Wednesday, January 30, 2008

Los Niños de Los Zetas

Will the children and grandchildren of Los Zetas become Mexico's version of the Kennedys, parlaying a prohibition-generated fortune into multi-generational wealth and political power?

I mentioned yesterday that both criminality and affluence tend to run in families. In Mexico, George Friedman from the corporate intelligence company Stratfor says they often run in the same families, and will for several generations thanks to the lucrative drug trade:

The current efforts by the Mexican government might impede the various gangs, but they won’t break the cartel system. The supply chain along the border is simply too diffuse and too plastic. It shifts too easily under pressure. The border can’t be sealed, and the level of economic activity shields smuggling too well. Farmers in Mexico can’t be persuaded to stop growing illegal drugs for the same reason that Bolivians and Afghans can’t. Market demand is too high and alternatives too bleak. The Mexican supply chain is too robust — and too profitable — to break easily.

The likely course is a multigenerational pattern of instability along the border. More important, there will be a substantial transfer of wealth from the United States to Mexico in return for an intrinsically low-cost consumable product — drugs. This will be one of the sources of capital that will build the Mexican economy, which today is 14th largest in the world. The accumulation of drug money is and will continue finding its way into the Mexican economy, creating a pool of investment capital. The children and grandchildren of the Zetas will be running banks, running for president, building art museums and telling amusing anecdotes about how grandpa made his money running blow into Nuevo Laredo.

It will also destabilize the U.S. Southwest while grandpa makes his pile. As is frequently the case, it is a problem for which there are no good solutions, or for which the solution is one without real support.

Interestingly, Friedman seems to think that legalizing drugs would be the most effective solution to limiting cartel power, to "allow easy access to the drug market for other producers, flooding the market, reducing the cost and eliminating the economic incentive and technical advantage of the cartel." But that's a "political impossibility" in the US, he says. Still, the notion that the Zetas' grandkids will consider it quaint that grandpa was running blow to Texas implies that Friedman sees drug legalization as a perhaps inevitable long-term solution.

Friedman's article is an excellent, honest assessment of the problem and well worth reading the whole thing. Via Blood and Treasure.

See related recent Grits posts:


el_longhorn said...

Very good piece. There are no good solutions, but there are better and worse alternatives.

First, legalize immigration to and from Mexico. This funnels all Mexican immigrants through legal points of entry where they can be inspected and greatly reduces illegal crossings. This allows the Border Patrol to focus on drug smugglers and the small number of Mexicans that would not be able to legally enter the US, due to criminal record or other problems. This would also reduce the incentive for Mexican farmers to turn to drug production, since coming to the US to work would be a more realistic option.

Second, legalize marijuana. This would allow US law enforcement to focus on harder, more dangerous drugs and wipe out an important source of income for the Mexican cartels. Cocaine is the #1 drug in terms of profit for the cartels, but cutting the marijuana income would still hurt them.

Third, in return for immigration concessions, Mexico allows US customs inspectors to operate in Mexico to help pre-screen and clear cargo entering the US. This helps deter smuggling without the massive inefficiencies that border checkpoints cause.

Fourth, the US needs more money for treatment of addicts.

The drug problem in the US will not go away, but these steps could reduce the violence and much of the harm associated with the drug trade.

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