NARCONOMICS summary

Introduction

Narconomics by Tom Wainwright Tom Wainwright explains how drug cartels run their operations like highly organized, rational multinational corporations. What if the most effective way to defeat drug cartels is not by fighting them with weapons, but by understanding them as businesses? Imagine a multinational corporation with advanced human resource strategies, global supply chains, local franchising models, and public relations campaigns accept its products are illegal drugs. In Narconomics, Tom Wainwright takes us on an economic journey inside the global drug trade, showing how cartels behave like big brands, and why our current drug policies are set up to fail.

The U S government’s efforts to attack the supply side of the drug industry are flawed.

The U. S. government's efforts to attack the supply side of the drug industry are flawed. It was in 1971 that then U.

S. President Richard Nixon launched the war on drugs. Between then and now, drug incarceration rates have shot up exponentially in the United States. But the amount of drugs being produced and consumed globally has not decreased.

In fact, there's more money in the drug market right now than ever before. How is this possible? Presumably, the U. S.

government wanted to tackle the drug problem at its root. As such, drug policy has been designed to attack the drug industry in one area supply. Take crop dusting in South America. For instance, South American countries are an important source of many of the drugs that enter the United States.

So, the U. S. government entered into agreements with these nations to crack down on the farming of coca leaves by crop dusting them that is, spraying pesticides on crops from low-flying plains to destroy them. This seems like a logical fix, right?

After all, it'll be harder for the drug industry to flourish if it doesn't have the supply to meet demands. Unfortunately, things aren't so simple. This approach has led to what researchers call the balloon effect. The phenomenon gets its name from the way that, when one part of a balloon is squeezed, the air inside moves.

But the volume of the air itself doesn't decrease. Like air inside a balloon, cartels can also move around, in this case from one area of South America to another. When one government cracks down on coca crops, cartels just pack up and move to another country. As a result, the problem keeps moving around, but never really disappears.

That's not the only issue with the U. S. government's approach. Their supply-side attack targets farmers, without ever directly confronting cartels or consumption two aspects without which the drug industry wouldn't exist.

Cartels can be described as monopsonies, that is, single buyers. Cartels decide how much to pay farmers, who are essentially at their mercy. By targeting impoverished farmers and not the cartels, the U. S.

war on drugs hardly gets to the real root of the problem. What's more, when supplies decrease, consumers become okay with paying more for the same amount. Therefore, yearly revenue generated from drugs will remain the same or grow, even if supply decreases.