Mexico and US Awash With Cartel Profits

Since 2006, more than 100,000 people have been disappeared or killed in Mexico, a country where more than 90 percent of crimes go unpunished. While running for president in 2012, Enrique Peña Nieto promised a new security strategy for the country, and an end to the highly militarized campaign waged by his predecessor, Felipe Calderón. Since taking office, however, Peña Nieto’s strategy has focused not on the safety of its people but on the confidence of its international investors. To make Mexico more attractive to overseas capital, he has pursued a market-based reform agenda that includes a technocratic overhaul of education, a move to shake up the telecommunications sector and the opening of the energy sector to foreign private investment. New narratives about the “Aztec Tiger” won’t make the kidnappings, beheadings and mass graves disappear, but Peña Nieto is doing everything he can to make foreign investors forget about them.

The irony of touting market-based reforms as a means of sweeping the drug trade under the rug is that the cartels themselves have become some of the most ruthlessly effective multinational capitalist enterprises in Mexico. The cartels are beginning to diversify, making money not just from drugs and other criminal activities like kidnapping and human trafficking but increasingly from control over industries like mining, logging and shipping.

Meanwhile, finance and real estate sectors in Mexico and the United States are awash with cartel profits, with one United Nations analyst arguing that drug money was the “only liquid investment capital” that kept the international economy from completely imploding in 2008. Over the last few decades Mexican capitalism has become a tangled web of legal and illegal activity, and the distinctions between licit and illicit economies have become increasingly blurred. The policies of the Mexican and US governments are only accelerating this trend.

There are two separate but deeply connected histories that have created the situation in Mexico today: first, the neoliberal restructuring of the economy that began in the 1980s; and second, the rise of the drug trade and the cartels that control it. Squarely at the center of both stories has been the Mexican state, whose corruption, incompetence and often contradictory policy choices (in tandem with those of the United States) have served to create vast sums of wealth for a few, while heightening insecurity for Mexico’s working people. When we talk about the drug trade, we are talking about a deeply entrenched part of contemporary capitalism in Mexico, not its undoing.

from here