Economics of the Drug Trade and the Rise of Mexican Drug Cartels | The Gateway Pundit

Open borders, illegal immigration and lax enforcement of the law have allowed drug cartels to expand their influence in the U.S., killing more than 100,000 Americans each year with drugs and committing violent gun crimes that often go unchallenged or prosecuted in liberal jurisdictions.

The largest category of homicides in the U.S. is drug and gang related, with about a third of gun homicides in some cities linked to gang activity. Globally, about 22% of all homicides are gang related.

Meanwhile, school shootings, while a concern for many liberals, have claimed an average of only 53 lives per year over the past eight years, including both adults and children.

Gangs play a central role in the drug crisis because they finance their activities primarily by selling drugs. The resulting gun violence often stems from drug deals gone wrong or turf wars over distribution control.

The high profit margins in the drug trade make it attractive for individuals to risk their lives as distributors.

Meanwhile, the Mexican cartels, which rake in billions, are proving difficult to contain. The revenues they generate far outweigh those of most legitimate alternatives, making it nearly impossible to convince them to switch to legal business.

Mexican cartels profit from marijuana, cocaine and fentanyl, but an analysis of the economics reveals why fentanyl has become their biggest moneymaker. Fentanyl now accounts for about 80% of overdose deaths and fuels countless gang killings in the U.S., making it the cartels’ new moneymaker.

Marijuana is bulkier and less concentrated than other drugs and has a lower wholesale price, ranging from $3,500 to $10,500 per kilogram. Also, the margin at street level is less dramatic.

In contrast, cocaine is much more profitable, with import costs ranging from $93,000 to $163,000 per kilogram, yielding significant profits when broken down into smaller quantities for street sale. Fentanyl represents a major economic shift.

For as little as $1,500 to $3,000 per kilogram, it can be cut and sold in pill form, generating up to $20 million in revenue. These figures are illustrative and may not reflect the exact current prices of drugs.

That said, the large disparity in profit margins is still evident, especially for synthetic drugs like fentanyl. This underscores the economic incentives that fuel Mexican drug cartels’ dominant position in the drug trade, further strengthening their influence over the global drug trade.

Over the past four decades, Mexican drug cartels have transformed from marijuana and heroin traffickers in the 1980s into dominant forces in the drug trade. Initially, they lacked the flash and influence of Colombia’s Medellín and Cali cocaine cartels, which at the time controlled the lucrative cocaine market and wielded considerable political and economic power across the Americas.

In the 1990s and 2000s, however, the Colombian cartels were weakened by law enforcement and internal conflict. Mexican cartels expanded their role in transporting cocaine from South America to the U.S. They seized this opportunity and gradually gained control of much of the cocaine trade into the U.S., while growing increasingly powerful and wealthy.

By the 2000s, Mexican cartels had expanded beyond cocaine to marijuana, heroin and new synthetic drugs such as methamphetamine and fentanyl, which were sold for huge profits.

The versatility of cartels like the Sinaloa Cartel and the Jalisco New Generation Cartel (CJNG) has made them even richer and more powerful as they focus on new synthetic drugs and other illegal activities.

Human trafficking, now a major source of revenue, generates more money for some cartels than drug trafficking. In addition, Mexican and Latin American cartels work with U.S. street gangs such as MS-13, the Latin Kings, and Tren de Aragua to control drug distribution networks, illicit labor, and sex trafficking in U.S. cities. These partnerships give cartel dominance in both the drug trade and other criminal enterprises.

In addition to their illegal activities, cartels have diversified into legitimate businesses, such as avocado exports, where they control farmers and demand protection money. The growing popularity of avocados in the U.S. has given cartels another lucrative revenue stream.

They also invest in mining and real estate, which further consolidates their financial power. As with any business, diversification helps cartels weather market fluctuations. When one market slows, another flourishes.

Selling drugs, prostitution and other vices offers a major advantage: they are largely recession-proof. Cartels continue to profit during economic downturns because more people turn to vices during hard times.

Meanwhile, economic recessions and political instability in Latin America are creating a constant influx of people desperate to enter the US in search of more revenue.

In some cases, cartels smuggle individuals on credit, exchanging debt for labor once they arrive, securing cheap and captive workers. This is cartel economics 101: adapt, diversify, and profit regardless of market conditions.

This entire system of crime, drugs, violence, overdoses, prostitution, cartel power, and gang growth in the US is perpetuated by an open border policy that not only allows illegal entry, but incentivizes it with the promise of possible citizenship.

There is little deterrent for those who cross the border illegally, because they know that in most cases they will not face significant prosecution. In the worst case, they may be caught and released or sent back to Mexico to try again.

This lack of serious consequences fuels a continuous cycle of trafficking, as individuals see minimal risk, while cartels profit from the steady flow of migrants, offering access in exchange for future labor or high fees. This creates a lucrative, sustainable business model for the cartels, further cementing their power.