America’s Open Borders Fuel Mexico’s Drug Wars

September 26th, 2010 at 11:34 pm | 21 Comments |

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There is an on-going debate as to whether we, as the United States, are responsible for the growing instability in Northern Mexico resulting from various competing drug cartels having set up their distribution centers in the area. The only debate worth having is whether we are totally responsible for the problem or only mostly responsible. Our laws and our enforcement policies (or lack of enforcement of our policies) are the sole reason the drug cartels have located as close to the border in the United States as possible.

The decision for the drug cartels to locate their distribution centers in Northern Mexico is nothing more than a lesson in supply chain management. All of the business factors included in that supply chain management decision relate to successfully serving the American drug market. None of the decision making has anything to do with serving the Mexican drug market.

Every business organizes itself to achieve maximum profits. In the analysis to maximize profits, businesses attempt to avoid catastrophic risk. A classic example of this decision process would be not locating an inventory of books in a place where the books might get wet and therefore become worthless. The people who run the drug cartels face the same issues and similar assessment of risk. And if you were the chief executive officer of Illegal Drugs R Us, where would you store your inventory?

Why are we responsible for problems in Mexico? We are responsible because we have created a business and legal environment where the best possible location for a drug distribution hub is uniquely Northern Mexico.

The following are the ‘business’ facts that the drug cartels deal with every day:

  • The United States does virtually nothing to discourage illegal drug use by the user. During the last few years, the common vernacular for illegal drug use has actually changed from illegal drug use to the ‘use of recreational drugs’. Generally for the user, the only meaningful law enforcement risk is to be arrested for another crime while under the influence. The result of lax enforcement and meaningless penalties (think Paris Hilton) is that there is a very significant demand for illegal drugs within the United States. In fulfilling this demand, the cartels, like any other business, attempt to limit their risk.
  • The United States allocates a significant portion of its drug enforcement funds towards thwarting growing and the manufacturing or processing of drugs within the United States. These activities are pursued by law enforcement with unbridled enthusiasm. The result is that the business risk associated with growing and the manufacturing or processing large quantities of drugs within the United States is a business risk the drug cartels choose not to take. These activities are outsourced to other nations. In a business sense, this is no different than deciding to outsource a call center to India. It is all about increasing profits and decreasing risk.
  • The United States allocates a significant portion of its drug enforcement funds towards attempting to confiscate large quantities of illegal drugs at a single location in a single enforcement action. They are aided in this activity by decisions to try to control our airports and ports for homeland security reasons. This has resulted in a business imperative for the drug cartels to locate their significant inventories where the risk of seizure by U.S. authorities is very low to non-existent.  It is all about increasing profits and decreasing risk. This is step one to the decision to locate illegal drug inventories in Northern Mexico.
  • The United States allocates an insufficient amount of funds from any and all agencies, including Homeland Security, towards securing the United States border with Mexico. (It is without merit to argue that we are spending more than previously spent if the borders are not secure. The issue is not what happened previously, but what is happening today. The cartels can easily bring inventories across the border in incredibly small increments and then consolidate these shipments into manageable, but not huge, quantities in small vans on the U.S. side of the border. It is all about increasing profits and decreasing risk. This is step two to the decision to locate illegal drug inventories in Northern Mexico.

Given the high demand for their product and the reality on the ground in the United States, the following is the supply chain management program of the drug cartels:

  • The growing, manufacturing and processing of illegal drugs is outsourced to locations around the world.
  • Distribution centers have been located in Northern Mexico. The seizure of the inventories of illegal drugs in Northern Mexico is more difficult for the Mexican government as the drug cartels are better armed than the Mexican police and virtually as well armed as the Mexican army. (One must wonder as the drugs are not being used by Mexicans why any Mexican police officer or member of the army would risk their life or the lives of their families trying to control the drug traffic.)
  • The distribution of the illegal drugs is done in a two part process. First the drugs are carried across the border in fairly tiny quantities by individuals entering the United States illegally and then the tiny quantities are consolidated in small vehicles. The small vehicles then are sent on their way throughout the United States to fill the demand of their customers.

The drug cartels have developed their business around a supply chain management decision process that reduces economic risk while insuring on time deliveries.

What would happen if the President of the United States allocated sufficient resources to effectively close our borders? Right away, we cannot be sure, but the reason that the drug cartels have decided to make Northern Mexico their location for drug distribution would be gone. At that point, if the Mexican military intervened aggressively, the distribution would probably move somewhere else fairly quickly.

If the United States decided to either make the drug trade legal or make the risks of using illegal drugs significant for the user along with closing the borders, the most significant part of the problem in Mexico would probably disappear overnight.

Are we the problem? You’re darn right we are the problem. If we are in the blame business, it starts with a presidential decision that enforcing the borders is not too important.

Recent Posts by Hank Adler



21 Comments so far ↓

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  • yandahi

    I enjoyed reading this article, but I think one of your first statements is exaggerated. “The United States does virtually nothing to discourage illegal drug use by the user.” There are a lot of people doing time in prison or jail for drug use. On NORML’s website, they have the number at 858,408 people arrested for marijuana possession or trafficing in 2009. (http://blog.norml.org/tag/uniform-crime-report/) That is almost 100 people per hour. In Arizona, possessing anything under two pounds of marijuana can get you 6 months to 1.5 years incarceration and $750 – $150,000 in fines. If you are lucky, you just might lose your job and be put on probation with drug testing. Increasing enforcement has shown to have little effect on the appetite for drugs in the U.S.

    You forgot to mention that many of the weapons the cartels are using are guns brought into Mexico from the United States. I believe that the border is more secure now than it ever has been. President Bush did not seem to do any better than the current administration. As long as the market exists, no level of enforcement will be enough. The first step should be legalizing marijuana.

  • Rabiner

    To the authors argument:

    “Are we the problem? You’re darn right we are the problem. If we are in the blame business, it starts with a presidential decision that enforcing the borders is not too important.”

    What about just legalizing drugs? Let them be regulated, taxed and let police enforce those laws. What makes drugs a lucrative business is the risks you outlined so they can charge high markups for that risk. Increase competition, decrease profits, and remove the cartels from the business entirely.

    “What would happen if the President of the United States allocated sufficient resources to effectively close our borders?”

    Why would we want to close our borders? I hear a lot of trade occurs at our southern border and closing it is just going to hamper economic activity.

  • SkepticalIdealist

    Our drug policy is what’s fueling Mexico’s drug wars. America is the number 1 consumer of illegal drugs. Our populace is wealthy, willing, and able to purchase from the very same people who assassinate Mexican politicians and corrupt the Mexican police force. By giving these organized crime syndicates billions of dollars each year, we are unintentionally funding the brutalization of our neighbors south of the border, and then we turn around awe struck when they want to leave their ravaged country for ours.

    Just legalize it you clowns. If you legalize it we’ll put the cartels out of business, we’ll get tax revenues, and drugs will actually be more difficult to obtain (just look at prohibition and the current status of alcohol as an example). Anyone who wants drugs right now can get them, and you can sure as hell bet that the drug dealers don’t check kids under 18 for ID. If you legalize the stuff and put drug manufacturing in the hands of private industry we’ll be doing the right thing for ourselves, the right thing for our children, and the right thing for the people in Mexico. It’s the most obvious thing for real conservatives to support. It’s the EXACT same principle behind defending 2nd amendment rights. You can’t get rid of guns, you can’t get rid of drugs, but you can give criminals exclusive access to firearms and drug manufacturing by making them illegal. It’s stupid in both cases. Just let people take responsibility for their own freakin’ lives.

  • freedomrings

    “The distribution of the illegal drugs is done in a two part process. First the drugs are carried across the border in fairly tiny quantities by individuals entering the United States illegally and then the tiny quantities are consolidated in small vehicles”

    Your argument that we should increase border security rests on this fact, but it’s counter to what I’ve heard int he past. Can we have a reference please?

  • drdredel

    I think most sensible people are in favor of legalizing drugs, at this point (the most sensible were never in favor of making them illegal in the first place). However, it’s folly to think that the drug cartels would simply turn around and open Subway Sandwich shops in place of their current business practices. They’ll find something else that requires the use of machine guns… it’s what they do.

  • CD-Host

    – If the United States decided to either make the drug trade legal or make the risks of using illegal drugs significant for the user along

    We put millions of drug users in jails. And Lindsey Lohan has been in and of court for 3 years related to a single drug charge and failed tests. Do we execute users, no. But we certainly penalize them and there is no evidence that worse penalties would have any effect.

    As for domestic production the main domestic production is meth and while I certainly support the legalization of pot and possibly other drugs it is hard to make an argument that meth is not incredibly destructive to society. If the effect of the drug war is to turn meth users into pot and cocaine users that might be money well spent.

  • balconesfault

    Seriously – we’ve known for 30 years that criminalizing drugs just made bad people wealthy. And ironically, the harder we crack down on drugs, the worse the bad people get.

    drdredel – drug cartels can recruit people to do incredibly violent and dangerous things because of the amazing amount of money they have. Cut off the money by legalizing the drugs, and they’ll soon lose most of their foot soldiers.

  • Nanotek

    “If the United States decided to … make the risks of using illegal drugs significant for the user … the most significant part of the problem in Mexico would probably disappear overnight.”

    Mr. Adler, isn’t there a point when certain arguments jump off the page as needing revision?

    “In the 1980s, while the number of arrests for all crimes was rising 28%, the number of arrests for drug offenses rose 126%.[21] The United States has a higher proportion of its population incarcerated than any other country in the world for which reliable statistics are available, reaching a total of 2.2 million inmates in the U.S. in 2005. Among the prisoners, drug offenders made up the same percentage of State prisoners in both 1997 and 2004 (21%). The percentage of Federal prisoners serving time for drug offenses declined from 63% in 1997 to 55% in 2004. … Federal and state policies also impose collateral consequences on those convicted of drug offenses, such as denial of public benefits or licenses, that are not applicable to those convicted of other types of crime.” — Wikipedia “war on drugs”

  • SkepticalIdealist

    CD-Host, they only reason they had enough money to buy machine guns in the first place is because of how profitable the drug trade is. If we cut off that source of income however, it’s only a matter of time before they lose power and influence.

  • CD-Host

    Skeptical –

    I agree the drug trade funds the drug warriors. I was arguing about whether domestic vs. foreign production is better given the drug shift. Pot is a no brainer for legalization, even heroin might be a lot less destructive if it were legal. But meth is so incredibly destructive… I’m a bit torn in going that far. But the first few steps are obvious. I hope California legalizes pot.

  • balconesfault

    CD Host is right – pot legalization (and fwiw, I have always been a complete tee-totaler wrt pot or any illegal drugs) is such a no-brainer that it staggers the mind we’ve been able to keep it illegal for the last 20 years. When the odds on any person you meet having engaged at one time or another in a specific criminal activity starts to exceed 50-50, it’s definitely time to change the laws.

    The worst argument out there is re: pot being a “gateway drug”. It seems that to the extent it is, that’s more because to obtain pot you have to interact with seedy characters who might encourage you to try other substances. Take pot from the pushers, and the gateway to large extent would close.

  • easton

    Yeah, I agree with most posters here, this is a weak article. And I agree with CD about pot. I have smoked pot but would never consider Herion or meth.

    And I do love this whopper: The United States does virtually nothing to discourage illegal drug use by the user. Since, as most people here pointed out our prisons are full of people in that line. And if prison time doesn’t discourage use, what can Adler imagine would? Beheadings?

    As to securing the border, another absolute pie in the sky fantasy. The cartels build incredibly long and sophisticated tunnels, the border is very, very long, there is also the aspect of the huge coastlines, it is an impossible task, and the harder you do make it the more you create conditions rife for corruption in the US, as though no law enforcement agent could ever be on the take.
    All for what, shall we spend a trillion dollars a year to prevent some teenager from doing what he is going to do anyhow, but with him only spending more for it?

  • WildWilly

    We could lock everybody in prison to keep the drugs out of their hands.

    No, wait, prisoners can buy drugs in prison.

    Maybe we need to rethink the idea that we can keep people from doing stupid stuff?

  • Annikan

    How do you suggest we make the risks for the user greater? US drug possession laws are already relatively strict for a free democratic society…only totalitarian regimes have stricter laws.
    Maybe the use problem in America has to do with the one size fits all policy in the drug war…treating marijuana the same as meth.
    If the DEA focused its energies on meth production and trafficking while leaving marijuana alone, they would be able to more successfully deal with the problem. Instead, they spread themselves too thin, anger half the country with their stance on medical marijuana, and leave avenues wide open for the illegal drug trade to flourish.

  • baw1064

    One thing I might do, if I were “the chief executive officer of Illegal Drugs R Us” (as the column puts it), would be to invest some lobbying money in the political process to make sure they stayed illegal. Legalization would be very bad news, as it would spell the end of a fantastic profit margin. The people wanting to step up enforcement would be my useful idiots…the more drugs get siezed, the more money I make (thanks to the inelastic demand curve).

    So, does anyone think the cartels already use this approach?

  • drdredel

    @baw1064

    Interesting thought, but I think that the ingrained anti-drug sentiment is so deep in our government (at least in so far as what they’re willing to say publicly) that no additional incentive from lobbyists is necessary.

  • Frogmorton

    I am not sure what the answer is to the ongoing drug problem we have in the west but I don’t think decriminalization is it. We lose approximately 500,000 people to tobacco related illness every year in North America. Even if we were to concede that the carcinogenic effects of pot were half that of tobacco are we prepared to watch 250,000 more people die each year.
    I know there will be people who read this post and scoff at the notion that marijuana can even be linked to cancer. In fact there have been very few studies into the effects of long term use of marijuana. What is known however is that pot contains the same carcinogens as tobacco (approximately 50) and 4 to 5 marijuana cigarettes are the equivalent to 20 tobacco not based on their physical properties but on the manner in which they are consumed. Pot smokers inhale more smoke and hold it in longer thereby increasing the effect.
    If it can be proven that marijuana has no effect on a person’s health then I think legalization would be a logical next step. Proven beyond a reasonable doubt not “there is no evidence” because they most certainly are not the same thing. There is no evidence I’m stealing Carrot cake from the fridge at night but I can tell the world that’s exactly what’s happening. Before we put the lives of a quarter of a million people at risk I think we owe it to them to have as much information on how pot may affect their health prior to making it legal.

  • balconesfault

    frogmorton: Even if we were to concede that the carcinogenic effects of pot were half that of tobacco are we prepared to watch 250,000 more people die each year.

    I’m certainly not ready to concede that. A two-pack-a-day cigarette smoker is commonplace in the nicotine-addicted community. Anyone who smoked 1/10th that much pot a day would pretty much be sitting around stoned out of their gourd all the time. So your dose exposure is far far lower. Plus, pot smokers are likely to go for days without lighting up … the nicotine monkey is far more demanding.

    I’ll throw this out there, however. I’ll bet that more people will die from drug-trafficing related violence in America this year than would die from legalized marijuana.

  • Frogmorton

    Balconesfault
    Though my earlier post may have given the impression I steadfastly oppose the legalization of pot this is not the case. As the spouse of a health care worker I see the negative effect that alcohol and tobacco have on society and would hope that before we unleash another demon on the public we were clear on what the consequences would be. If it could be shown that there were no ill effects then why not but as of now the data doesn’t support a conclusion either way.

  • Annikan

    Frogmorton when you talk about lots of people dying each year you ignore two things:
    One, legal or illegal that demon has already been unleashed. Pot smoking today is almost as common as tobacco smoking is.
    Two, any potential increase in people dying would be certainly offset by the number of people getting killed because of the underground drug trade in the US and around the world.
    Ive seen numerous family members die from lung cancer, throat cancer and heart attacks who were all heavy smokers. And I would never in a million years suggest criminalizing tobacco. The potential profits from the underground sale of cigarettes would be enormous. You could bet there would be bodies lying all over the streets in an effort to seize control of that underground economy.