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New -- 21 March 2008

Capitalism has the unfortunate tendency to run amuck. Inevitably the emphasis on the bottom line leads to actions that go far beyond fair competition, the providing of valued services and products, as well as meeting the societal goals of equal access to the wonders and progress of modern life.

It has, in fact, been observed that the primary reason the Aristocracies of yesteryear found the capitalistic merchant class to be so disgusting (not to mention revolting -- pardon the pun) was the latter's overridding focus on making money, making more money, and setting aside every imaginable ethic, moral, or piddling legality in order to make yet more money. From the aristocratic viewpoint the only valid means of acquiring great wealth was via inheritance (and/or bequests, gifts, benefactions, or largesse). This viewpoint works extremely well for the individuals with the gold inasmuch as the rule succinctly phrased as 'dem wid de gold makes de rules" constitutes -- for them -- a sound economic system.

The advocates of capitalism, meanwhile, note that at the very least one of the premier advantages of capitalism over hereditary titles and wealth is that the former is an equal opportunity system of economics. Anybody with the drive, ambition, aggression, and moral flexibility to overcome all obstacles can succeed -- and often wildly so.

A premier example of capitalism taken to its logical extreme is personified in what has become known in song and legend, as the Narcocorridos. Essentially, the title refers to the pop songs celebrating the exploits of any number of the drug cartels who are now operating in Mexico. [For more information on these modern day bards, see, for example, Wikipedia, BBC News, Washingtonn Post, and Planet Papers.] It is worth noting that many members of these drug cartels have become folk heroes to many poor Mexicans [1] -- the latter being at the opposite end of the financial spectrum from the aristocracy.

If we might through the time-honored concept of literary license, apply the honorary title of Narcocorridos to Mexico's more successful drug cartels... and my logical extension to the drug-financed warlords of Afghanistan, the Columbian drug cartels, Cambodian drug entrepreneurs, any drug-financed Mafia style organization (Italian, Russian, et al), and so forth and so on -- we might begin to explore in more general terms, this logical, if not inevitable extension of capitalism in extremis. What is being explored here is a business which deals with a product in heavy demand, but which commands a premium price because the supply sources are under the constant threat of destruction, interdiction, and disruption by a whole host of governments and potentially well-meaning warriors. When supply cannot meet the demand, the price goes up. The price also goes up when the distribution channels decrease the supply available at the end user point. That is the lesson from the U.S.'s ill-advised experiment in Prohibition.

To give some perspective on the various world-class organizations dealing in drugs, we might consider the example of Mexico's three main drug cartels, who "are effectively in control of the country's Pacific Coast, industrial heartland, and tourist havens of the Gulf Coast." [1] In the true spirit of the more successful warlords in history (including modern day), these three Mexican corporations combined are grossing between $8 billion and $23 billion a year... just for transporting roughly 90 percent of the cocaine, heroin, marijuana, and other illegal drugs flowing from Columbia to the United States. Few illegal drugs are actually produced in Mexico, so we're really only talking about capitalism's middle men in this case -- the existence of which is due in large part to the strenuous attempts by the United States to block the Columbians from reaching the end user markets without recourse to smuggling the goods through Mexico. Many drug organizations routinely control the sources of the drugs -- so don't assume that the Mexican cartels will always limit themselves to their current, middle men role.

The Mexican drug cartels' current activities are instructive enough. For example, they "have corrupted very level of government, from local policemen to army generals to presidential aides." The United States (allegedly inadvertently) provides most of their weapons -- which include assault rifles, powerful handguns, "machine guns, rocket-propelled grenades, bazookas, and even shoulder-fired missiles." Many of the gang members have also benefitted from training as the federal government of Mexico's elite special forces! [1]

In the true spirit of competition, the Narcocorridos have also routinely practiced murder, maiming, and orture (including, in other words, activities officially sanctioned by United State's President Bush). And of course they have also practiced continual intimidation and threats to order to accomplish their goals -- a charge applied to both the drug cartels and President Bush. Many of the deaths at the hands of the Mexican brand of Narcocorridos have been very singers of the pop songs; those performers who have typically been financed by one drug cartel, and then taken out by a rival. In addition, "Since 2006, the cartels have been responsible for the murders of more than 3,500 people, including many innocent bystanders, while thousands more have been maimed." [1] Curiously, this is roughly the same number of American soldiers who have died in Iraq. In fact...

"The level of brutality rivals that of death squads in Iraq." [2]

One might surmise that these dudes are not to be ignored, and in fact -- as one note driven with an ice pick into the head of the commander of a local police drug squad sucinctly read, "So you will learn to respect."

The Coming Trend?

One might legitimately ask [pardon the pun] where all that money -- $8 billion to $23 billion a year for Mexico alone -- is going. When you don't have a Haliburton to consume tens of billions of dollars as a regular diet, whatever do you do with all of that money? Keep in mind this is money which is not someone else's, and thus the entrepreneurs who think of it as theirs, are much more likely to carefully consider their options.

First of all, note the range of estimates. Somewhere, between $8 billion and $23 billion -- i.e., $16 billion, plus or minuse $8 billion. This is not exactly an estimate worthy of the standard accounting procedures advocated by the Securities and Exchange Commission. On the other hand, we're not talking about people who dutifully file accurate and complete income tax returns on a regular basis. In fact, one of the key arguments by those who would like to legitimize the drug trade is because of the taxes that could then, supposedly, be collected by governments... in effect, the clear heir apparent to the drug cartels.

There are, of course, operating expenses for the drug cartels. In addition to employee compensation plans, retirement funds, health benefits, alternative retirement funds, and strict adherence to equal opportunity employment practices -- all of which cost substantial amounts of money -- there are also bribes, cost of weaponry, hit contracts, and the contruction of fortress-style haciendas and staging areas. This is, after all, business, and it must be treated as such.

Still... when the money keeps rolling in... and rolling in and rolling... any financial expert worth his salt is going to be looking for ways to invest the profits in secure, stable, and profitable, alternative ventures. Inevitably, this requires a broadening of one's perspective and thus the necessity to invest the profits in what might be termed... for lack of a better description... legitimate enterprises.

For example, take the tourist havens of Mexico's gulf coast, parts of which are already being referred to as the Riviera Maya. One of the best known spots is the spit of land near Can Cun, in the State of Quintano Roo, where first class hotels abound. In addition to these world-class beach front hotels and neary by recreational activities sufficient to rival Disneyland, there are also the spectacular Mayan ruins of Chichen Itza, Tulum, and a whole host of other sites. We're talking a destination for millions of tourists, both foreign and domestic. Much of this is elaborated upon in the Can Cun Con article.

For our purposes here, the emphasis should be placed upon the conversion -- aka money laundering -- of drug money in the form of hotels and beach front condominium complexes, into Time Share investments by all those tourists who are looking for a piece of paradise for their very own and to which they can return on a regular basis. The money from the Time Share sales can then be easily invested in virtually any legitimate investment in the world. It's really a very, very effective means of converting the money from a "score" on the streets of LA, to holdings in such stalwarts as Citibank and Chase Manhatten. It is, in essence, capitalism at its best.

Other stellar tourist destinations are located in Columbia and/or Indo China, where globetrotting travelers can be well-protected in enclaves for the wealthy tourist and in locations where the epitome of rest and relaxation can be had at really quite excellent prices. Clearly, it is merely only a matter of time before the Warlods of Arghanistan begin building first class hotels along the foothills of the Himalayas where first the oil developers, and later the more adventurous of Western travelers can slack their thirst for spectacular beauty and creature comforts back at home base.

If all of this sounds a bit distressing, consider the fact that by legalizing such drugs as marijuana, cocaine, and heroin, governments could eliminate a massive portion of the profits of the drug cartels, an enormous amount of the operating expenses (those caused by the illegal nature of the business), and at the same time, provide a major new source of revenue for the governments in the form of income taxes.

Any chance of this happening in this century? Probably not. The very idea earnestly promoted at the federal level would probably result in the congressional proponent being summarily tortured, maimed, and/or killed... in an unfortunate accident.

Cartels as Corporations without Portfolio

Besides... and this is where this essay has been leading from the outset... what exactly is the distinction between the drug cartels the world over and the so-called legitimate corporations doing business in producing, distributing, and selling wares ranging from food, prescription drugs, automobiles, and computers to Barbie Dolls? Are the cartels merely corporations who have not yet bothered with the niceties of registering their enterprise with some official government? Are the use of small armies to support their business operations merely a precursor of the means by which so-called legitimate corporations will compete ever more aggressively in the modern world?

What in fact exists to prevent corporations from increasing their bottom line by the simple expedient of adopting competition techniques bordering more on the use of weapons, intimidation, threats, and the like? How many corporations currently use small armies to protect their intellectual and other property rights?

In many respects, cartels (drug, et al) are really just proto-corporations -- at least in the sense of already acting like corporations in all business-like respects... but with the adding convenience of being able to use traditionally prohibited practices of intimidation and bribery.

Of course... come to think of it, bribery by corporations is already rampant in goverment and other circles. Admittedly, not too many have alleged that Disney, for example, is using murder as a means of increasing its market share. But is it only a matter of time?

What natural forces might actually prevent such things?

On a perhaps more basic philosophical level, is what we're witnessing here merely the capitalistic version of survival of the fittess? [In that context see also Homo sapiens sapiens, Enhancements, and several fictional references.] Is Survial of the Fittest Corporation ready to take its place alongside survival of the fittest individual and local, state, and national groups?

Is there, realistically, any rational alternatives?

There is a Chinese Curse that says, "May you live in interesting times."

I would suggest that these are indeed "interesting times." The good news, hopefully, is that... again from ancient Chinese wisdom... in chaos there is opportunity. Interesting times may in fact yield a degree of chaos, from which may spring... exactly what?

In the end, if the eggs are broken -- and importantly, if all of the king's men and the king's horses are at a lost as how to put them back together again -- then we all need to learn how to make a really good omelet. Just no peppers for me, as they tend to upset my digestive system.



[1]  "The gang war that's ravaging Mexico," Briefing, The Week Newsmagazine, March 21, 2008.

[2] Report prepared for Texas [President Bush's home state] Governor Rick Perry, as reported in [1].


Success         Work Ethic         Capitalism         Corporate Rule

CEOs         The Rule of 20-50         Independent Accounting Firms

Outsourcing        Stock Tips

Forward to:  

Can Cun Con

American Foreign Policy         Globalism, Neo-Tribalism and False Reality


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