and deserve without fear of criminal prosecution, allow our polices forces to focus on true crimes & criminals that hurt individuals terribly such as paedophile, rapists, traffickers etc, stop wasting extreme sums of money ie billions and trillions on the failed ‘war on drugs’ and put these funds along with the immense tax revenues that would be generated to use to make society better, let’s allow people to escape depression and find a cure for many other ailments where dr’s have failed their desperate patients, let’s allow research scientists and bio hackers the ability to make new discoveries for the field of medicine and general human wellbeing without harsh, restrictive licencing requirements let’s allow people to use a substances to reduce pain, anxiety etc to make themsleves feel happy, relaxed etc when they desire without fear of harsh judgment or repercussions, particularly considering alcohol is often the legal alternative despite being considerably more dangerous than 99% of drugs and often having a profoundly negative impact on the user and their surroundings.When this day comes and it will come, the tax revenues will ensure that is the case!, only then will we find ourselves in a better society....In the meantime please consider where your beliefs, particularly prejudices, regarding drugs have been obtained, is it via a government’s sinister self serving false and flawed narrative? That was certainly the case with myself along with teachings from family with good, albeit flawed intentions but a little research goes a long way and can open the eyes of anyone lacking in the true facts of the matter, making for more tolerant, compassionate thinking and actions - isn’t that what the world truly needs?Best Wishes to one and all :)

I was (wrongly) recommended this book as an insight into how the drug cartels used practices that traditional businesses could adopt. In fact it describes how their activities resemble them ... and so much more.The book is thoroughly researched, authoritative and very well-written. I had no intention of reading a book about the drugs industry, but once I started, I couldn't stop (addictive?)Highly recommended as an insight into how it all fits together- and how it can be combated.

Not the usual commodity markets that I read about, but this book is certainly one of the most interesting and well written. From why drug cartels are a lot like Walmart managing their supply chain, how cartels operate much like multi-national companies, why efforts to disrupt the supply of drugs is so fruitless and finally to the impact that legalisation (when done correctly) can snuff out the illegal drugs industry this book has everything any self respecting management consultant to the illegal drugs industry needs. The author takes you on a fascinating journey through some of the most dangerous places in the world where drugs are grown and manufactured all the way to the end users. A welcome boost for how and why economists and economics in general have something very useful to say about how the world could be a better place.

This is a great read and having seen the futility of the ‘war on drugs’ where the farmer who gets $100 a kilo loses everything whilst the main culprits make on misery. I wonder if our elected officials will ever change mindset? Judging by their inability to settle trade agreements I doubt it.

It is amazing how the writer looks at the Narco’s just like any other organisations. Very good read