Buyer-Seller Networks & The Status Effect in Narcotrafficking
On October 9th Juan Francisco Sáenz-Tamez,the leader of the Gulf Cartel, was arrested while shopping in Texas. This Mexican criminal organization is responsible for the flow of billions of dollars’ worth of drugs into the United States. By removing the leader of the Gulf Cartel, the Drug Enforcement Agency (DEA) diminished the cartel’s ability to participate in illegal activities and make a profit. His capture was a great victory for American justice, but more importantly it brought the United States closer to eliminating drug trafficking. Although it isn’t apparent, this arrest also decreased the Gulf Cartel’s power in its underground social network.
When partaking in the drug business, the Gulf Cartel’s buyer-seller social network can be modeled as such:
There are an arbitrary number of nodes connected to the Gulf cartel that symbolize some other criminal or organization. The edges connecting the Gulf Cartel to the nodes represents a social exchange between the two nodes related to a transportation of drugs where the value divided is money. For discussion the following example will be used: The Gulf Cartel could deliver a thousand kilograms of a drug to the United States for a drug producer represented as Node 1. The edge would hold the thirty billion dollars of revenue that would be generated from the sale of those drugs in the United States.
The amount each node would receive upon dividing the money is dependent on some obvious factors such as the speed of the delivery, or the distance the drugs had to travel, but an important less obvious factor is the producer’s perceived status of the Gulf Cartel. If the other nodes believe the Gulf Cartel is in a position of power they will expect that the Gulf Cartel will execute criminal activities successfully and trust the cartel as a business partner and give them a higher share of money divided over their edges.
If the drug producers believe the Gulf Cartel is powerful, they will believe that their shipments will arrive and be sold with minimum interference from the law so they will let the cartel have a higher share of the profits. Unlike FedEx, UPS, or trucking companies, there is a high chance that a shipment will not make it to its destination. Furthermore, there is a difficulty to selling the shipment because the shipment is illegal and an encounter with the law could lead to the producers being targeted by the United States and Mexican governments. Therefore, the producer’s perception of the Cartel is a determining factor of the division of money in an edge.
A producer can reconfigure itself and join a different network in order to find a more reliable delivery Cartel, but that reconfiguration comes with a great risk such as retaliation violence from old business partners that wanted to do business or doing business with a more unreliable deliverer of shipments. Those risks give cartels established as quality business partners a lot of power over its producers. For example, just as in a buyer seller network where a dollar is divided between two nodes and the node of higher status has greater bargaining power and receives a larger proportion of money, it is expected that a highly regarded cartel will inflate its status and receive a disproportion amount of money in its favor from an edge. So when the United States took out Gulf Cartel’s leader in attempt to reduce the cartel’s ability to function, the cartel’s producers and other business partners became aware and less trusting of the cartel’s aptitude as a business partner. Therefore, the cartel’s power in its underground social network diminished since its status dropped.
Juan Francisco Sáenz-Tamez’s arrest also brought more violence. When a leader is absent a new leader must take his place. In a world of crime where money and force reign supreme, the internal struggle the cartel faced when determining a new leader led to bloodshed. In addition, a principle expression of a cartel’s strength is its ruthlessness used to accomplish goals. A cartel easily willing to resort to violence is perceived as a one that will do anything for business, and is thus deemed trustworthy. Therefore, it is found that just to assert itself and maintain its status after losing its leader, the Gulf Cartel increased its acts of violence. Distribution of profits between producers and cartels was shown to be highly sensitive to the status effect, and the acts of violence used to raise status indicate that the cartels might even be aware of the status effect at least at an informal level.
Sources:
http://news.yahoo.com/us-arrests-mexican-drug-cartel-leader-221520523.html