Review of Tom Wainwright’s Narconomics: How to Run a Drug Cartel

The drug war is under siege for good reason. As the country enjoys a long-term decline in violence, Americans are losing their taste for the incarceration state, and it has become impossible to ignore the role of the drug war in contributing to the social ills that have emboldened movements such as Black Lives Matter. Yet the American public also fears the spillover of violence from the Mexican drug war, in which drug cartel infighting killed an estimated 120,000 people during the Calderón administration from 2007 to 2012.¹ After forty-five years and more than $1 trillion spent since Nixon declared the war on drugs, drugs remain a problem.²

It is in this context that Tom Wainwright generates the public policy views expressed in his masterful, sweeping new book, Narconomics: How to Run a Drug Cartel. Wainwright’s overall message is that free market and libertarian solutions to the drug war, such as Colorado’s legalization of marijuana or Switzerland’s medical heroin program, will be more cost effective than the current prohibitionist supply-side strategies of eradication and interdiction. In this sense, he echoes an important public policy point that drug war opponents have made since its inception. However, he deviates from a purely libertarian and free market perspective when he encourages harm-reduction approaches, such as increased government spending on prison reform. While he is generally correct in his free market prescriptions and criticisms of shortsighted government thrift, I will argue here that free market solutions often require significant state regulation. Thus, an explicitly statist approach focused on better governance, stronger state capacity, and robust state regulatory control over new markets would have strengthened and clarified his argument. This review will proceed by addressing Wainwright’s arguments in sections based on each of his four drug war mistakes.

Narconomics will take its place alongside Moisés Naím’s acclaimed Illicit as a readable book providing policy prescriptions on an important subject—the economics of the illicit narcotics industry.³ Wainwright’s arguments against the prohibitionist supply-side incarnation of the drug war are rooted in an economic cost-benefit analysis that will cement it as a book read by the intellectual elite and thought leaders, as well as contribute to changing attitudes and policies on drugs. He identifies four mistakes in the...