In today’s Wall Street Journal, the editors address the recent murder of some Americans in Mexico by a gang. Although the reports I’ve read (here’s one example) claim that it was a drug gang (everyone misuses the word “cartel”), I haven’t seen enough evidence that it was. I suspect, though, that the odds are high that the murderers were part of a drug gang.
What has been fantastic about the Wall Street Journal‘s unsigned editorials on economics over the years I’ve been reading them (since late 1972), is how economically literate they usually are, often going beyond the “seen,” to use Frederic Bastiat’s term, to look at the “unseen.” They don’t do that in this editorial. Or, more correctly, they don’t do it well. The “unseen” cause they discuss is drug buyers; the unseen cause they leave out is the U.S. government.
The editorial is titled “The Cartelization of Mexico,” and the line underneath that sums up the intended message is “American drug users are complicit in the murder and mayhem.” The idea is that even if you are a peaceful user of illegal drugs that come from Mexico, you are complicit in the murder conducted by the drug producers and distributors.
Let’s not get away from the fact that is sometimes lost in discussions, that the people responsible for murder are . . . the murderers.
It is true that if no one here or anywhere else bought illegal drugs, there would be virtually no illegal drugs and, therefore, no drug gangs.
But if we want to assign “complicity,” there is an organization that is clearly complicit in the murders: the U.S. government. The U.S. government is the main entity that makes drugs illegal in this country and that makes deals with other countries in Latin America to enforce drug laws there. If drugs were completely legal, there wouldn’t be illegal drug gangs.
Almost everyone understands the point above if in the above discussion, we substitute another drug, alcohol, for illegal drugs. When alcohol was illegal in this country, there were “alcohol gangs.” No one was so confused about the issue to call them “alcohol cartels:” they were intensely competitive. In the infamous Valentine’s Day Massacre, on February 14, 1929, Al Capone’s alcohol gang murdered 7 people in Chicago, 5 of whom were members of Bugs Moran’s North Side alcohol gang.
After Prohibition was implemented, the murder rate in the United States rose and after it ended, it fell. It turns out that there’s some controversy about whether Prohibition was a major factor in the murder rate. But even if it wasn’t major, it was a factor. And, to the current discussion, does anyone think that the murder rate in Mexico wouldn’t fall if drugs were legalized?
And isn’t ending the current prohibition much better than what the Journal‘s editors suggest as a plausible response: a U.S. military operation in Mexico?
One note on numeracy:
In that editorial, the Journal editors write: “Homicides reached a new high of 36,000 in 2018 and this year murders have averaged 90 a day.”
Translation: The murder rate per day in 2019 so far is 9% below the murder rate in 2018.
I leave it to you to think about why the editors wrote it the way they did.
READER COMMENTS
Mark Z
Nov 6 2019 at 3:58pm
I don’t think the term ‘cartel’ is a complete misnomer. Armed, violent gangs aren’t just purveyors of illegal goods. In fact often their main purpose is to prevent competition within ‘their’ territory, where only members – or nonmembers who pay a tax – are allowed to participate in the market. Especially when there is a surfeit of people willing to produce or sell drugs anyway, such organizations sometimes amount to groups of armed criminals extorting unarmed criminals. Even members of criminal organizations that directly participate in the market tend to do so with the advantage of their competition being violently suppressed by their organization.
Of course, with a few historical exceptions, most drug cartels don’t have enough market share to have much control over prices. Perhaps they’re more analogous to governments than cartels; like governments, they constantly feud with each other to preserve or expand their tax base while using violence internally to privilege supportive rent seekers in local markets.
Jon Murphy
Nov 6 2019 at 5:31pm
Which would make them a monopoly. A cartel is an agreement among independent firms to restrict output (and thus keep prices high). The drug gangs do not have any output-restricting agreements. They violently compete against one another
David Henderson
Nov 6 2019 at 9:16pm
What Jon Murphy says above plus this:
Let’s say a bunch of airlines get together and form a cartel. It includes American, United, and Delta. You call them a cartel. You don’t call American or United or Delta a cartel. They’re members of a cartel.
Thaomas
Nov 7 2019 at 8:09am
I think a tad of shaming is not inappropriate. It’s properly done against us who eat slaughtered animals. Granted the big point is that the USG not only enforced a ban on the importation of certain drugs, but has coerced foreign governments to try to restrict the activities of people who are trying to evade that ban. It’s the coercion of foreign governments more than criminalization of the the “drug” market that does the damage to those countries.
It would be interesting to know if the US had that policy during prohibition and had a similar effect in Canada and Mexico. Does any know that history?
David S
Nov 7 2019 at 7:32pm
To play devil’s advocate:
Under current policy, 36,000 people die per year (2018 data) of drug related murder. Most likely, the vast majority would not have died if drugs were legal.
Under current policy, 70,000 people died per year due (2017 data) to drug overdoses. It is realistic that if drugs were made legal that number could increase by 50%.
So it may be that having drugs be illegal is the optimal response.
(Not that I believe that, or that I believe that the overdoses would go up 50% – but that is about what you’d have to assume to make current policy rational, and it doesn’t seem too outlandish?)
I guess to put it another way, the number of alcohol related deaths (88,000 per year in 2006-2010) probably exceeded the number of Capone/alcohol gang related deaths (1,000 per year in 1920s). The population has only risen by about 3x, while the ratio is 88x.
So, baring freedom having value for its own sake, prohibition was the rational choice!
Comments are closed.