Feb 23 • 16:31 UTC 🇺🇸 USA Fox News

Kingpins fall, prices don't: How cartels defy the rules of economics

Despite the recent death of a prominent cartel leader, drug prices remain stable, challenging traditional economic theories about supply and demand.

The article discusses the paradox in the drug trade where the death of a significant cartel leader, such as Nemesio Rubén Oseguera Cervantes, known as 'El Mencho', does not lead to the expected fluctuations in drug prices. Typically, when a CEO or leader is removed from a market, economic theories suggest that prices would become volatile either due to uncertainty or a shortage of supply. However, in the world of illegal drugs, such events seem to have little effect on the stability of prices.

The phenomenon can be attributed to several factors, including the resilience and adaptability of drug cartels. While law enforcement efforts aim to dismantle these organizations, cartels have proven adept at maintaining operations and supply chains, ensuring that their products remain available in the market. Authors like Tom Wainwright, in works such as 'Narconomics', explore these dynamics and suggest that the black market operates under different rules, where factors such as demand, supplier competition, and the illicit nature of the trade create a unique economic environment.

Consequently, even with high-profile arrests or killings, the stability of drug prices reflects a complicated interplay between supply chain resilience, ongoing demand, and the cartel's ability to consolidate power in the face of adversity. This situation raises important questions about the effectiveness of current law enforcement strategies and the broader implications for drug policy and public safety, suggesting that merely removing key figures from the equation may not significantly impact the market as intended.

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