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The Border and the Drug War: Excerpt from 'The Accidental Superpower' by Peter Zeihan

Image: The Border and the Drug War: Excerpt from 'The Accidental Superpower' by Peter Zeihan
Photo of Amazon Web site presenting book The Accidental Superpower: The Next Generation of American Preeminence and the Coming Global Disorder.

By    |   Monday, 15 Dec 2014 08:15 PM

From the book THE ACCIDENTAL SUPERPOWER: The Next Generation of American Preeminence and the Coming Global Disorder

Americans think of the border with Mexico as wild, untamed, lawless — a drug‐ridden, post‐apocalyptic wasteland. Considering the inability of the Mexican government to patrol, much less control, its borderland, there is some truth to American concerns. But that image of the border ignores the depth of the economic and cultural relationship between the two countries. Even before one considers that Mexico is about to experience economic breakout, Mexico’s proximity to the United States has not only landed it with the status of one of the world’s major economies, but is about to make it America’s greatest ever economic partner.

Consider the following:
  • As of 2014, the United States exports to Mexico over 2 billion cubic feet of natural gas and nearly 1 million bpd of refined fuels, while Mexico ships 1 million bpd of crude north. By 2020, American shipments of natural gas will at least quadruple, making it the largest bilateral energy relationship in human history.
  • As of 2013, some $510 billion in goods were exchanged across the border, making Mexico the Americans’ third largest trading partner (second largest with services included). Bilateral trade will likely increase to $650 billion by 2020, making it rival U.S.‐Canada trade for the largest bilateral economic relationship in human history.
  • As of 2014, some 350 million legal border crossings were made. This already makes the border the most crossed border in human history, before considering illegal crossings. Projections indicate that legal crossings will hit a half billion annually by 2020.
  • Mexican failure leads to integration with the United States. Poverty, government corruption, drug‐related violence, environmental catastrophe, and weak infrastructure all increase internal Mexican labor mobility and decrease Mexican labor costs. The bigger the labor cost differential with the United States, the more economic integration between Mexico and the United States.
  • American success leads to integration with Mexico. Wealth, transparent government, improved local security, higher labor and health standards, and strong infrastructure all increase American consumption and American labor costs. Again, the bigger the labor cost differential with Mexico, the more economic integration between Mexico and the United States.

Acceptance of these facts changes the nature of the internal American debates about Mexico. The problem isn’t so much that the Americans can’t decide if they want to integrate with Mexico or not. The Americans are already integrated with Mexico. The issue is that they haven’t decided how to manage the relationship. Side effects of that as yet unsettled relationship are an illegal immigrant community of about 7 million Mexicans and another 1.5 million Central Americans, plus the tens of billions of dollars of drugs that are smuggled into the United States. With issues of this size it is worth spending a little time discussing the nature of the border, mostly because most of the mooted solutions that exist in the American political arena are at best doomed to fail, with most of them being counterproductive.

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Let’s leave aside the above arguments about robust economic interaction and the fact that cultural integration is already well under way with roughly one‐ninth to one‐sixth of U.S. citizens (it depends who is doing the math) identifying themselves as having roots in Mexico. Let’s ignore all the economic arguments about how Mexican immigrants (legal or otherwise) do jobs that Americans don’t want, limit inflation, and serve very real and positive roles in the American labor market. Let’s ignore the moral and legal implications of expunging the United States’ illegal communities. Let’s focus on the border itself. I’ve already said that Mexico — even in the best of times — cannot secure the border.

Well, neither can the United States. The U.S.‐Mexico border is roughly two thousand miles long. Two thousand miles sounds like a significant distance. It isn’t significant. It’s massive. That is double the length of the European Cold War border — a border that could only be sealed by turning the broader region into a national security zone under military rule.

There has also been no small amount of talk of being tougher on immigration. This ignores basic human nature. The U.S. government is far more capable than Mexico’s. Somewhat ironically, the American capacity to deport large volumes of people is part of the structural and organizational strength that so draws immigrants (although I think it is obvious that the specific act of deportation isn’t something that would‐be immigrants are all that fond of). Even stronger illegal migration penalties would not have much of an impact. Mexicans and Central Americans are fleeing not just poverty, but also the insecurity of the drug war and various Central American juntas. So unless U.S. policy is going to be to shoot people on sight in the border zone, the Departments of Immigration and Homeland Security just aren’t capable of counterintimidation of anything like the environments the would‐be immigrants are running from.

So if the border cannot be sealed, if the allure of the United States can‐ not be dampened, and if policy failures in Mexico will only enhance integration, the United States is simply stuck with a large illegal Mexican and Central American community. Considering the lack of viable options in American public discourse, what does the presence of 8.5 million illegal Hispanic immigrants mean?


The North American Drug War


Most have probably heard about the horrors of the Mexican drug wars, where kidnappings, assassinations, mass murders, public body dumpings, and beheadings are regrettably all too common. Many have heard the names of the various cartels vying for supremacy — the Zetas, the Sinaloa, the Knights Templar, and the Gulf (among others). The Mexican government’s own estimate for drug‐war‐related deaths has now topped fifty thousand.

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What is less understood is the link between illegal narcotics and illegal immigration. It is probably not what you think.

Because illegal immigrants are undocumented, they have difficulty gaining access to the basic pieces of modern society, including identification such as driver’s licenses and financial access such as bank accounts. That has a far more damning impact than it may seem at first blush. With limited access to the banking system, illegals operate in the cash economy — they are far more likely to have significant quantities of cash on their person or in their home at any given time. Since illegals fear being discovered and deported, they often do not contact law enforcement when such inevitable attacks happen. In the modern age of credit cards and PayPal, that makes illegals a far more lucrative target for robbers and muggers than even rich Caucasians. There is a term for areas where people who live outside of normal social support networks exist: ghettos. Unique among American immigrant communities, Mexican and Central American illegals live in ghettos. This would be a serious social problem in need of addressing under any circumstance, but new circumstances have pushed it from the serious to the critical.

The drug war of 2014 is considerably different from the drug war of the twentieth century. Moving products is cheaper by water, regardless of whether the product is legal or not. As such, most interstate trade in illegal narcotics — just like interstate trade in any other product—originally traveled by water. In the United States, this made the port city of Miami the premier entry point for illegal narcotics. Small fleets of vessels would swarm from Colombia and Venezuela to Miami, and from there the drugs would percolate throughout the country. The 1980s hit TV show Miami Vice wasn’t just a gripping drama, but was a little bit of geopolitics dis‐ tilled into televised form: local law enforcement attempting to stem a transcontinental smuggling effort backed by untold billions of dollars on both ends.

As a maritime power, however, maritime interception is something that the Americans are very good at. Once the Americans figured out what to look for, they were able to improve everything from port security to Coast Guard patrols, sharply limiting maritime (and airborne) shipments first into Miami, then all of Florida, and in time all coastal approaches. By the year 2000, maritime smuggling routes may not have been severed, but they had become so fraught with danger that there were no longer viable methods for transporting the bulk of the illicit narcotics the Americans so craved.

But one of the quirks of narcotic economics is that addicts at the point of sale are not particularly price‐sensitive. The Americans’ success at blocking maritime and air routes forced the drug flows into more expensive land routes. The sonar and low‐elevation radar that proved so effective at monitoring featureless water and keeping illicit shipments away from American shores proved largely useless at sealing the two‐thousand‐ mile‐long U.S.‐Mexican border, and so the drug flow shifted from Miami Vice to something… else.

One of the (many) reasons that water transport is so much cheaper is that it is so much less complicated. There are no middlemen in the ocean. No towns to navigate. No regulatory agencies that make their homes on the waves. You leave port. You sail. You can sail around anything you don’t like the look of. You enter port. And that is it. On land there are physical borders to cross. You must follow existing infrastructure. You must deal with local regulations, customs, and law enforcement at a plethora of stops along the way. But all this adds more than simply cost. It also ensures that the shippers become intimately involved in every aspect of their transport routes. And should shippers using two different routes find themselves operating at the same bottleneck — say a mountain valley where their routes merge, or an international border crossing — competition erupts.

In the case of Mexico and drugs, these features generate two results. First, they drive up the cost of the cocaine that ultimately reaches the United States. While drug smugglers aren’t exactly sticklers for filing statistical data, the Department of Justice estimates that the Mexican land portion of the cocaine smuggling routes adds about $10,000 to the cost of a kilo of cocaine — about $10 a gram — as compared to 1980s seaborne routes. That is a lot of money being used to employ, corrupt, bribe, and/or heavily arm a great many people across the length and breadth of Mexico’s many smuggling byways. The land‐bound nature of the smuggling routes introduces so many increases to the price of cocaine that it is all but inevitable that large, well‐funded organizations will arise from the trade. Best guess is that the Mexican portion of the drug supply chain has an annual turnover in excess of $60 billion, roughly 4–5 percent of Mexico’s (legal) GDP. For comparison, the U.S. automotive industry comprises about 1.2 percent of U.S. GDP; the total sales of Walmart — America’s largest corporation — are about 2.5 percent.

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Second, it also guarantees that these well‐connected, well‐funded organizations have a lot to fight over. We know that competition as the Mexican drug war or the cartel wars. It pits the various cartels against one another, battling for control of key nodes throughout northern and southern Mexico, up to and including the major border crossings to the United States. Not just the drug war, but the very existence of the cartels them‐ selves would have been impossible if American success in blocking maritime drug shipments had not forced the drug flows inland.

A generation after Miami Vice, the cartels are doing what any major corporation that controls neither the source nor destination of its product would do: diversify. First, diversify horizontally into similar “industries” in which their assets and skill sets are applicable. Things like robberies, cargo theft, and kidnappings are all now in the cartels’ collective portfolio. Most notably, marijuana production and smuggling in Mexico were not part of most of the cartels’ initial prerogatives. Now they are.

Second, diversify up the supply chain to take over direct control of drug production. As of 2014, the cartels already de facto control most of the cocaine gathering and production networks in Peru and Bolivia, the largest and third largest sources of raw coca in the world. The cartels are even chewing away at the Colombian supply system: In a classic case of who‐do‐you‐cheer‐for, the cartels are going head‐to‐head with many of Colombia’s infamous cocaine‐generating entities, up to and including the FARC.

Third and most relevant to this discussion, the cartels are expanding down the supply chain. Long ago the cartels mastered the craft of border crossings. Now they have taken the next logical steps and are getting into retail distribution in the major American cocaine and marijuana distribution hubs. Obviously, border communities such as San Diego, El Paso, and Brownsville were the first targeted, but the cartels are also painfully active in places as far from the border as New York City. A particularly aggressive effort is even under way in British Columbia to seize control of the Canadian province’s marijuana network from the Hells Angels. The cartels have also been very successful in utilizing American public lands, especially in the California state and national parks system, to grow marijuana in large quantities closer to market (not to mention on the cleared side of American customs).

Wherever the cartels go, they come into competition with local American crime networks — oftentimes inner‐city gangs — for control of the local distribution systems. But while the premeditated violence of America’s local inner‐city gangs is no joke, it pales compared to the casual violence of the transnational drug groups that were forged in the culture of the Mexican cartel wars. Add in superior weapons, weapons training, and control over the actual supply of the narcotics, and the Mexicans are rap‐ idly overwhelming — and in some cases co‐opting — their former American sales affiliates.

Finally, there is the illegal immigration nexus. The cartels have found in each major American city one additional — critical — ingredient that has allowed them to put down roots deeper and spread faster than they could in South America or even among their own countrymen: America’s His‐ panic ghettos. The American method for “managing” its illegal population has created a large community in each major city that lives outside the protection of local law enforcement and financial monitoring. The cops’ patrols are less effective without the illegals’ active participation. The Fed has no bank data to work from. The illegals speak the same language — and often come from the same country — as the cartels’ front men. It is a community setup that is perfect for the cartels to recruit from and ultimately control. As with the value of drugs, data as to the size of cartel penetration into the United States is somewhat limited. But the Department of Justice estimates that as of 2013, the cartels are already active in over a thousand U.S. municipalities that include multitudes of communities in the greater Los Angeles, Dallas–Fort Worth, Houston, Atlanta, Kansas City, Denver, Chicago, Detroit, and Baltimore metro regions.

The cartels’ expansion into the United States proper is still in its early stages, so at present their conflicts with American gangs are being swallowed up by the normal noise of gang‐on‐gang violence. But in the not too distant future, the cartels will have (easily) won those battles. And if the cartels are willing to go to war with each other for transport routes through Mexico, it is difficult to imagine that they’ll pull punches when attempting to secure the cash cow of American demand from each other.

From the book THE ACCIDENTAL SUPERPOWER: The Next Generation of American Preeminence and the Coming Global Disorder. Copyright (c) 2014 by Peter Zeihan. Reprinted by permission of Twelve/Hachette Book Group, New York, NY. All rights reserved.

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Even before one considers that Mexico is about to experience economic breakout, Mexico’s proximity to the United States has not only landed it with the status of one of the world’s major economies, but is about to make it America’s greatest ever economic partner.
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