Are cartels good?

Cartels harm consumers and have pernicious effects on economic efficiency. A successful cartel raises price above the competitive level and reduces output. Further, a cartel shelters its members from full exposure to market forces, reducing pressures on them to control costs and to innovate.

Who was the most powerful drug lord in Mexico?

Joaquín “El Chapo” Guzmán Guzman is the most notorious drug lord of all time, according to the U.S. Drug Enforcement Administration (DEA). In the 1980s he was a member of the Guadalajara Cartel and used to work for Miguel Ángel Félix Gallardo.

How does cartel affect the flow of economy?

A typical cartel will influence prices by manipulating competition, agreeing to not reduce prices, or agreeing to reduce the production of goods or services. In addition, while private cartels may have a positive economic impact on the companies involved, the consumer often suffers due to inflated prices.

Why are cartels considered to be bad?

Hardcore cartels (when firms agree not to compete with one another) are the most serious violations of competition law. They injure customers by raising prices and restricting supply, thus making goods and services completely unavailable to some purchasers and unnecessarily expensive for others.

Do cartels undermine economic efficiency?

We find that profitability is higher and productivity and R&D investments are lower during the cartel period. All three types of inefficiency worsen over the cartel period. In sum, cartels are associated with deteriorating allocative, productive, and dynamic efficiency.

What benefits does the cartel bring to the market?

Since cartels restrict competition, they are able to enjoy monopoly power. Products can be sold at high prices to maximize profits. Further, different prices can be charged in different markets based on the degree of monopoly.

Why are cartels beneficial?

A drugs cartel reduces drug trafficking to keep its profits high. Competition in the supply would lead to an over-supply of cheaper drugs, and a cartel charging higher prices and lower output is superior to a competitive outcome. It also requires the product’s price to increase to incorporate the pollution costs.

Is there a difference between drug cartels and terror groups?

Indeed, the behavior of drug cartels, terror groups, and insurgencies can make distinction difficult. Drug cartels can use violence to coerce and intimidate civilians and government personnel alike, just as terror groups use violence to rob banks, hijack trucks, and break people out of jail.

What is a foreign terrorist organization designation?

The Secretary of State is directed to designate an entity a “foreign terrorist organization” if an organization engages in, or has the capacity and intent to engage in terrorist activity or terrorism that threatens the security of the United States or its nationals at home or abroad.

Who invented Mexico’s national security strategy?

As a matter of fact, in the book “The State and Security in Mexico,” Mexican scholar, security analyst and author Raúl Benítez Manaut attributes the original idea to President Gustavo Díaz Ordaz (page 26) who ran Mexico between 1964 and 1970 and was Lyndon B. Johnson’s counterpart for most of his presidency.

Is it time for President López Obrador to overhaul his security strategy?

José Antonio Ortega, president of the Mexico City-based Citizens’ Council for Public Security and Criminal Justice, recently told me the current state of security in Mexico means it’s time for the president to overhaul his security strategy. “President López Obrador’s strategy is not working.