Narconomics: How To Run a Drug Cartel

Very well done and informative for anyone over 30 or 40. Has lots of insight into 'the business' and some thought generating information on different aspects of the Narco trade including sound logic for legalization of cannabis. Not sure I agree with doing so, but the argument has compelling elements. Good read to keep a sense of what is going on in a world that is different from mine specially if you have teens or kids in their 20's.

Excellent book, but nothing really new. If this sort of thing interests you already... you're probably already well aware of anything this book has to say.

I would still highly recommend it though.

It is a very complete, yet easy read, analysis of the business of the drug trade. A must for people on law enforcement. A great study case for economist. And valuable information for the common person.

This is a fun read demonstrating that the same rules that result in legitimate business moves effect illegal business activities from HR practices to offshoring. Especially noteworthy is the establishment of constitutional rights for lower level criminal employees. Business and social dynamics follow the same principles in legal and illegal groups.

A very interesting and lively read, a good book as far as it went, but the problem is, it didn't go far enough. Too superficial, merely descriptive (though the descriptions are interesting), too little analysis, not much in the way of conclusions...

A fascinating study of the international drug trade through the prism of economics. Wainwright does not get mired down in economic jargon or minutiae, instead opting to paint an engaging and eminently readable portrait of how the drug trade works with plenty of vignettes/case studies of various points in the supply chain. He doesn't lose sight of how the drug trade impacts different localities, how economic pressures both drive the drug trade and drive people into association with drugs (whether growing, selling, or buying), and interweaves these ground level descriptions with broader economic principles. At every chapter he explains different aspects of the drug trade, explains how the authorities try to stymie such trade, and parses the economic pros and cons of each approach. Wainwright's final chapter is a catalog of proposed strategies, all from an economic perspective, that would likely garner much better results than most of the strategies currently used to counter the drug trade. Interesting reading and very eye-opening.

This was an interesting book with a good angle - the fact of prohibition drive so much crime both at the source of the drugs and as they are passed along the value chain that prohibition doesn’t work, since these supply-side interventions barely raise the street price and do little to dent demand. Demand is driven more by fads and trends - and in the case of opiates, doctors over-prescribing legal pills that become too expensive so heroin is a cheap choice.’

The book’s subtitle is “How to run a drug cartel,” and I think that may over-sell it. I don’t think that I could go and run a cartel based off of the information in this book. It seems to be misplaced in terms of marketing: the book for the most part focuses on the americas, but there is an interlude about synthetic drugs in New Zealand that is interesting but seems out of touch with the rest of the narrative. It seems the author interviewed one of the synthetic entrepreneurs and wanted to keep that part in even though the bulk of the book focused on the origin of drugs in South America to the ultimate markets in the US and Western Europe (Very little mention is made of Asia, and none of Africa that I can remember, so this is not a global model, but a very western one).

Ultimately, I feel that Wainwright makes a strong case, but I was on his side before I even picked up the book. The current fact of prohibition (especially in marijuana) is going to be one of those cultural embarrassments in a generation, KIds will be goggly-eyed at that fact that not only was weed illegal, the state would lock up men and women for decades just because they owned some of it. In a nation where owning people was fine for a significant part of its history, this fact is hard to justify - and this book helps show why.

In “Narconomics,” journalist Tom Wainwright applies the logic of business to the bloody world of drug cartels. His book is both an extended black joke and a hard-headed analysis of the economics of getting high. The “war on drugs” is a fiasco, he writes; legalization offers hope of a more effective, rational approach.

Wainwright, a former Mexico correspondent for the Economist, examines how a global industry with annual revenue of $300 billion and hideous levels of violence has grown from the commercialization of just a few cheap agricultural products. Cocaine, he writes, undergoes a 30,000 percent markup on its journey from remote Latin American farmland to U.S. city streets. World taxpayers spend at least $100 billion a year trying to fight the trade, with little effect on the number of consumers.

Drug cartels, though, face challenges that many regular multinational companies would recognize, from managing personnel and navigating government regulations to finding reliable suppliers and dealing with competitors. Their responses often echo those of major corporations. Like Wal-Mart Stores, for example, cocaine manufacturers have protected profit by tightening control of their supply lines. R&D spending has made the production process more efficient. Mexican cartels such as the Zetas have expanded on a franchise basis, in a similar way to McDonald’s.

Offshoring offers opportunities, too. Poor Central American countries such as Honduras can provide even cheaper labor and more accommodating regulatory environments than Mexico. Diversification, for example into smuggling people or kidnapping, can boost revenue when traditional lines of business mature. Competition from online suppliers, though, is a threat.

Wainwright is sardonically funny at times describing the problems drug gangs face in the spheres of human resources and public relations. Staff turnover, through arrest or death, can be a challenge. Lacking access to courts, dispute resolution is often a grim affair.

The humor comes with a serious purpose, though. He takes data from the World Economic Forum’s Global Competitiveness Report, which ranks countries on their suitability for (legitimate) business, and turns it inside out to produce a “Cartel Competitiveness Report.” Low regular rankings on metrics such as judicial independence, police reliability, pervasiveness of bribery and business ethics suggest exactly where drug gangs will do best.

The absence of basic state institutions, indeed, is one factor that allows cartels to prosper, presenting themselves as an alternative source of protection, law and even housing and schools. In some parts of Latin America charitable donations made with drug money, known as “narcolimosnas,” may be virtually the only money in town.

Governments make four big mistakes trying to tackle the drugs trade, Wainwright says. They focus overwhelmingly on suppressing supply rather than addressing consumption. They also skimp on cheaper measures such as addict treatment, prisoner rehabilitation and jobs programs but spend heavily on enforcement. Uncoordinated national laws and approaches allow cartels to easily indulge in regulatory arbitrage. And above all, they falsely equate prohibition with control, handing billions of dollars in revenue to violent though sometimes sophisticated thugs.

In this regard, events in the U.S. marijuana industry are illuminating. A study by the Mexican Institute for Competitiveness (IMCO), for example, attempted to calculate the likely effect on U.S. weed prices of internal smuggling from the states of Colorado and Washington to the rest of the country after they legalized the drug.

Working on the basis of a wholesale price of $2,000 per kg (which most Colorado growers said it cost to make their own batches), adjusting for product purity and factoring in a price rise of $500 for every 1,000 km that marijuana travels within the United States, the study found that U.S. weed would be cheaper than the Mexican cartel-supplied variety in 47 of the 48 mainland states. Only in Texas, right on the border, would the drug gangs offer better value. IMCO reckoned the cartels stand to lose nearly 75 percent of their revenue from U.S. marijuana, even before more states legalize.

Looking ahead, Wainwright sees marijuana moving ever more into the legal arena, in the United States and elsewhere, leading to a logical outcome of lawful production shifting from an initial U.S. base back to cheaper Mexico. Even former Mexican President Vicente Fox, he notes, says he might grow it if it were legal.

Other more dangerous drugs require a different approach, he argues, though still one that moves away from prohibition. A Swiss program focusing on the country’s most hardcore heroin addicts, for example, allows doctors to administer the drug in controlled settings. The result has been a big dip not only in national use but in crime and dealing, as the biggest users would also deal or steal to fuel their habits.

Wainwright doesn’t have all the answers to a complex problem that raises anger and passion. His rational, market-based approach is far from glib, though. An entertaining read, “Narconomics” is also thoughtful and in many regards persuasive.

- Martin Langfield

This is a really impressive examination of modern drug culture, examining the drug trade (and its attendance 'businesses') from the perspective of economics. The character of the author's voice is really appealing, too. He has a habit of bringing his interview subjects to life in a way that is rare for nonfiction prose. This isn't a passionate druggie's companion and isn't designed to defend the consumption of drugs. Instead, it's an examination of the financial and political power structure hidden behind drug trade, with some closing thoughts on how to repair the loopholes that allow black markets to thrive. -Ryan Mease

Chances are, you've recently seen a headline of a big drug bust or seizure, insinuating a major blow against the illegal trade.. Except, as Tom Wainwright explains in this book, that's hardly the case and to understand why you need to examine the entire $300B supply chain from a perspective of an economist: consider a drug cartel as a corporation; examine their supply channels; consider their "human resources" / recruiting pipeline and retention challenges; examine price-sensitivity of upstream clients; and so on. Once we understand the economics, we can talk about policy and prevention; forget the PR about "war on drugs" and focus on the data that can help determine what is most effective.

Spoiler: most of what we do today has very little impact. A well researched, captivating, and educational read.

This is a fascinating look inside the scary world of drug cartels. Wainwright delves into all sides of the drugs business,and while his interviews with cocoa farmers in Peru, gang leaders in El Salvador, and politicians in Mexico are fascinating, it is the manner in which he examines the advantages and disadvantages of various cartel operational strategies that I found most intriguing and insightful. A reporter turned editor for The Economist, Wainwright is particularly adept at evaluating objectively (and with dry wit) the way cartels run their businesses and the way governments try to stop them. And, of course, the parallels he consistently draws between how cartels operate and how big corporations like Wal-Mart and McDonalds do business are entertaining, and also frightening. I enjoyed this book and highly recommend it.

More addictive than a bag of illicit drugs (one can imagine), this book takes a look at the multi-billion dollar global drug industry in an entirely different way, viewing it as a business and showcasing its different business functions. Narconomics, the economics of narcotics, in other words.

This is not just a book about drugs but a look at many areas of business and economics through a practical lens. It is all strangely addictive, informative and engaging. Tabloid newspapers need not fear; this book does not advocate the taking of illegal drugs or put the drug cartels on a pedestal in any way. As a business worth conservatively over USD300 billion a year, clearly those running it know what they are doing. No matter about the law, you just cannot run something of this scale or size without having finely tuned structures in place. If anything, the operation could arguably be even larger and certainly more efficiently were it legal.

You can look at the book in two distinct ways, either learning more about the global drugs trade and seeing how it uses big-business techniques to good effect, or you can use the examples given as a way to understanding business concepts that are often swaddled in theory and can be difficult to understand. It serves both well, packaged in an easy-to-read, informative form.

The author shows how business practices such as mergers and acquisitions, competition and collusion, social responsibility, media relations, human resources, franchising and strong management oversight are used within the drugs business. You might not look at it in the same light ever again.

You do not need to be interested in business to get a lot out of this book. It is great for a general reader and eminently suitable for anyone with an interest in business or the global drugs industry. Once you pick it up, it can be hard to put down though!

There is no coherent narrative. It's a loose collection of "economic" buzzwords and the analogies drawn are ad-hoc and superficial. The vignettes which could have been very interesting are, frankly, dully written.

What do drug lords and the senior executives of major Western corporations have in common? More than you might think. This book is an insightful and well-researched analysis of the modern drug business, focusing primarily on the North American market. The author is not an ivory tower academic - he's done the necessary legwork to write an interesting book, traveling to dangerous parts of the world and interviewing dangerous people. Recommended!

This is not written by a businessman but a reporter who has learnt a few concepts in business and proceeded to make a narrative from this.

Having said this, his book to me makes a lot of sense. Illegal drugs are a business, and we should look at it from that perspective. So I found quite a lot here that gave me much to think about.

A fascinating look at the multi-billion dollar international illegal drug industry. It shows how cartels use tactics of all big businesses: advertising, brand loyalty, customer service, gaining market share, etc. But with guns. And knives. And explosives. The author amply demonstrates how traditional drug enforcement policies are completely inappropriate responses to the epidemic and encourages readers and lawmakers to think more like economists.

This book is extremely on point and factual about what the drug culture is on our society, and how drug cartel lords are very smart businessmen. Compared to other books as well as TV Shows, Wainwright does a good job at focusing on what his book is about, which is how drug cartels mirror the system that big companies run and how it's effective, and doesn't focus on demonizing the business.

I`m an economist and avid reader of The Economist. I don't understand the negative reviews of this book. The style of Mr. Wainwright is superb. He explains - with data, insights and business jargon - the economic forces of drugs. If you want nasty descriptions of how cartels operate, this is NOT your book; try Roberto Saviano. If you want a clear, well documented and interesting book on how economist view drugs and the optimal public policies on drugs, this is your book. If you want something "less superficial" try Gary S. Becker. But he won't be as funny as Mr. Wainwright.

A very well researched book. Amazing to see the parallels between the drug cartels and Fortune 50 companies. This book has changed my mind on the on-going drug war. A real shame that billions of dollars have been wasted on supply side policies.

Its well written, and thoughtfully laid. Plenty of references, and evidence of the research that the book involved. Sometimes, it comes a little bit too 'pushed into being funny' but I might be a little bias, since I am actually from a Latin American country and quite familiar with the subject. It does, however shows even to somebody like me, new things.

This is an excellent book that helps dissect the cartels, and compares them to big businesses. It show the similiarities, and the differences, it also offers insights into a better way to combat them, and help society

This book is primarily comprised of statistical quotes from a bewildering and contradictory variety of sources cherry-picked by the author to fit his point of view. The sheer volume of offhand references to various studies is overwhelming - upon picking a page at random, I found six different conclusions cited, many from highly partisan or eccentric sources that a more responsible writer would probably choose not to include. The "fact" is tossed out as a numerical quantity, the reader is presumed to accept this as an unassailable scientific certainty, and then, without any further elucidation, the author resumes his wild gallop through the subject matter, continuing to sprinkle his trail with dubious substantiations like so many horse droppings.
Not only is this questionable journalism, it also makes the book far from smooth reading. The picaresque insertion of jarring percentages and improbable numerical statements to buttress Wainwright's points, interposed with colorful descriptions of local drug lords and harrowing accounts of his travels midst the more dangerous elements of the criminal underworld, seem to self-parody his efforts.
The book, in fact, reads like one of the Economist's (the author is a high-level journalist with the magazine) more forgettable efforts and ultimately the author's commitment to the core theses seems half-hearted. It's as if he subscribed to the notion that as long as the book has the same superficial tone,meter, and gravitas as an article in the Economist, then it automatically is invested with the same cachet and must be accepted as worthy. This is the same self-serious attitude that has always dogged the Economist.
Beyond that, and in keeping with the Economist's peculiar image as a liberal organ, the book comes across as an odd wheedling, apologia for the illegal drug trade. It also serves up a variety of leftover leftist solutions to the problem, ranging from converting prisons to coddling 'rehabilitation' spas to the long-rotted chestnut that all any drug dealer really wants is a decent job with middling pay and decent benefits and they'll happily abandon their billion-dollar empires and luxury haciendas. Frankly, the whole effort looks like it was edited by Angela Merkel.

If you want a taut, academically rigorous treatment of the illegal drug industry, one has only to read Stephen Levitt's "Freakonomics", a resolutely sound analysis devoid of sociological maunderings and dartboard statistics.

This listless effort deserves to be skipped.

If your looking for actual facts about the cartel and how the drug economy works. I would look elsewhere. I don't doubt the others credibility when it comes to economics but after reading this it's clear the author knows next to nothing about the narcotics business. These inflated figures and stories are no where near the reality. Maybe if you actually did some research with actual real people in the narcotics business, instead of assumptions based on your days in the field in Mexico. You may have a more comprehensive view on the actual business of narcotics. A fair attempt but he misses the mark by a wide margin. If you want to sound smart while describing the drug business the read the book, however if you want an accurate portrayal of anything and I mean anything because this book is so wrong on so many accounts. Buy another book.

This a liberal media attempt at "Open Borders" He does make some correct claims on the failed 'War on Drugs" The solution to open the border and legalized drugs is insanity. Any person with any sanity would reject this liberal claim. I am surprised that the store would push this book onto the American Public!

I would never have any real real interest in economics, but one of the podcasts that I listen to recommended this book, and I decided that the concept was so out if left field that I would give this a listen.

I highly recommend this book. I thought it was going to be boring, but as I was listening to it on my car trip, I found myself quietly thinking "holy expletive" as I learned about a bunch of the economic thoughts surrounding the drug trade.