The Market Is Not Magic

Stephanie Leutert engages in a detailed takedown of an op-ed by Mario Berlanga, in which Mario argued that lowering the demand for drugs in the United States would lower the level of violence in Mexico. Stephanie notes:

Mexico’s organized criminal groups are no longer mere drug traffickers, whose singular revenue streams would disappear if Americans kicked their drug habits. Instead, over the past decade, Mexico’s criminal groups have moved rapidly into a wide range of illicit activities, such as extortion, stealing oil, kidnapping, and taxing migrant smugglers. They’ve even gained a foothold in what used to be informal or even legal markets: pirated CDs, limes and avocados, and used cars, for example.

But I think Stephanie’s nuance missed the big old rock sitting in the meadow. If we make the assumption that the gangs get most of their revenue from the American drug trade, which Stephanie clearly doesn’t agree with, then what happens if demand lessens?

The market shrinks.

Cash flow shrinks.

And, if you’re a violent gang, do you just peacefully give up and walk away? Back to poverty as a way of life?

Of course not. The competition is cutting into your potential cash flow – so it’s time to snuff them. Violence will increase until the supply of victims becomes small enough that it can’t continue at that rate.

This is an ideal situation, with many assumptions. If Stephanie’s description is congruent with reality, and I have no reason to think otherwise, constricting the American demand for drugs may not have much of an effect. Even in a legitimate market with companies, there are struggles both legal and illegal. Change is violence folks, and sometimes it’t not metaphorical.

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About Hue White

Former BBS operator; software engineer; cat lackey.

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