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Trevor Stone's Journal
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Drug Cartels as Enterprises and Corporations 
1st-May-2014 11:40 pm
intense aztec drummer DNC 2008
This TED talk by Rodrigo Canales draws parallels between prominent Mexican drug cartels and more ordinary businesses. Brand, markets, and social involvement all play a key role. Canales describes Los Zetas as a franchise business for ex-military members and local gangs. They're credited with many of the most gruesome killings in the drug war, and part of that is their brand. There are parallels here with Al Qaeda, which is also a franchise organization with an interest in tooting their own horn about how destructive they are.

Los Caballeros Templarios Guardia Michoacana (Knights Templar Cartel, successor to La Familia Michoacana) control some very important transit territory. They operate on a very local basis with social programs, and are loved by many in the communities. They portray many of their killings as community defense (petty criminals, local drug dealers, outside organized crime) and have played a significant role in local politics. This sounds to me a lot like Hezbollah, which operates schools, hospitals, and other social capital-building enterprises along side their long-running battles with Israel and arab governments. Other paramilitary organizations have had similar success with social programs and local support including the IRA and loyalists in Ireland and the Basque ETA. It's very hard to destroy an organization like this; they have the benefits of guerrilla warriors plus the financial resources of a major corporation.

The Sinaloa Federation operates a lot like a multinational corporation, including an executive on the Forbes billionaires list. They innovate in product delivery technology, they have executives (aka family members) supervise new ventures, they outsource tasks that would damage their brand, and so forth. In addition to parallels with legal corporations like oil companies I think they also bear a striking resemblance to historic organized crime groups like the Mafia and Yakuza. The salient feature is the organized part moreso than the crime. The latter is only present because the business's products happen to be illegal.

I think it's helpful to think of these groups as companies with violence as one of their business methods rather than a grand version of random street violence. It also suggests that tourist fears about travel in Mexico may be unnecessarily elevated: would killing you further the business interests of the cartels?

A TED blog post about this video links to a few others on similar topics, including a suggestion that the best way to fight these organizations is to devalue their brands.

One interesting twist in the Mexican drug war is that the Americans are funding both sides. The cartels make most of their money by selling drugs to the U.S. distribution network, not to mention side businesses like smuggling migrants for the labor market. Meanwhile, the U.S. government subsidizes the Mexican government's anti-cartel activities, with gun manufacturers from the States profiting from sales to both sides. Not to mention the money spent on border enforcement and anti-drug efforts north of the border, a chunk of which also goes to American arms dealers.
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