Cartel Hypocrites or Rational Profit-Seekers?

This from Reuters:

“A cartel engaged in Mexico’s deadly drug wars has told its members to avoid heavy drinking and using narcotics and live a clean family life as it tries to build a well-run criminal organization, police say.

Rafael Cedeno, a leader of “The Family” cartel based in the western state of Michoacan, told police after he was arrested at the weekend he had trained several thousand cartel members with courses in ethics and personal improvement.

“The indoctrination of this group consisted of courses they considered to be for personal improvement, values, ethical and moral principles of the criminal gang. The objective was for the subordinates to avoid drugs, hard drinking and maintain family unity,” the federal police said in a statement.”

This was put in Reuters “Oddly Enough” where they feature weird stories, but to economists this is not odd at all. Just as the GM CEO does not want drugged out people making his cars, Cedeno does not want drugged out men selling his drugs or running his prostitutes.

Drug Cartels are rational profit-seekers just like any other business. They are trying to maximize benefits and minimize costs. They will do this by having the most efficient employees they can. During a drug war, I would imagine it is very hard to shoot someone drunk or high. During a drug deal, I would imagine that being drunk or high would increase the chance the other party will steal from you. All of these are bad for business.

The rest is here.


Published in: on April 22, 2009 at 12:42 pm  Comments (1)  
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One CommentLeave a comment

  1. Love this blog I’ll be back when I have more time.

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