When Cartels Are Cartels, Public Safety Wins

Moneybox
A blog about business and economics.
Aug. 20 2012 6:03 PM

When Cartels Are Cartels, Public Safety Wins

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Homicides are way down in Ciudad Juarez, which the Mexican government naturally attributes to its own successful policies. But not everyone is convinced and William Booth thinks local people have "another, more credible reason for the decrease in extreme violence: The most-wanted drug lord in the world, Joaquin 'El Chapo' Guzman, and his Sinaloa cartel have won control of the local drug trade and smuggling routes north."

To anyone conversant with economics, reading stories about the Mexican drug wars has long come with a bit of irony. The drug trafficking organizations are commonly known as cartels, but the horrific violence stems precisely from the fact that they aren't cartels. In a legal competitive marketplace in a country with an effective legal and law enforcement apparatus, firms compete by trying to offer a good value proposition to their customers. In an illegal market, firms can compete by trying to kill one another. And in Mexico, that kind of violent competition has been running amok leading to a massive body count. Insofar as you get true cartels—stable, anti-competitive arrangements—then a lot of the problems associated with the drug marke go away. There are no competitors to kill, leading to less violence and fewer risks to bystanders.

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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