Narconomics | Tom Wainwright

Summary of: Narconomics: How to Run a Drug Cartel
By: Tom Wainwright


In the sea of the global drug industry, where supply, demand, and profits reach astronomical heights, the book ‘Narconomics: How to Run a Drug Cartel’ by Tom Wainwright delves into the intriguing world of drug cartels and their convoluted relationship with governments. The summary outlines the complex dynamics and strategies employed by cartels, while revealing the shortcomings of the United States’ war on drugs. This eye-opening journey uncovers the surprising similarities between cartels and legitimate businesses, such as revenue generation through offshoring, product diversification, and advertising tactics. Prepare to gain a unique perspective on how cartels function, adapt and maintain a stranglehold on the drug market.

A Flawed War on Drugs

The US government’s “war on drugs” has failed to reduce drug production and consumption. By focusing on supply-side attacks like crop dusting, the government has only caused the cartels to shift operations to other countries. Moreover, impoverished farmers are targeted instead of the cartels, and consumers end up paying more for the same amount of drugs, leading to a growth in revenue. This flawed approach does not tackle the real root of the problem, and the drug industry continues to flourish.

Legalizing Marijuana for Economic Benefit

The US marijuana industry generates an estimated $40 billion annually, with $7 billion coming from the legal market. Legalizing marijuana’s economic advantages include weakening drug cartels, generating revenue through taxation, and improving product quality by allowing horticulturalists to experiment with different plants and techniques. The government’s supervisory role also ensures consumer safety and offers a variety of products. By focusing on the customer side rather than the supply side, both governments and consumers benefit.

Cartels: Competition vs. Collusion

In the book, we explore how cartels operate, from government relationships to their treatment of each other. Economic theory suggests that cartels can either compete or collude. In Mexico, brutal cartel wars have caused the deaths of tens of thousands of people. In contrast, in El Salvador, cartels collude, which has resulted in a reduction in violence and murder despite high drug prices. Ultimately, collusion appears to be the better option for society, as it results in less violence and murder.

Cartel Recruitment Strategies

Cartels often recruit new employees from prisons, where inmates struggle to find jobs after release. The Mexican Mafia provides work for new inmates inside the prison, and jobs in trading and smuggling drugs once released. To prevent theft, cartels use a hierarchical structure of generals, captains, lieutenants, and soldiers. This structure ensures that lower-ranking members hold their superiors accountable, preventing abuse of power and creating employee loyalty.

Cartels’ Strategic Social Responsibility

Businesses and drug cartels alike demonstrate social responsibility as a strategic public relations ploy to look good and outdo their rivals. Drug cartels market themselves better through decrying drug-related violence in their communities and serving as protectors and patrons filling voids left by failing public services. Offering “drug alms” or narcolimosnas, paying fees for hired protection, and funding construction of churches and chapels are just some examples of cartel’s measures to give back to the community. These actions make them look like heroes despite their unsavory line of business.

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