Sample Analytical Essay: The Economic Impact of El Chapo's Capture

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The recent arrest of Mexican drug kingpin, Joaquin “El Chapo” Guzman, ringleader of the Sinaloa cartel, has raised awareness about the inner working of the economic matrix supporting the industry. Those idealists who believe that crime such as this can be ended by cutting off one or two heads of the snake must revisit the Hydra myth. The reality is that the Hydra lives and is regenerated by the desire of the context, and the more energy which is put into prohibition the greater energy the beast of addiction has to feed on. This sample essay, an example of the custom writing services offered by Ultius, shows that El Chapo’s capture will likely have no economic impact on the drug trade, and perhaps the vacuum he leaves will only increase production and violence. The War on Drugs is a sham, a failure, and only enraging the beast with many heads, no less powerful for the capture of “El Chapo”. 

The Economic Impact of El Chapo's Capture

El Chapo is a global celebrity, facilitating the need for a rebel hero to be emblemized. American culture is rife with outlaw heroes, look at Bonnie and Clyde for example, so there is no reason to be surprised when such emblems become reality. El Chapo’s myth is so large in fact, 

Every year between 2009 and 2011, Forbes ranked him as one of the most powerful men in the world. In 2014, the magazine estimated that El Chapo’s Sinaloa cartel was responsible for a quarter of all illegal drugs entering the U.S. from Mexico. Conservative estimates placed the cartel’s annual revenue at more than $3 billion. His reputation even earned him a sort of perverted honor; he was named “Public Enemy No. 1” by the city of Chicago. Such a distinction has not been made since Al Capone. (Blanco)

People become famous and revered for many reasons today, and those who stand in opposition to the status-quo are often revered for their courage. Just six months ago, El Chapo sealed his super star criminal status after breaking out of prison under extremely questionable circumstances. El Chapo had broken out of prison before, and the guards had every reason to be watchful. However, it has been reported that,

Loud hammering was audible in Mexican drug lord Joaquín “El Chapo” Guzmán’s prison cell when accomplices tunneled inside to spring him in July, but guards failed to act (The Guardian).

If this is true than the guards were complicit in El Chapo’s escape either because their families were threatened, they were bribed, or they simply revered the outlaw hero and did not mind his escape. This is one of many examples of how deep seated the cultural respect is for this archetypal figure.  

The real market forces

Just like any other market, the drug market is fueled by desire, and the American prohibitive laws only serve to heighten the demand. The Mexican economy is much different than the American, and in its struggling state, it feeds of the refuse of the behemoth at its northern border. Guzman is one of many businessmen who are called to the need of the beast of American addiction, the dark side of the American Dream. Guzman was the most successful businessman in:

dealing in a commodity upon which our societies are as depressingly dependent as they are on oil: cocaine and other hard drugs, including heroin and methamphetamine. When the financial news reports the current price of an oil barrel or value of bullion, it ought to add the day’s rating for a kilo of pure cocaine, if we are to know what is really going on in the global economy. (Villiamy)

Market analysts and those who look into the example of history believe there is only one way to have a chance of limiting the attraction of drugs, and that is to legalize them all. Prohibition only serves to strengthen the appeal, the danger, and the rebel-like nature of participating. TIME emphasizes:

• As long as consumers want drugs, markets will produce and sell them.
• If drugs were legal, this would occur as in other industries, but since drugs are outlawed, the market stays underground.
• Prohibition likely reduces drug use to some degree, but available evidence suggests a modest impact.
• The Netherlands and Portugal, for example, have far laxer drug laws than the U.S. but use rates that are similar or lower. (Miron)

Removing this dramatic stigma will normalize this enhancing effect, and is worth a try because prohibition does not work and only contributes to the problem going so far as to glorify the drug culture in America. However, prohibition does increase the level of violence associated with this desire being met, and in this way, it is contributing to the damage the drug industry does (Blanco).

Is legalization the answer or will it contribute to the myth of El Chapo?

The greater the levels of prohibition the greater the levels of potential violence and potential reward. The United States has drug prohibition measures placed throughout the world, and the stakes for participating in the drug trade are extremely high. This creates a fulcrum of risk in which:

smaller producers are driven out of the market for drugs. Your “mom and pop” drug producers and sellers see that their chances of getting caught, fined, or jailed have increased. For many, these potential costs are enough to push them out of the market. While this may seem to be a good thing, consider what happens next. As smaller producers leave the market, the price of drugs is driven upward. This means that those remaining producers are going to reap larger profits. This big payoff, taken together with the fact that government is effectively eliminating a large chunk of the competition, means that cartels are more likely to enter and thrive in the industry. (Blanco)

The more risk in a market the more violence will be used to secure that risk, and while some celebrate the capture of El Chapo, others fear the next head of the Hydra will be even more destructive. Because:

In fact, between 2006 and 2012, there have been more than 60,000 drug-related homicides in Mexico. More than 26,000 people went missing in that same period. Some reports claim that the Sinaloa cartel is responsible for more than 80 percent (Blanco).

This violence destabilizes the entire region, inhibiting legitimate businesses, normal economic growth, and creating migrations out of the danger zone. The United States’ drug policy and practices are simply not helping the problem, only creating more tension in both countries. A new approach must be taken. 

Favorable economic signs in legalization suggest different perspectives are necessary

The success of legalizing marijuana in Colorado only emphasizes that the tables must be turned on the drug trade, and approaching it from a different position is a key element of disempowering drug cartels worldwide. The capture of El Chapo is relatively meaningless in the grand scheme of it, and will have no economic impact on how drugs flow. In fact, his capture is

a big media story that serves to distract us from the wider context of state and paramilitary violence in Mexico…For example, a study released last week showed that life expectancy in Mexico has fallen because of the increased homicide rate (telesurtv).

When the public begins to be entertained by this it only empowers the underground market forces which erode culture so drastically.

The economics of the war on drugs

Added to the futility of the effort of the War on Drugs is the enormous waste of money which goes into prohibition. One sample of this is

The U.S. federal government spent over $15 billion dollars in 2010 on the War on Drugs, at a rate of about $500 per second. State and local governments spent at least another 25 billion dollars (Miron and Waldock).

During difficult economic times this incredible expense on futility is all the more appalling, and this is only heightened by a level-headed evaluation of the money to be made through legalization:

• Legalizing drugs would save roughly $41.3 billion per year in government expenditure on enforcement of prohibition.
  
• Approximately $8.7 billion of the savings would result from legalization of marijuana and $32.6 billion from legalization of other drugs.
  
• Drug legalization would yield tax revenue of $46.7 billion annually, assuming legal drugs were taxed at rates comparable to those on alcohol and tobacco. Approximately $8.7 billion of this revenue would result from legalization of marijuana and $38.0 billion from legalization of other drugs (Miron).

Losing the battle and the war

The cost of fighting the Hydra is irrationally expensive and fantastically ineffective. History shows:

Pablo Escobar, who preceded El Chapo as the most notorious kingpin, died in 1993 with no visible impact on drug availability in the U.S. El Chapo himself was captured and imprisoned in 1993, but his brother ran the drug empire in his place. Throughout this period, drugs like cocaine and heroin became cheaper and cheaper. (Miron)

Analysts emphasize this tactic only increases drug violence as it unsettles the make up of the cartels without doing anything to stop them. Recent research shows:

the capture of a kingpin from a particular municipality causes that city’s homicide rate to increase by 80%. This escalation in violence persists for at least 12 months and even spreads to other cities served primarily by that drug organization. (Miron)

These crime trends are disturbing and preventing them grows more and more difficult.

Incarceration often means very little

There is also evidence that past drug kingpins have continued running their businesses from in jail as well. Seeking to find the most effective means of treating this issue in the light that cracking cartel leaders has no effect on the economics or the flow of drugs, researcher have made many proposals. Expert Jeffery Miron suggests: 

The ideal reform, therefore, would repeal federal prohibition while leaving states free to choose their own drug policies. This approach would de-escalate the drug war dramatically but allow for the differences in perspectives across states that is the core of our federalist system of government. (Miron)

The opportunities for positive gain are many, and the chances of success with business, as usual, are few. It is time for a change in policy which will get new results. 

Conclusion

El Chapo’s capture does nothing to address the root causes of the drug industry’s profits, violence, and support structure throughout culture. This move only exacerbates the problems involved with the War on Drugs, further emphasizing the need for widespread policy reform which will disempower cartels for good.

Works Cited

Blanco, Abigail R. Hall. “’El Chapo,’ Cartels, and the Consequences of the War on Drugs.” Independent.org, 20 Jan. 2016. Retrieved from: http://blog.independent.org/2016/01/20/el-chapo-cartels-and-the-consequences-of-the-war-on-drugs/

Carlsen, Laura. “El Chapo is Caught, But Corruption, U.S. Consumption & Failed Drug War Keep the Cartels in Business.” Democracy Now, 12 Jan. 2016. Retrieved from: http://www.democracynow.org/2016/1/12/el_chapo_is_caught_but_corruption

Miron, Jeffrey. “El Chapo Shows the Folly of the War on Drugs.” TIME, 21 Jan. 2016. Retrieved from: http://time.com/4187449/el-chapo-war-on-drugs/

Telesurtv.net. “Chapo Guzman's Capture Distracts from Mexico's Economic Crisis.” Telesurtv.net, 8 Jan. 2016. Retrieved from: http://www.telesurtv.net/english/news/Chapo-Guzmans-Capture-Distracts-from-Mexicos-Economic-Crisis-20160108-0025.html

Miron, Jeffery, and Katherine Waldock. The Budgetary Impact of Ending Drug Prohibition. [White Paper]. CATO Institute. Retrieved from: http://www.cato.org/publications/white-paper/budgetary-impact-ending-drug-prohibition

The Guardian. “El Chapo prison escape: guards ignored loud hammering in drug lord’s cell.” The Guardian, 14 Oct. 2015. Retrieved from: http://www.theguardian.com/world/2015/oct/14/hammering-escape-drug-lord-el-chapo-prison-cell-mexico

Vulliamy, Ed. “How will El Chapo's recapture affect Mexico and narco-trafficking?” The Guardian, 11 Jan. 2016. Retrieved from: http://www.theguardian.com/world/2016/jan/11/el-chapo-capture-joaquin-guzman-mexico-government-drug-war-cartel-violence.