'Narconomics' Explains How the Mexican Drug Cartels Operate Like Wal-Mart and McDonald's NPR.org
go to original February 16, 2016

Narconomics: How to Run a Drug Cartel by Tom Wainwright Check it out on Amazon.com

When Tom Wainwright became the Mexico correspondent for The Economist in 2010, he found himself covering the country's biggest businesses, including the tequila trade, the oil industry and the commerce of illegal drugs.

"I found that one week I'd be writing about the car business and the next week I'd be writing about the drugs business," Wainwright tells Fresh Air's Terry Gross. "I gradually came to see that the two actually were perhaps more similar than people normally recognize."

During the three years he spent in Mexico and Central and South America, Wainwright discovered that the cartels that control the region's drug trade use business models that are surprisingly similar to those of big-box stores and franchises. For instance, they have exclusive relationships with their "suppliers" (the farmers who grow the coca plants) that allow the cartels to keep the price of cocaine stable even when crop production is disrupted.

"The theory is that the cartels in the area have what economists call a 'monopsony,' [which is] like a monopoly on buying in the area," Wainwright says. "This rang a bell with me because it's something that people very often say about Wal-Mart."

Wainwright describes his new book, Narconomics, as a business manual for drug lords — and also a blueprint for how to defeat them. When it comes to battling the cartels, Wainwright says governments might do better to focus on controlled legalization rather than the complete eradication of the product.

Read the interview at NPR.org

Related: How Mexican Drug Cartels Earn Billions in Drug Trade (Latin Post)

Related: The Catholic Church and the Irresistible Power of Mexico's Narco Culture (The Los Angeles Times)

Related: Mexico's Drug Trade: How It Affects Mexican Society & the Catholic Church (Latin Post)

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