Narconomics by Tom Wainwright

"How does a budding cartel boss succeed (and survive) in the $300 billion illegal drug business? By learning from the best, of course. From creating brand value to fine-tuning customer service, the folks running cartels have been attentive students of the strategy and tactics used by corporations such as Walmart, McDonald's, and Coca-Cola. And what can government learn to combat this scourge? By analyzing the cartels as companies, law enforcers might better understand how they work--and stop throwing away $100 billion a year in a futile effort to win the "war" against this global, highly organized business. Your intrepid guide to the most exotic and brutal industry on earth is Tom Wainwright. Picking his way through Andean cocaine fields, Central American prisons, Colorado pot shops, and the online drug dens of the Dark Web, Wainwright provides a fresh, innovative look into the drug trade and its 250 million customers. The cast of characters includes "Bin Laden," the Bolivian coca guide; "Old Lin," the Salvadoran gang leader; "Starboy," the millionaire New Zealand pill maker; and a cozy Mexican grandmother who cooks blueberry pancakes while plotting murder. Along with presidents, cops, and teenage hitmen, they explain such matters as the business purpose for head-to-toe tattoos, how gangs decide whether to compete or collude, and why cartels care a surprising amount about corporate social responsibility. More than just an investigation of how drug cartels do business, Narconomics is also a blueprint for how to defeat them."--Publisher's description.

Here's a spoiler: the takeaway from Wainwright is that prohibition doesn't work. But unlike the resident pothead, his thesis is based on analysis that exposes drug war policy as often wasteful or even counterproductive.

Drug lords adapt is probably a better subtitle. There's nothing particularly novel revealed by Wainright's research if you have a passing understanding of the politics of drug enforcement. But what he does well is tie the operating norms of violent cartels with the incentives created by the very institutions that seek to control them. Violence is the the criminal enterprise's recourse in the absence of enforceable contracts. When you combine that operating reality with a demand curve that's only growing and a hydra-like supply line, is it any wonder why cartels thrive against policies that only escalate the drug war?

A business journalist's take on the business of drugs. Thoughtful and interesting with a lot of facts I've never heard before. Based on his understanding of the situation, the author gives a lot of prescriptive ideas for solving drug-related problems.

Narconomics gives a business overview of how the $300-billion global drugs industry works. From human resources to PR to franchising and diversification,. This book shows how drug cartels run their operations like successful businesses. British journalist Tom Wainwright explores the economic phenomena at work behind the world's drug problem. In doing so he presents new insights into how governments can defeat it.

Human resourcing can be a difficult. Loyalty is short-supply and mules are regularly caught. Men and women do stupid selfies of their crimes and are not always subtle. Settling scores within an organisation can be a frustrating bureaucratic process.

Public relations, collusion and fostering good relations is also important. But relationships with governments and communities can be undone by market competition.

The Internet means cartels have to reach out to their communities. They use effective digital marketing and diversify into new markets (migrants). Or they invest in offshore sites to run their business without inferences and regulations. Social media and regular media has become as much a tool of brand cultivation as its has terror.

Wainwright divides his book into ten chapters. These address an area of business practices that adopted by the drug cartels:

Chapter 1 is about supply chains.Chapter 2 is about the decision to compete versus collude.
Chapter 3 is about human resources.
Chapter 4 is about public relations and giving to the public.
Chapter 5 explores “offshoring” in the drug world.
Chapter 6 describes how franchising has come to be applied to drug cartels. The most famous case is that of the Zetas.
Chapter 7 focuses on synthetic drugs that has popped up. The topic is innovating around regulation “legal highs”.
Chapter 8 we learn that the drug world hasn't missed the online retail phenomena.
Chapter 9 examines how drug traffickers diversify.
The last chapter investigates the effect of legalization

There is an extensive conclusion. This connects together many of the key points made throughout the chapters.

Wainwright regards the war on drugs as a failed, expensive experiment. He acknowledges the drug-related violence in Mexico. He understand the corruption in the Caribbean and the overdoses in the United States. But he suggests that society must find a better way to control narcotrafficking. Wainwright suggests the strategy and tactics of government do not make economic sense.

He describes his travels to the cartel killing fields in Mexico and the coca farms of Bolivia. But he wonders why they are burned. As it is the livelihoods of the farmers which are destroyed not those of the cartel. He also explores the effects of legal grow houses of Denver. He sees the legal cannabis industry as an alternative to misguided efforts to control drugs. The government offers no incentives to those using lands to grow marijuana and cocaine to switch to legal crops. Not only are the wrong lives destroyed, targeting the source of supply for drugs is like increasing the price of paint to stop a painter from drawing.

Narconomics is a good introduction to the nature of the drug trafficking business and the many flaws of the war on drugs. Wainwright writes in a digestible, enjoyable way as he guides you on a fascinating journey through some of the most dangerous places in the world. In these places drugs are grown and manufactured all the way to the end users. A welcome boost for how and why economists and economics in general have something very useful to say about how the world could be a better place.