Organized Crime Roundup

I have been arguing for years that organized crime has an inherently political component. Certainly I am not alone, and researchers far superior to me have made the same point–for example, Charles Tilly and James Buchanan. However, mainstream political reporting seems to have been catching onto this over the past few months. I have rounded up a few of these posts that will be of interest to long-time readers. See also my working paper on violence following targeted leadership removals in Mexico.

Are Mexican Drug Lords the Next ‘Terrorist Targets’?” by Douglas Lucas. Lucas accurately describes the framing of drug lords as terrorists to be a form of “mission creep.”

Peter Andreas responds to Moisés Naim’s essay in “Measuring the Mafia-State Menace.” I was not aware of Andreas’s work until Daniel Solomon recently shared it on Twitter but now I have several of his books (including this one) on my reading list.

Although somewhat sensationalized, Christian Caryl also has a nice overview piece on global organized crime at Foreign Policy: “Mob Rule.” Some of the statistics there seem questionable but the overall point–that students of politics should pay attention to organized crime–is a valid and important one.

Finally, World Politics Review features an interview with Brian Phillips, who argues that targeting DTO leaders in Mexico has not reduced violence. This matches my own research on the topic.

How “The Wire” Explains Microsoft

I cannot speak to the accuracy of this since I do not know much about the internal workings of Microsoft, but as an analogy I found it fascinating. David Auerbach on how The Wire explains Microsoft:

What does Microsoft in the Ballmer era have in common with drug kingpin Avon Barksdale’s organization in The Wire? For years, both of them had the strongest package. They owned their territory, owned their market, owned their users. They were untouchable. Then times changed, bringing new competitors with new, intense products. Their own product went weak. But they couldn’t let go. “We got a weak product, and we holding on to prime real estate with no muscle,” Avon’s cerebral second-in-command, Stringer Bell, complains to him. For the Barksdale organization, the product was heroin and the real estate was the drug-ravaged Franklin Towers housing project. For Microsoft, the product is Windows and the real estate is the PC.

More here (some language NSFW).

Notes on the Sinaloa Cartel

From NYT over the weekend. Some of the article is hyperbolic, but I present the interesting parts here without comment.

On logistics:

From the remote mountain redoubt where he is believed to be hiding, surrounded at all times by a battery of gunmen, Chapo oversees a logistical network that is as sophisticated, in some ways, as that of Amazon or U.P.S. — doubly sophisticated, when you think about it, because traffickers must move both their product and their profits in secret, and constantly maneuver to avoid death or arrest…. In its longevity, profitability and scope, it might be the most successful criminal enterprise in history.

On profitability:

The Sinaloa cartel can buy a kilo of cocaine in the highlands of Colombia or Peru for around $2,000, then watch it accrue value as it makes its way to market. In Mexico, that kilo fetches more than $10,000. Jump the border to the United States, and it could sell wholesale for $30,000. Break it down into grams to distribute retail, and that same kilo sells for upward of $100,000 — more than its weight in gold. And that’s just cocaine. Alone among the Mexican cartels, Sinaloa is both diversified and vertically integrated, producing and exporting marijuana, heroin and methamphetamine as well.

On corporate structure:

The organizational structure of the cartel also seems fashioned to protect the leadership. No one knows how many people work for Sinaloa, and the range of estimates is comically broad. Malcolm Beith, the author of a recent book about Chapo, posits that at any given moment, the drug lord may have 150,000 people working for him. John Bailey, a Georgetown professor who has studied the cartel, says that the number of actual employees could be as low as 150. The way to account for this disparity is to distinguish between salaried employees and subcontractors. A labor force of thousands may be required to plow all that contraband up the continent, but a lot of the work can be delegated to independent contractors, people the Mexican political scientist and security consultant Eduardo Guerrero describes as working “for the cartel but outside it.”

On violence:

“In illegal markets, the natural tendency is toward monopoly, so they fight each other,” Antonio Mazzitelli, an official with the United Nations Office on Drugs and Crime in Mexico City, told me. “How do they fight: Go to court? Offer better prices? No. They use violence.” The primal horror of Mexico’s murder epidemic makes it difficult, perhaps even distasteful, to construe the cartel’s butchery as a rational advancement of coherent business aims. But the reality is that in a multibillion-dollar industry in which there is no recourse to legally enforceable contracts, some degree of violence may be inevitable.

“It’s like geopolitics,” Tony Placido said. “You need to use violence frequently enough that the threat is believable. But overuse it, and it’s bad for business.”

The Politics of Mafia Marriages

One difficulty in international relations is commonly referred to as the lack of “credible commitments,” but could also be called “unenforceable agreements” or “the absence of contracts.” Rulers of monarchies figured out a solution to this problem several millenia ago: political marriages. Whether the enforcement comes from strong social norms or a religious figure (e.g. the pope), they system of political marriages worked for Europe until a century or two ago. Marriages as alliance-builders continue to be used today in various settings, including the Italian mafia:

The Cosa Nostra and the ’Ndrangheta have a dynastic politics that resemble the royal families of medieval Europe. In other words, they keep their women at home and they use them as pawns in the diplomatic game. When a war is about to be fought, alliances are made by marrying off your daughter to the son of another family. Or if a war has just ended, you seal the peace with a marriage. Southern Italians just don’t do that. This is a very specific mafia form of behaviour to do with the politics of the organisations and with finding ways to project their power and wealth down through the generations. It’s remarkably far-sighted, and one of the things that differentiates mafias from mere gangsters.

Notably, newer criminal organizations such as Mexican DTOs still lack this type of equilibrium-enforcing mechanism. I would speculate that it takes three or four generations to become a viable strategy. Once criminal groups start forming these kind of alliances, though, they are probably here to stay.

Micro-Institutions Everywhere: Crime Bosses

The similarity between organized crime and government continues to impress me. The best short read that you will find on this is Charles Tilly’s “War Making and State Making as Organized Crime.” (pdf here) We discussed this topic a lot last semester is Guillermo Trejo’s organized crime course and I am happy to provide further references to those interested. James Scott takes Tilly as one of his influences in the excellent book The Art of Not Being Governed, about which I will have more to say later.  For now, here is further evidence that crime bosses understand the importance of veto points:

But Kobayashi ran an unusual business. He was in the business of organized crime. He started this venture quite young, expanded his operations, diversified revenue streams, and created very profitable independent business units. “I have two lawyers,” he once told me. “I keep them both because they hate each other. Neither one of them can get out of line because the other one is watching him. That keeps me safe.” Kobayashi was brilliant, witty, and dangerous. He was a friend and mentor to me during an interesting period of time in my early 20s.

The close relationship between criminals and their lawyers, which at times borders on the psychoanalytic, comes across strikingly in shows like The Wire and Breaking Bad. It appears that this relationship at least occasionally takes on the form of a micro-institution in real-world practice. One could imagine the competition between two lawyers escalating into violence, but the quotation above suggests that they function as hostile but effective checks and balances on one another. And here you were thinking that animosity between the President and Congress was bad.

Further reading: 

What Now: The crime economy,” Reihan Salam.

Why Black Market Entrepreneurs Matter to the World Economy,” Robert Capps.