Prohibition Spawned Mexico’s Oldest Drug Cartel

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 Mexican Army troops during a firefight in Michoacan // Credit: AP Mexico
Mexican Army troops during a firefight in Michoacan // Credit: AP Mexico

Those old enough to remember Prohibition in the United States remember it as a controversial and violent era.  The passage of the Eighteenth Amendment and Volstead Act by Congress in 1919 prohibited the manufacture and sale of “intoxicating liquor” for recreational use and Prohibition began in January 1920.

The alcohol ban, long championed by the temperance movement, was enacted with the intention of simultaneously lowering the rate of crime and alcoholism in the United States. However, it is often said that the road to hell is paved with good intentions. Rather than lowering either the crime rate or alcoholism, the great social experiment wreaked havoc on communities nationwide.

A study of over 30 major US cities showed crime had risen by 24 percent between 1920 and 1921, including a 13 percent rise in homicides and 45 percent increase in drug addiction.

Another unforeseen consequence was the major boost Prohibition provided for organized crime. This phenomenon was a matter of simple economics: Americans wanted to drink.

Following the law of supply and demand, people from all walks of life created a demand for liquor and criminal organizations supplied that demand through the production and distribution of contraband liquor. These crime groups were willing and able to resort to the necessary corruption and violence against law enforcement and rival alcohol cartels in order to protect their lucrative trade.

Prohibition and Mexico

While Al Capone grew wealthy in the Midwest and Enoch Johnson ruled his boardwalk empire in the Northeast, other entrepreneurs were busy elsewhere. Juan N. Guerra, a Mexican national from Matamoros, entered the bootlegging business in 1929 and quickly took control of all liquor moving across the Rio Grande into South Texas.

Not long after Prohibition’s repeal in 1933, “Don Juan” switched his crime family’s focus to a newly lucrative cash crop. The Marijuana Tax Act of 1937 — passed after only two hours of Congressional hearing—imposed punitively high taxes on the cash crop, driving it from the free market to the black market and increasing both its scarcity and profitability.

Like many drug lords in the mid-twentieth century, “Don Juan” Guerra filled the patronage void which grew as elderly warlords from the Mexican Revolution passed away. Guerra was known for helping the needy by contributing money to churches, charities, and schools while also destroying his rivals and bribing local officials to look the other way. The drug lord is even credited for the 1960 assassination of police commander Juan Octavio Villa Coss, son of Pancho Villa.

With age catching up to him by the 1970s, the drug lord named his nephew Juan Garcia Ábrego his successor. Ábrego responded to new trends and new opportunities in the underground market following the initiation of the War on Drugs by the Nixon administration and its escalation by the Carter and Reagan presidencies.

Though cocaine and the other contraband trafficked by the decades-old cartel had been illegal for decades, the War on Drugs and its crackdowns made these drugs more profitable than yesterday’s commodity, marijuana.

Like Prohibition in the 1920s, government bans and enforcement backfired by making these hard drugs scarcer, in greater demand, and increasingly profitable for the criminal syndicate. By the 1980s, Guerra’s empire had become known as the Gulf Cartel. The cartel stepped up its operations and received half its cocaine from Colombia’s Cali Cartel, another cartel targeted by the U.S. government in its War on Drugs.

Following Ábrego’s 1995 arrest and incarceration, Osiel Cárdenas became the new head of the Gulf Cartel. In order to protect himself and other cartel leaders from rival cartels and the Mexican government, Cárdenas hired Mexican Army lieutenant Arturo Guzmán Decena to recruit soldiers to work for the cartel.

Decena recruited 30 special forces commandos to desert from the Army and form the paramilitary wing of the Gulf Cartel. This narco-insurgency steadily grew to become an independent cartel, Los Zetas, and introduced new levels of brutality to the dog-eat-dog drug trade.

The current Mexican Drug War erupted in 2006 when then-president Felipe Calderón sent federal troops on the offensive against several cartels. The result only made the problem worse, as Mexico descended into an ongoing chain of criminal and state violence bordering on civil war.

Today, the government continues to battle the competing cartels, though high numbers of infiltrators in the military and police undermine the effectiveness of government operations. Zeta Magazine, a dubiously named albeit well-respected periodical, reports the death toll from this quasi-civil war to be over 109,000 as of June 2013.

Many have compared the War on Drugs to Prohibition, as the two episodes of history are eerily similar and quite literally related. After all, Prohibition spawned the Gulf Cartel. Homicide rates in America had reached a peak in the final year of Prohibition, but following its 1933 repeal the murder rate declined nearly 40 percent. No one knows exactly why, but even if the repeal wasn’t the root cause of this steep decline, the correlation is too strong to be ignored.

Once alcohol became legal again, it was no longer practical for criminal groups to kill or be killed over alcohol. The liquor trade went legitimate and competition between alcohol producers shifted from the bloody black market to the mainstream. Perhaps similar decriminalization and regulation of narcotics in the US would lower crime around the country and bring an end to the war in Mexico.

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  1. Terry Stengele Absolutely Yes! We should decriminalize narcotics and regulate them!
  2. Tom Oates Come to Colorado for a Smoke .. we can use the sales tax.
  3. Ian Bell Did you know that you could buy Cocain and Laudinum (opium based pain liquid) over the counter as late as the mid 1900's?? I'm of the opinion that if people wish to destroy themselves with these drugs & alcohol that's their business. If we legalized it, then regulated it just like we have done with "prescription drugs" and alcohol, then we tax it all. We would probably reduce the national debt considerably and we would empty out the jails of all those convicted of "Possession". Take away all the power from the Cartels forcing them to pay back taxes or have their funds confiscated. Reduce cost of Drug Interdiction by several hundred billion dollars. Transfer most of the DEA agents back to the regular police force or Border Patrol. Make a serious dent in the "cash flow" for all the GANGS in this country alone! Probably reduce the amount of violence in our urban areas of every city, as most of that is due to territory disputes of the distribution of illegal drugs?? There are so many positives to legalizing all banned substances. I have a hard time wondering why they keep insisting on this path? (could it be because there is way too much "TAX" money being spent, trying to "control" the flow)?
  4. Billie Nix If we don't legalize it, the Mexican cartels ALL over out public lands are going to burnd down the entire country! http://towncriernews.blogspot.com/search?q=La+brea
  5. Gerry Feldman The concern with decriminalizing addictive drugs is that it would be more likely for a young child to become addicted before he or she is old enough to know the consequences. That said, far too many lives have been lost in a failed attempt to prevent this from happening. IMO it should be legal to use, but illegal to sell or distribute without a permit.
  6. Lloyd Ritchey This should speak volumes about State intervention in market economics in general...but that would assume far more economic education at present than the vast majority of people possess--as evidenced by those demanding it _also_ be taxed.Morons.
  7. Ellen Williams The thing about marijuana is, it's an herb. I believe in using herbs as medicine. There are many drugs that are very dangerous. Most of them are available from your doctor or pharmacist.
  8. Bill Daniel Economics 101... Demand remains constant.. Supply will meet Quantity available at a specific cost... Cost is determined by the aggregate of the costs of inputs including risk... As risk rises, cost increases, as cost increases, market value increases, as market value increases, more participants are drawn into the market... They can compete on price or, as we see, they can compete by eliminating the competition, manifesting itself in the violence we see... Reducing risk (prohibition) reduces market value and lowers the barrier to entry. Many entrants, low market value, the cost of violence as a competitive tool is not economically justified.... Also, reducing risk selectively, such as continuing to maintain the pressure on imported, unregulated product, while allowing for economic production and distribution of native product shifts the economic factors in favor of local production, keeping revenues from flowing out of the country. Works for alcohol, tobacco, and pharmaceuticals..
  9. Debra Idlelies Use the taxes from this type of transaction to fund treatment programs as they do in other countries. Locking people up for drugs is stupid.
  10. Mike Dodson Sounds good on paper but the drug user will still have to mug people to get the money he needs to buy the stuff. Quit trying to sell the public on this idea.
44 comments
Terry Stengele
Terry Stengele

Absolutely Yes! We should decriminalize narcotics and regulate them!

Tom Oates
Tom Oates

Come to Colorado for a Smoke .. we can use the sales tax.

Ian Bell
Ian Bell

Did you know that you could buy Cocain and Laudinum (opium based pain liquid) over the counter as late as the mid 1900's?? I'm of the opinion that if people wish to destroy themselves with these drugs & alcohol that's their business. If we legalized it, then regulated it just like we have done with "prescription drugs" and alcohol, then we tax it all. We would probably reduce the national debt considerably and we would empty out the jails of all those convicted of "Possession". Take away all the power from the Cartels forcing them to pay back taxes or have their funds confiscated. Reduce cost of Drug Interdiction by several hundred billion dollars. Transfer most of the DEA agents back to the regular police force or Border Patrol. Make a serious dent in the "cash flow" for all the GANGS in this country alone! Probably reduce the amount of violence in our urban areas of every city, as most of that is due to territory disputes of the distribution of illegal drugs?? There are so many positives to legalizing all banned substances. I have a hard time wondering why they keep insisting on this path? (could it be because there is way too much "TAX" money being spent, trying to "control" the flow)?

Gerry Feldman
Gerry Feldman

The concern with decriminalizing addictive drugs is that it would be more likely for a young child to become addicted before he or she is old enough to know the consequences. That said, far too many lives have been lost in a failed attempt to prevent this from happening. IMO it should be legal to use, but illegal to sell or distribute without a permit.

Lloyd Ritchey
Lloyd Ritchey

This should speak volumes about State intervention in market economics in general...but that would assume far more economic education at present than the vast majority of people possess--as evidenced by those demanding it _also_ be taxed.

Morons.

Ellen Williams
Ellen Williams

The thing about marijuana is, it's an herb. I believe in using herbs as medicine. There are many drugs that are very dangerous. Most of them are available from your doctor or pharmacist.

Bill Daniel
Bill Daniel

Economics 101... Demand remains constant.. Supply will meet Quantity available at a specific cost... Cost is determined by the aggregate of the costs of inputs including risk... As risk rises, cost increases, as cost increases, market value increases, as market value increases, more participants are drawn into the market... They can compete on price or, as we see, they can compete by eliminating the competition, manifesting itself in the violence we see... Reducing risk (prohibition) reduces market value and lowers the barrier to entry. Many entrants, low market value, the cost of violence as a competitive tool is not economically justified.... Also, reducing risk selectively, such as continuing to maintain the pressure on imported, unregulated product, while allowing for economic production and distribution of native product shifts the economic factors in favor of local production, keeping revenues from flowing out of the country. Works for alcohol, tobacco, and pharmaceuticals..

Debra Idlelies
Debra Idlelies

Use the taxes from this type of transaction to fund treatment programs as they do in other countries. Locking people up for drugs is stupid.

Mike Dodson
Mike Dodson

Sounds good on paper but the drug user will still have to mug people to get the money he needs to buy the stuff. Quit trying to sell the public on this idea.

Matthew Crockett
Matthew Crockett

Each drug has it's own challenges but trying to ban something without societal consensus doesn't work. If enough people want to do something you should just regulate it and leave it at that.

Lera D Logan
Lera D Logan

I agree, but we must be circumspect in keeping DUI as criminal.

Michael Clark
Michael Clark

Decriminalize and/or legalize them all, placing them in the same category as alcohol or tobacco. All of these products have roughly the same not-so-good effects on the human body, so scapegoating just some of them is inconsistent. And most of them do far less harm than the prescription drugs pushed by the pharma cartels.

Kim Villarreal
Kim Villarreal

Yes, the Latin American countries are all ready considering this.

Al Lawrence
Al Lawrence

absolutely. i'm a Libertarian, after all

Paul D. Willingham
Paul D. Willingham

What we've been doing doesn't work. But I think the power elite want things like they are.

Eva Harper
Eva Harper

Won't ever happen, too many are getting rich in the "drug laundering" scheme they have going....they scratch each others backs all the time and the make money on both ends....

David Haney
David Haney

I agree but not with decriminalizing all drugs. Weed has to be first!

William Parks
William Parks

This is why marijuana legalization and other drug policy issues are serious topics. The drug war in Mexico is the second deadliest ongoing armed conflict after the Syrian civil war and it's Americans who are paying for it.

KMN
KMN

Here is your "drug free America" under the federal government's drug wars. They prefer to continue to prosecute and jail adults deciding for themselves to ingest a plant, in their own homes, while big pharma gets a free ride to produce and spread their chemicals, sorry "medicine" like candy.

"Painkiller addictions worst drug epidemic in US history."

"Fatal overdoses [from painkillers] have reached epidemic levels, exceeding those from heroin and cocaine combined, according to the CDC."

http://america.aljazeera.com/articles/2013/8/29/painkiller-kill-morepeoplethanmarijuanause.html

You can call and thank your representatives and that crooked fiend Holder.

Bob Conner
Bob Conner

I'm all for ending the "war on drugs" and even more for unseating a government which fails to understand they're not here to govern personal choice.

And, one cannot respond with the typical illogic of; "but what about the cost to others by the choices of careless partakers?" Laws are enacted to inhibit behavior that infringes upon the rights of others, NOT as a means of controlling personal choice.

We should even use caution while considering levying taxes on drugs as even that has negative ramifications; a perfect example of such legislative blow-back is the black market for cigarettes that has grown substantially with all the government legal actions and taxes in the past decade or so.

http://www.npr.org/templates/story/story.php?storyId=129934561

jway
jway

We pay $billions each year to fund a prohibition that makes our children less safe. What fools are we! Marijuana is far less harmful and less addictive than alcohol and we could prevent a lot of the harm that alcohol causes by giving people the right to choose marijuana instead of alcohol. Our government should NOT be arresting 800,000 people/year for wanting to choose a far safer alternative to alcohol! That is madness. It is stupidity and I will NEVER vote for any person who supports continuing this idiocy!

Malcolm Kyle
Malcolm Kyle

Some simple facts:

* Prohibition has been a slow but relentless degradation (death by a zillion cuts) of all our cherished national and international institutions that will leave us crippled for numerous generations.

* The US federal government is now the most dangerous and corrupt corporation on the planet.

* In 1989, The Kerry Committee found that the United States Department of State had made payments to drug-traffickers. Concluding, that even members of the U.S. State Department, themselves, were involved in drug trafficking. Some of the payments were made even after the traffickers had been indicted by federal law enforcement agencies - or even while these traffickers were under active investigation by these same agencies.

* Colombia, Peru, Mexico, or Afghanistan with their coca leaves, marijuana buds or poppy sap are not igniting temptation in the minds of our weak, innocent citizens. These countries are duly responding to the enormous demand that comes from within our own borders. Invading or destroying these countries, thus creating more hate, violence, instability, injustice and corruption, will not fix our problem.

* A rather large majority of people will always feel the need to use drugs such as heroin, opium, nicotine, amphetamines, alcohol, sugar, or caffeine.

* The massive majority of adults who use drugs do so recreationally - getting high at the weekend then up for work on a Monday morning.

* Apart from the huge percentage of people addicted to both sugar and caffeine, a small minority of adults (nearly 5%) will always experience the use of drugs as problematic. Approx. 3% are dependent on alcohol and approx. 1.5% are dependent on other drugs such as methamphetamine, cocaine, heroine etc.

* Just as it was impossible to prevent alcohol from being produced and used in the U.S. in the 1920s, so too, it is equally impossible to prevent any of the aforementioned drugs from being produced, distributed and widely used by those who so desire.

* Prohibition kills more people and ruins more lives than the drugs it attempts to prohibit.

Michael Higham
Michael Higham

Some marijuana/cannabis activists support treating the substance like alcohol, but the historical argument you laid out is just as strong a point.

This may extend to other substances, too, but I'm a bit hesitant about that.

Alex Gauthier
Alex Gauthier

those with doomsday projections for legalizing the other drugs should really take a good look at alcohol. It's dangers are well known as well as its addictiveness and yet it remains legal and millions of drinkers can and do enjoy it responsibly.

Charlotte Dean
Charlotte Dean

the simple fact is that reducing levels of hard drug addiction will be entirely dependent on the government's ability to control and regulate the supply. I'm in favor of decriminalizing most illicit substances so that addicts are forced to walk through a gauntlet of supportive programs focused on tapering of addiction in order to get a fix.

As far as alcohol goes, it's infinitely more harmful than cannabis, and those decrying the impending legalization of "yet another addictive substance" are failing to consider the therapeutic benefits of killing emotional and physical pain with THC instead of booze. With the sky high rates of depression and mental illness in society, and the reluctance of most taxpayers to drown their sorrow in anything other than a socially accepted substance, the legalization and subsequent societal normalization of cannabis as an alternative depression-killer will give millions an EXPONENTIALLY greater chance of remaining functional, killing the sadness, and enjoying the sober life again.

DM
DM

Live and let live... In the privacy of someone's own home, and as long as they don't put anyone else in harms' way, it is their own business. At the point that they are harming someone else or infringing on someone else's freedom, then you hold the person accountable for that, not the tools they used to commit the act. The world would be a whole lot nicer if people would just mind their own business. As I was taught.. Do unto others...

Charlotte Dean
Charlotte Dean

we have to look at it as the safer alternative, one that will cure minds instead of dull them and save thousands every year from drunk drivers. We may still be several decades away from comprehensive tests on THC and driving capacity, but anyone with experience will tell you there's no greater cure for unpredictable and irrational driving that often gets even sober people killed or injured. I'm hoping the self-driving car is popularized before that battle against THC DUIs is fought. If it's legal to drive under the influence of anxiety medication, then there is a rich legal discussion waiting to be had about THC in the brain, and differential effects depending on person, strain, and method of consumption.