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the new social organization of the illegal narcotics trade

The LA Times has a series of interesting articles on the rise of a new type heroine trading ring (here, here, and here). Normally, the drug trade is a fairly centralized affair, with a few syndicates violently battling for dominance within a specific urban area. And each syndicate is often a hierarchically organized network.

There’s been a rise in a new type of network that peddles a low quality form of heroine (“black tar”) in small towns and rural areas. A few key points:

  • Rural folks vs. urbanites: The black tar peddlers are mainly from a very rural part of Xalisco, Mexico. In contrast, the  major drug cartels are centered in major urban centers.
  • High vs. low margins: Black tar peddlers target places that are overlooked by the major crime families and they’re willing to accept some low profits.
  • Networks vs. hierarchies: Black tar peddlers have informally organized themselves. There’s no “don” or crime boss. The point is to be as low profile as possible.
  • Pizza delivery vs. department store: Black tar peddlers don’t make their customers travel. They deliver – fast and cheap. This is unlike urban areas where buyers go street markets.
  • Direct marketing: Black tar peddlers often target methodone clinics, oxycontin addicts, and others who might be unusually suscpetible to black tar additiction. No need to “push it” on the inexperienced. The black tar peddlers also acquire clients by personal reference from current addicts.

It’ll be interesting for crimimologists and orgtheorists to see if this is part of a wider shift, or just a specialized development.

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Written by fabiorojas

February 17, 2010 at 3:07 am

Posted in fabio, networks, sociology

4 Responses

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  1. i was going to write about this (and the many econ soc hooks) but you beat me to it. two other issues i found fascinating in the articles were:

    they only sell to white junkies, apparently out of fear of black junkies (and/or the dealers who sell to them). is this statistical discrimination? taste discrimination? niche partitioning?
    management uses quality control phone surveys! i’m sure the questions are just “did your drugs arrive promptly? was everything OK?” but it’s fun to imagine a market research survey about heroin gavaged with repetitive and low salience Likert scale questions asking fifteen minor variations on “do you think it’s a good product?”

    gabrielrossman

    February 17, 2010 at 4:29 am

  2. Re: white customers. I think it is statistical discrimination. They are viewed as “easier” customers.

    fabiorojas

    February 17, 2010 at 4:36 am

  3. Interesting facts. That we call them “cartels” may be more a matter of mass media popularization than economics and criminology. This is from the term paper for a graduate class in Global Crime that I had last semester with GREGG BARAK:

    In order to understand the breadth and depth of the challenge, consider the Mexican drug cartels.

    -“The Mexican cartels have historically been very adaptable, professional, and efficient operations. They have survived changing markets and fluctuating political climates. They benefited from relatively solid internal leadership, an ability to cooperate, a socioeconomic, political environment that needs cartel money, endemic poverty among the population, institutionalized corruption among government, military and police officials at virtually every level, a single-party political system, a differentiation in economics that drives hundreds of thousands of its citizens to illegally cross the border of its northern neighbor, and a huge demand for drugs from the same wildly wealthy northern neighbor. It would be remarkable if organized crime were not a dominant feature in such a sociopoliticaleconomic landscape. Indeed, the cartels and the money they generate are enmeshed in the very fabric of life in Mexico.” (Eskridge and Olson, 114)
    Eskridge, Chris and Brittawni Olson, “The Mexican Cartels and Their Challenge to Popular Sovereignty.” Viano, Emilio C., and Jose Magallanes and Laurent Bridel. Transnational Crime: Myth, Power, and Profit. Durham, North Carolina: Carolina Academic Press, 2003.

    Such criminal enterprises would be wiped out in a day if they were, indeed, “cartels” i.e., nineteenth century structures. The better model, more suited to the present context is the network.

    - “Criminal and terrorist networks are able to use the trust between their members to decreate formal bureaucratic processes and structures, thereby making it easier to escape detection by security organizations. The adaptability, redundancy and decentralized nature of networks make them very resistant to enforcement efforts: removal of some members or even one layer of the network will temporarily hinder, but not compromise, the operational capabilities of the whole network. The versatility of networks also allows them to exploit new opportunities and at little cost, which is very different from slower moving police agencies who bureaucracies are not as responsive. Finally, criminal networks are “boundary spanners”: they transcend borders and override territorial sovereignties, threatening the stability of governments and their citizens. (Gerspacher and Dupont, 348)

    Gerspacher, Nadia and Benoît Dupont. “The Nodal Structure of International Police Cooperation: An Exploration of Transnational Police Networks,” Global Governance, 13 (2007). 347-364.

    Michael E. Marotta

    February 17, 2010 at 12:25 pm

  4. This is really interesting- thanks for sharing Fabio. The dynamics of business model innovation and diffusion were especially fascinating for me.

    I just check out wikipedia and it seems like another important driver of black tar was the low-tech capabilities of the Mexican producers* compared to their competitors. Sounds like this story would make a great case study in business strategy!

    From the 2.5/3 of the articles I read, it seems like they stop in the early 2000s- just when the black tar organisation had reached its prime. It would be interesting to see how (or if) it adapted to the increased attention from law enforcement and competitors over the last ten years.

    *http://en.wikipedia.org/wiki/Black_tar_heroin

    Sam

    February 17, 2010 at 9:36 pm


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