Nearly every book about the drug trade suffers from one fundamental flaw: guesstimates about the financial and other figures related to drug trafficking. This is so even when academics pretend they are relying on solid data while actually making an ideological case about drugs (or America). But 34-year-old journalist Tom Wainwright, the Britain editor of the Economist and the magazine’s former correspondent for Mexico and Central America and the Caribbean, has a university background in economics, politics and philosophy, which makes for clear analysis and a creative approach to figuring out the realities of the underworld.
As one example of how the value drug seizures are falsely estimated by officials, Wainwright cites a Mexico City marijuana haul which US newspapers reported was worth over half-a-billion US dollars.
The actual value, says Wainwright, was probably more like US$10 million. That’s because all drugs have to be processed before being sold, so using the street value for crops destroyed, Wainwright points out, is like estimating the value of a steer based on the cost of a steak in a restaurant.
Throughout the book’s ten chapters, Wainwright applies economic concepts like monopolies and labour supply to show how the drug trade works. He deals not only with staples like marijuana and cocaine, but also designer drugs created in laboratories and discusses how the Internet has affected the trade in illegal narcotics.
Applying business models, Wainwright explains that “Cartels play a role more like that of large supermarkets, buying produce from farmers, processing and packaging it, then selling it to consumers.”
The book is also leavened with lively anecdotes and colourful characters. Wainwright writes that “Straightforward ineptitude is frequently the cause of drug traffickers’ downfall, according to the Home Office researchers, who noted that the ‘soap opera lifestyles’ of dealers and their associates were often what caused them to be caught,” In one such case, a courier who had to hand over US$500,000 in cash decided to put the bills on a bed and have sex with his 17-year-old outside woman, taking selfies while doing so. When the girlfriend showed the pics to the driver’s wife, the wife became so enraged that she tipped off the police about him.
Much of the book is devoted to showing why existing anti-trafficking polices aren’t working. For instance, Wainwright explains that destroying crops doesn’t raise the prices that wholesale farmers charge to cartels, because the armed groups that control the cocaine trade in Colombia act as monopsonies. That means that one group has a monopoly in specific regions, like cable companies in Trinidad and Tobago until recently. All that destroying crops does is make poor farmers poorer, says Wainwright, while the cartels’ profits remain the same.
Moreover, he cites figures showing that, from coca leaf to cocaine powder, the mark-up is more than 30,000 per cent. Put another way, even if destroying crops tripled the farmer’s price, the retail price in the United States would rise less than one per cent.
“This does not seem like a good return on the billions of dollars invested in disrupting the supply of leaves in the Andes,” Wainwright dryly remarks.
The final chapter is titled, with seeming egoism, “Why Economists Make the Best Police Officers.” But Wainwright’s book proves his core point as to why an economics approach rather than an ideological one will do most to reduce the ill effects of drug trafficking.
Review by
KEVIN BALDEOSINGH
BOOK INFO
Narconomics
Tom Wainwright.
Public Affairs, 2016
ASIN: B017QL8XKE; 290 pages