The drug trade embodies a ruthless logic. In a world where governments have limited resources, and the financial incentives for trafficking are great (90% of a cocaine shipment can be “lost” and the endeavor is still profitable), slaying the industry can seem impossible. If demand remains strong, successful governmental action— arrests, seizures and eradication—pushes the street price up, incentivizing new players. Supply and demand works with merciless efficiency when it comes to illegal drugs.
The drug trade also has a distinct “ballooning effect.” Efface it here and it pops up there. This was evident in the Andes in the 1990s, as coca eradication policies in Bolivia and Peru resulted in the retrenchment of the industry in Colombia, even after the fall of the Cali cartel. Now a form of ballooning is gripping North America.
Since instituting a “surge” against drug cartels, President Calderon’s plans are working, only to relocate the cartel’s operations to the Bahamas or US. A series of Department of Justice studies have concluded that Mexican operations now present the “greatest organized crime threat” in the US and American gangs are co-opting Mexican cartels to traffic cocaine and marijuana. Equally worrying, on May 6th, The Los Angeles Times reported the leader of the Sinaloa cartel, “El Chapo,” has given members of his syndicate permission to use deadly force in the US in order to protect its operations, which are more precious with every success Mexican law enforcement enjoys.
Gang violence has also spiked in Canada. This is “directly related” to crackdowns in Mexico, according to Pat Fogarty, a senior member of the Royal Canadian Mounted Police, interviewed in this week’s Economist. A spate of recent arrests in Mexico has disrupted the cocaine distribution chain to Vancouver, forcing street dealers to secure their supplies. “The price goes up and the guns come out,” states Fogarty.
A long-term solution will have to engage the supply-side of the equation. In February an op-ed in The Wall Street Journal concluded, “Latin American governments have followed US advice in trying to stop the flow of drugs from the point of origin. That policy has had little effect.” Massive amounts of US aid have been doled out to Colombia, Afghanistan and more recently Mexico. As a result, the world’s supply of drugs has scantly diminished while the violence associated with the drug trade is trending up in the US and Canada.
