The Jordan Harbinger Show - 387: Tom Wainwright | How to Run a Drug Cartel

Episode Date: August 6, 2020

Tom Wainwright (@t_wainwright) of The Economist shares the harrowing and sometimes grisly experiences he endured while writing Narconomics: How to Run a Drug Cartel. What We Discuss with Tom Wainwright: The parallels between the drug trade and regular businesses. How ideas of economics and business apply to any entrepreneurial or business venture. How drug cartels engage in corporate social responsibility, branding, and even PR campaigns. Why drug cartels franchise, regulate labor, branch out online, and diversify into legal (and ubiquitous) industries. How an economist gets discovered wearing a GPS device to a meeting with a drug lord and lives to tell the tale! And much more… Full show notes and resources can be found here: jordanharbinger.com/387 Sign up for Six-Minute Networking — our free networking and relationship development mini course — at jordanharbinger.com/course! Like this show? Please leave us a review here — even one sentence helps! Consider including your Twitter handle so we can thank you personally!See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Coming up on the Jordan Harbinger show. When a Mexican cartel goes and rolls five severed heads onto a disco floor in Michoacan, you know, it's an avoidably dramatic thing. We're just not used to thinking about these organizations as being like companies. My argument is just that really if we want to defeat these guys, we've got to understand how they work. And the key to understanding how they work is recognizing what they are, and that is profit-motivated businesses.

Welcome to the show. I'm Jordan Harbinger. On the Jordan Harbinger show, we decode the stories, secrets, and skills of the world's most fascinating people. If you're new to the show, we have in-depth conversations with people at the top of their game. Astronauts and entrepreneurs, spies and psychologists, even the occasional Emmy-nominated comedian. Each show turns our guest's wisdom into practical advice that you can use to build a deeper understanding of how the world works and become a better critical thinker. And today, another one from the vault. We're talking with Tom Wainwright, author of Narconomics. He's a writer at The Economist, love that rag, and we're looking at the parallels between drug cartels and regular businesses.

I just found the concepts so interesting and compelling that I wanted to do a show on this. You should listen to this episode if you're interested in how ideas of economics and business apply to any entrepreneurial or business venture, how cartels engage in corporate social responsibility, which has me laugh and just thinking about it, branding and even PR campaigns, how cartels franchise, regulate labor, branch out online, and, even diversify into markets that produce and transport products that we all consume in our daily lives. If you're wondering how I manage to book all these great authors, thinkers, and celebrities every single week, it's because of my network, and I'm teaching you how to build your network for free over at Jordan Harbinger.com slash course.

By the way, most of the guests on the show already subscribe to the course, so come join us. You'll be in smart company. Now, here's Tom Wainwright. Tom, this is interesting because I heard the title of book, and I thought, all right, is good, right? Because we're all fresh off Narcos season two. And I thought, wow, economics and drugs. Where do I sign up? I mean, it sounds just like college for me, sort of. And you've done a really interesting book here. You wore a GPS device to meeting with a drug cartel leader, and it didn't work. So that was kind of what hooked me into this. And I thought, this guy,

this guy's crazy. This is the craziest economist that I've ever heard of, because economics, generally a field not known for its wild child type of outlook. How did you get interested in drugs? Well, I got sent out to Mexico in 2010 with The Economist, and you're right, this wasn't kind of natural territory for me. It wasn't the kind of story that I was expecting to follow, but, you know, I got there, and it was just at the time that the drug war in Mexico was really taking off, and the murder rate there was going through the roof. And I'd been expecting to write stories about regular kinds of business. You know, I thought I'd be writing about the car industry there or tourism, that kind of thing. But I arrived and found very quickly that the only thing people really

were interested in talking about was a different kind of business, namely the drugs business. So I found myself writing a lot about it. And the more I did, the more I covered this industry and the more I spoke to the people involved in it, whether they were the cartel leaders or the traffickers or the consumers or the rest, the more I realized that actually this business was, really a business like any other, and it had various things in common with other kinds of business. So I started thinking, well, what would it be like if we wrote about the drugs business as a business? Because most of the coverage that you read in the newspapers and the items that you see on the TV about the drug war treat it as a war or as a crime, you know, and the

coverage is very dramatic. But I thought, how would it be if we wrote about these cartels as if they were ordinary companies and analyzed them in that way? What will we learn? So I started doing that and gradually found that, you know, if you do think of them as being companies, then you learn one or two things about them that perhaps wouldn't previously have been obvious. Why do you think the coverage is just based on the criminal element of it? Do you think it's just that we're addicted to drama and that's more exciting or is there something else going on? I think the drama is definitely a part of it, you know, I mean, when a Mexican cartel goes and rolls five severed heads onto a disco floor in Michoacan, you know, it's

a sort of unavoidably dramatic thing. And it doesn't surprise. me that that's the thing, the detail that journalists go for, but we're just not used to thinking of it as being a business, partly because also, I mean, a very obvious point to make, but, you know, the very fact that it's illegal means that we're not accustomed to thinking about these organizations as being like companies. And obviously they don't file annual accounts, you know, and they don't give press conferences and so on. So covering them as businesses isn't completely straightforward by any means. So I think our whole sort of culture is geared towards writing about the drug war as a sort of dramatic criminal thing. And it is all of those things. I'm not trying to claim that it's not

criminal and that it's not immoral. I think it's both of those things. But my argument is just that really if we want to defeat these guys, we've got to understand how they work. And the key to understanding how they work is recognizing what they are. And that is profit-motivated businesses. So that's the sort of key thing that we've got to bear in mind when we write about them. And And until now, I think we've failed to do that. Our coverage of cartels has been very, very sort of black and white, and it hasn't bothered to look very closely at the numbers behind the business, hasn't bothered to look very closely at the real motivations of these guys. We write about them as if they're purely motivated by a kind of bloodlust. And there is some of that. But above all,

what makes these guys tick is money. And if you follow that, then you understand more where they're coming from and what they might do next. Yeah, exactly. We've got to hit him in the wallet, for sure. because to get rid of anything like this, we can't really treat the symptoms, which are people who've already been affected after a lifetime of using this stuff or years of using this stuff, we've got to get to the real reasons

that this is happening. And economics is interesting, and correct me where I'm wrong because you're an economist and I am not. I have an undergraduate degree that included some classes in this, so you're slightly more qualified than me.

But economics is more or less a science, right? There's a lot of numbers. Sure, you can spin them in whatever way that you want, just like science. But on the other hand, it's really hard for the actual data to lie, right? Because if you're looking at things through an eye that tries to mitigate bias as much as possible,

you end up with a certain set of conclusions that I would imagine most economists would agree with. So this is an interesting take on this subject because it's not done for political reasons. It's not done for moral reasons. This is just, here's what's happening with the numbers. Here's how the numbers can be corrected in order to correct the problem that we're facing.

And that's what you sought to take. a look at with this book from my view of it. Well, I guess that's part of it. Yeah. I mean, you've always got to be a little bit careful with statistics and numbers because, of course, people can and do lie with statistics and numbers. You know, you can use them in a misleading way and statistics to do with the drugs business are no different in that sense. But I think that if you do apply the numbers properly, then you do bring a kind of rigor to the analysis that sometimes is lacking. And people often just don't use the right numbers. I'll give you one example, just soon after I arrived in Mexico, there was this event when the Mexican armed

forces had just made a huge seizure of marijuana on the edge of Tijuana. It was about 100 tons of the stuff. And it was widely reported that this was all worth about half a billion dollars. And this struck me as a huge, huge amount of money. And so I had a look at how they'd done it. And what they'd done was they'd taken the retail price of cannabis in the United States and they'd gone for a kind of conservative of estimate of $5 a gram. And they'd multiplied this out over 100 tons and arrived at this figure of half a billion dollars. And that sounds perfectly sensible and you might think, okay, that's a kind of economic approach. But if you apply that to any other business, it's clear that that's a crazy thing to do. Imagine if you did that, say, with coffee and you said, okay, here we've got

a kilo of coffee in Colombia. How much is that worth? Well, a cup of coffee in Starbucks and the United States costs two or three dollars. And in there, you get a couple of grams of coffee. so let's say it's about a dollar a gram. Therefore, a kilo of coffee in Colombia is worth $1,000? No, right? I mean, that's fairly obviously wrong. And yet that's exactly what we do with drugs. You know, we constantly do this thing of calculating the price of drugs seized in Mexico using retail prices in the States or in Europe. And that's why we get these very, very inflated numbers. And it just made me think, that's just one example, but it made me think if we're getting basic stuff like that wrong, what else are we getting wrong in our understanding of the war on drugs?

where else are we overestimating the effectiveness of our current policies? So I think bringing some numerical insight and applying statistics and so on is important, but you've got to use the right ones. And part of the arguments of my book is that at the moment we're using numbers in a kind of innumerate way that would really stand out if this were any other business. But we tolerate it because in the war on drugs, we're not used to thinking about this as a real business. Right. We're used to looking at the propaganda involved on both sides. And that makes sense, right? So instead of looking at the street value of a drug haul, we have to look way down the supply chain and look at where this is created and what it's worth over there. And I recall from the book that

you'd written something that actually surprised me quite a bit, which is that cocaine's not any more valuable than coffee at its source, but law enforcement costs, smuggling, criminal organizations, that kind of thing. That raises the price by 30,000 percent once it gets to the United States. When we're looking at the raw material itself, it's not worth much more than any other crop that you could grow in the exact same place. Well, that's exactly right. And that's because it is just a plant, the coca bush, which is the main ingredients of cocaine, is pretty easy to grow.

And if you go down to South America, as I did, and go to the places where they're growing it, you can see that it's just an ordinary cash crop. And you're right, it's not worth very much at all. To make a kilo of pure cocaine powder, you need about a ton of fresh coca leaf. and in Colombia, for instance, that turn is worth probably about $500 or thereabouts, which is nothing. And of course, by the time that kilo of cocaine makes it to the United States, it's worth probably more than $100,000. There's a huge, huge increase in the price of the stuff as it makes its way along the supply chain. That leads us to an important insight, which is that at the moment, a lot of our efforts to stop the supply of cocaine are focused at the very beginning of the supply chain.

And that kind of sounds sensible. You know, nipping the thing in the bud sounds as if it makes sense, you know, going really early on and stopping the thing at its source sounds like a sensible policy. But it doesn't really make sense because if you consider the increase in the price of the thing as it makes its way along the supply chain, interrupting it early on, means that you're not really hitting the cartels very hard at all. Let's say you manage to double the cost of growing coca leaf in Colombia by spraying weed killer on the crops, by uprooting it and doing all these other things that they do, you're going to double the cost of the coca leaf from, say, $500 a ton to $1,000 a ton. But if you pass that increase in price onto the final product, you're only increasing the price

of a kilo of cocaine from, say, $100,000 to $100,500, i.e. you're hardly doing anything. And the comparison that I make in the book, imagine if you're trying to increase the price of paintings, works of art, and you say to yourself, okay, the main ingredient in a painting is paint. And so what we're going to do is we're going to try to drive up the cost of a box of paints from $50 to $100. And we hope on that basis that we're going to double the price of this million dollar painting to $2 million. Fairly, obviously, that's ridiculous, right? Even if the artist did pass on that increase in the price of paint to the buyer, you know, you'd be talking about a difference of $50. And that's exactly what we're doing with the cocaine business. We're trying to drive

up the price of Kokeleaf, hoping that this will have a dramatic impact on the price of cocaine in the States or in Europe. And it's not. And when you just look at the economics of it, it's not remotely surprising that this is failing. So my argument is if you look at the numbers, it's clear that we're focusing our efforts really in the wrong place. This is a huge bummer because what this essentially means is that all of our interdiction efforts that happened before the U.S. border are not doing nearly as much as we would like them to do. Because cocaine, again, is not that valuable until it gets to the U.S. border, right? So we almost have to wait until it gets to right there and then go, oh, we got everything, right? And that's really hard to do. It's kind of like

if you're playing a game where you have to catch a ball, it's like saying, well, I need to catch the ball right at the peak of the arc instead of where it lands, which is really, really, really, really hard to do. You'd have to time it. And basically, I would say, almost impossible to try to do that every time reliably. So we can't hit supply, is the conclusion here. We have to hit demand. Well, I'm not saying you can't hit supply at all, but yeah, I think if you're going to focus your limited resources in one area, then yeah, it makes more sense to focus on demand. You get more bang for your buck, if you like, if you focus on the demand side of things. And on supply, I mean, the people who are involved in this, they're brave people doing good work. And earlier you mentioned the show Narcos.

You know, you watch that and you see the incredible risks that service people, both Americans and Colombians, take in order to try and stop these guys. You know, I admire them for what they're doing, but I do think that they're focusing their efforts in the wrong place. Because, as you say, if you try to interrupt supply, you're going to find that if you do it early in the chain, you have very little effect. And if you do it late in the chain, you'll have more of an impact. But by that stage, it's very, very difficult because by the time the product makes its way to the states, it's dispersed into tiny quantities of just a few grams here and there. And you can lock up those dealers, but by then, you know, if you try and lock up every dealer who's shifting a gram or two of cocaine, you're going to end up

locking up, you know, a very, very large number of people, which indeed is exactly what has happened in the US. So for those reasons, yeah, I think the demand side is where to, you're going to, you're to focus our efforts. And if you spend the money on trying to reduce demand for these drugs by educating young people to take fewer drugs, to treat addicts so that they can reduce their consumption, you do end up having a much bigger impact. And there are all kinds of studies that proved this. There was one that was done a few years ago, which compared the impact of spending a million dollars at different points in the supply chain. And I believe the impact they calculated of spending a million dollars on intercepting cocaine in South America was a reduction in the

amount consumed in the States of about 10 kilos or thereabouts. And if you spend that million dollars instead on treating addicts in the state, you can reduce the amount consumed by about 100 kilos. So you get 10 times more for your money than you would otherwise. And this is taxpayers' money. You know, it's tax dollars and tax euros and tax pounds that are being wasted, flying helicopters around in Colombia, when we could be spending that money doing other stuff, which would actually do more and is proven to do more. So the demand side, i.e. focusing on the consumers is where we should be focusing not so much on the supply side, i.e. chasing people around in Colombia. So if the price of coca, for example, is the same as coffee at its source, why don't

farmers in Bolivia and Mexico grow coffee instead of coca? Because they can make more by selling it to the cartels. It's still worth a fair bit more than coffee. It's very, very cheap compared with what it eventually fetches in the United States or in Europe. But the price that they can get is somewhat higher than coffee. There isn't a huge, huge difference. I remember I spoke to a guy in Bolivia who grew this stuff, who grew Coke leaf. And I said, well, look, why don't you do other stuff? There are loads of crops out there that you could grow. And he said, well, you know, raising chickens was something that he'd be interested in doing, but he didn't have the money to start up a chicken business. And he said that overall he wouldn't make quite as much. And there

are various programs that go on there in South America designed to try to get farmers to grow other stuff. So the European Union sponsors something to try to get farmers to grow tomatoes instead, or tomatoes, as you might say. And similarly in countries like Afghanistan, there are programs to try to get opium farmers to grow other stuff. And I think that's probably, you know, it's a more humane way to go about things than spraying their crops with weed killer and uprooting them. Trouble is there, you find that it's pretty easy for the cartels actually to just offer a slightly higher price again for the coca, because the profits involved in the coca leaf are so, so great that it's pretty easy for the cartels to up the price that they bid. So ultimately, I think trying to outpriced the cartels and get farmers onto growing other crops, it may be a better way of going about things than spraying coconut leaf with weed killer,

but it's pretty tough because the markup involved in the drugs business is such that the cartels can outbid pretty much any other crop that you try to direct farmers to. So again, I think the supply side, trying to fix things in Colombia at the source of the problem, though it sounds very sensible, actually the evidence is that it has a pretty limited. effect. Right. And of course, the demand for this that creates all the profit creates new technology and ways to grow things like that just because there is a push on that side. It's almost like they're getting subsidies at some level, right? I mean, there's a lot of people who know what they're doing being hired down there to help grow this stuff that aren't just farmers. There's experts helping people grow even more, making it more resilient, hiding it from the air and making it grow fast,

All these different things that you get when a crop is actually worth money are now happening with coca down there. So it really does sound like a losing battle. And I think everybody knows that we are losing the war on drugs, at least from this end as well. It's really disturbing to me

that you end up with essentially what are like the Mexican Navy SEAL type forces, the Zetas, going and starting essentially a wing of a cartel that becomes a cartel in itself. And you end up with these crazy pseudo-legendary figures like El Chapo, who's escaped from prison multiple times

and sounds like something out of a television drama that ran out of storylines. Ah, let's just have him escape from prison again. Ah, let's have him escape again. It's just, it's ludicrous. And the popularity of shows like Narcos are bringing more attention to this subject. By the way, when you are interviewing farmers

and people involved in the drug trade, do you speak Spanish or do you have a translator? I speak Spanish with them on the whole. I mean, it's funny, some of them actually have spent a lot of time in the States. And one guy that I was interviewing in a prison in San Salvador, we were speaking in Spanish, and then he referred to the fact that he lived for many years in Los Angeles.

And so his English was probably much better than my Spanish. But no, usually I spoke with them in Spanish. That's the easiest way on the whole to communicate with people down there. Yeah, I figured. I was just wondering if you had a translator because that's a job that I don't know if I would pick up if I saw an ad for it. I don't know. It would be interesting.

You'd get some interesting vocabulary, wouldn't you? When I arrived in Mexico, my Spanish was pretty limited, and I gradually learned a bit more. and the kind of words that you learn are intriguing, you know, words for people who are found locked in the trunks of cars and people who've been shot with machine guns and that kind of thing. So the vocab was kind of different to what I'd learned in England. But, yeah, interesting stuff.

Wait, what are these words? You can't leave us hanging on this. There's different names for people that have been found locked in the trunk of a car. They just have a term for that. Oh, God, yeah. No, you're asking me now. Sorry, it's a few years since I've been out of Mexico, so I can't remember what it was.

There was particular words that are used for people who were, found in the boots of cars, people who had different words, people who've been executed in different ways, you know, people who've been just wrapped in tape to suffocate them, the slang terms of all of these different forms of execution, which are very unpleasant. That's really gross, though. It's almost like they're doing it so much,

they need a shorthand for this. That's really disturbing. Yeah, it has a vocabulary all of its own, and it's pretty grim stuff. You wore a GPS device to a meeting with a drug cartel leader. First of all, what was your wife thinking when you were doing all this research. I mean, your family must have been like, are you crazy?

They must not have slept for the years that you were down there and doing this book. Yeah, they were a bit of a change from my usual kind of work in London. I think they were kind of intrigued by the whole project. My wife was very good at kind of tracking my whereabouts using this GPS thing, and I'd check in with her now and again and let her know that I was still alive. It was interesting. You know, I'd kind of roam around all these bits of Mexico and Central America and South America meeting these interesting guys and getting interviews that weren't really,

exactly like the kind of interviews that I've been doing before. But, you know, when you speak to these guys about the businesses that they run, the companies that they run, some of the things they say do kind of echo the comments that you hear from middle managers and other companies. You know, they all like to complain about their employees and the way that managers always do. They complain about the treatment they get from the government, although we're talking about slightly different kind of complaints from the ones that ordinary firms might have. But yeah, it was the kind of exciting role to have. I guess it was pretty frightening sometimes going to places like, you know, Juarez and places like San Salvador where the level of violence is extremely high. But I guess one thing I'd always bore in mind was that the real high risks are really faced by the Mexican journalists. They're the ones who often are placed at greatest risk because they're the ones who actually have to live in these cities permanently. You know, I was based in Mexico City, so I'd fly into somewhere like Juarez and do my interviews and then make sure that I was on the flight back. It's a different situation for the local journalists who live in these cities and have to report on crimes and the people they're writing about very often know where they live and where their families live.

And the levels of violence against Mexican journalists are really through the roof. So the kinds of risks taken by foreign journalists like me really are nothing compared with the ones faced by local reporters. You're listening to The Jordan Harbinger Show with our guest Tom Wainwright. We'll be right back. And now back to Tom Wainwright on the Jordan Harbinger. A friend of mine a while ago who's a writer was doing something about the cartels as well, and one of the journalists that he was working with had to disappear, and so he asked me to connect him with certain people who can make that happen.

It's very tough. It's very tough to get somebody out of a country without anybody knowing. Surprisingly, you would think, oh, everybody gets across this poorest border. It's really hard when the people looking for you are the people that run people across the border. It's really, really hard. Oh, absolutely, yeah. I'd be fascinated to hear how you did that because it's not easy to move people around in that way. You know what? We did it through the Darian Gap. You know what that is?

Oh, seriously. Wow. You picked a difficult one. Yeah, well, we figured that it was probably one of the best ways for him to disappear without dying. But then also had a high risk in and of itself. But it was kind of like, do you want to jump off this five-story building? Or do you want to swim across this shark-infested bay? Like, it was just one of those kind of situations for this guy. But Sudad Juad Juarez, where you were, is dangerous because it's one of the gateways for drugs to the U.S. 70% of traffic is what you'd estimated. And at one point had the highest murder rate in the world.

And so you're kind of hanging out here. Where are you conducting these interviews? I'm interested. It depends on really on the person. But in Juarez, I remember speaking to, let's see, business people who had problems with the cartels. I mean, that was one of the most interesting sources, actually, of interviewees. You know, the extortion business in Juarez was a big deal when I was there because of the the time, there was a big, big battle going on between the local Juarez cartel and the Sinaloa

cartel, which at the time was trying to take over the city there. And in order to raise funds for the battle that they were having between each other, both cartels were levying what they call a piece so a kind of extortion money on local firms. So often I would speak to business people in their places of business. You know, it could be bars or wherever shops. And I'd speak to people there. I spoke to government people in their offices, police officers. I went to kind of community projects in some of the slums there. It's not a completely safe city to be in. But I thought that, you know, the main thing that I tried to do

is just to stay off the streets most of the time and go from appointment to appointment and stay inside rather than just kind of strolling aimlessly around looking like a tourist. So I tried to make sure that I had a pretty full diary and go from appointment to appointment. Yeah, I mean, the violence that you described there is so vicious. It was the stuff of nightmares, really. There's no getting around it.

Do you ever think about this stuff and kind of wake up with a shiver? Some of the stuff you write about is really graphic and gross. Yeah, it's pretty grotesque. I guess not. No, I tend to sleep reasonably well, to be honest. I think part of the thing that appealed to me about writing about the cartels in the way that I did, you know, as an economist or as a business journalist, was that you can kind of get around the drama of it and just boil the business down to its basics. You know, there's always so much emphasis on the drama and on the kind of gruesome detail.

and if you get completely lost in that, then I think you can lose sight of the more important points. But yeah, you're right. I mean, there's no getting away from it. The kind of levels of violence out there are just excruciating when you see videos of the sort that ISIS, Islamic State,

put out now. You know, some of that stuff is nothing compared with what's going on in Mexico and what's being funded by people who buy drugs in my country and in yours. One of the things that I read in your book was something about Kiki, the federal agent that is referenced actually

in the beginning of Narcos where they said, Kiki died for all of us. And I was like, what does that mean? So I looked it up. We'll link to it in the show notes, but don't read it if you are sensitive because you just can't stop thinking about how gross what they did to this federal agent was.

It's just like, it's really, it's inhuman at every level, really kind of insane. And so, yeah, when you're this close to it, it just seems terrifying. But I understand that, you know, you're looking at this drug cartels, they're global conglomerates, they're massive businesses.

In fact, you'd written that cartels would be one of the top 40 countries in terms of economics if they were a country instead of a business, right? So we're talking like Walmart style. Yeah, absolutely. Business is very opaque, obviously, by its nature. But the UN reckons that worldwide every year, it's worth something like $300 billion a year. So in country economy terms, I think it would be just ahead of Israel, you know, if the drugs business were a country.

It's a pretty serious economy. They really use that economic power. And if you look at some of the countries where they operate, particularly ones in Central America, where in many cases the state, the government is very, very weak, the cartels just have the upper hand. And I remember going to interview the security minister in Belize, which is this tiny, tiny country with a population of, I think it has about 400,000 people. So, you know, it's really, really small. And at the time, Belize, the government of Belize didn't own a single helicopter between them. And they're up against these cartels, which have not only helicopters, but they've got their own primitive sub- Marines, they've got sort of basic tanks. They've got all kinds of things. And their power to outgun and outspend governments in that part of the world is immense. And their power to corrupt as well. And they do a lot of work corrupting police officers and soldiers. And in many cases, even corrupting senior members of the government. Mexico, some years back, discovered that the guy who they named their drugs czar, the main guy fighting the cartels, was in fact himself working for

one of the cartels. And when you see the profits that these cartels made, it's not surprising that they have the budget to bribe these guys even at the very highest levels. So we're really facing a very, very serious adversary. And at the moment, I worry that we're not doing a terribly good job at beating them. Yeah, it's terrifying. It really is. And looking at some of the same problems that cartels have, you're looking at some of the same problems entrepreneurs have,

multinational businesses have, I'd love to explore some of the parallels that we see here. Because, yes, we have things like systematic police, murder, which is sort of like dealing with a regulatory agency, which is kind of a weird way to sugarcoat that. But cartels even do things like PR campaigns, and it's just really, really interesting to see how the problems have to be handled in the same way. Let's talk about the PR. I mean, this is something that I was really surprised by that cartels are campaigning with locals, doing PR to get local villages and cities to support one cartel over another, typically by painting one as worse or more

criminal than the other, which to me, that just was too meta. I had to wrap my head around that, and it took a second. And you end up with other cartels naming themselves things like the auto defenses, which is basically like the self-defense brigade, and they're supposed to be this anti-cartel militia, and they're a freaking trafficking organization. Yeah, yeah. No, I mean, the hypocrisy is just incredible. But you're right, they do go into these surprising PR exercises. You wouldn't have thought that public relations was high on the list of priorities for a drug cartel, but actually they do seem to take it very seriously. And in northern Mexico, sometimes these signs appear often hung up from freeway bridges, accusing other cartels being very immoral, you know, and it will say something like

El Chapo never kidnaps people. He just is involved in the drug trade. He never commits violence against others and that kind of thing. And of course, it's total rubbish. But it helps to persuade some people that, you know, one cartel is better or worse than the other. I think the kind of height of this PR activity is a form of what really looks like corporate social responsibility, and it sounds crazy. But again, if you watch that show Narcos or if you read about Pablo Escobar, one of the interesting things about him is that despite the fact that he brought stunning levels of violence to Colombia, he remained in many areas a popular figure. You know, his funeral was attended by thousands of people. And it was because he sprinkled a few pesos here and there on

community projects. He paid for housing projects. He paid for sports facilities. And similar things go on now in Mexico. In Mexico, there's occasionally you find churches which have plaques on the outside saying this church was kindly constructed with funds from Senor So-and-So. And it turns out Senor So-and-so is the leader of a drug cartel. And these guys, by spending their money here and there, they managed to secure a kind of basic level of support among the public. And without that basic level of support, it's much harder for them to remain at large because the police rely on the public to give them tips, to let them know where these guys are. And the cartel kingpins, in fact, managed to stay at large through a mixture of, admittedly, plenty of intimidation. That's one reason people don't report them.

But it's also because they do have genuine support in some areas, because they spend their money on the community. You know, they have in some cases in Sinaloa, there's supposedly a primitive form of social security that has been set up by El Chapo's Sinaloa cartel. And so many people there do actually think twice about reporting them. You know, this isn't a country where the government is always as active as it should be and providing opportunities for impoverished people. And so when you've got a guy who's made a lot of money exporting some product to a foreign country, you know, and he's willing to spend his money on building good stuff in the local community, whether it's a clinic or a school or housing or whatever, some people actually think, well, hang on, you know, are these guys all bad? Should we

be reporting them. And so the cartels really put money into this. Corporate social responsibility and public relations is a very, very big deal for them. They take it very seriously. You know, who else does this? Are organizations like Hezbollah, where basically they start to, like you said, build schools, build clinics. And it puts the criminal organization, the mafia, in competition with the state to provide. So it's kind of a genius strategy because you get cautious acceptance of the local people, especially when the state cannot provide. And of course, the state's busy. trying to fight cartels and deal with the criminal element, so they have to divert resources to that.

So it's kind of this cycle that fulfills itself, right? Oh, the state's running out of money because they're fighting criminal gangs. They can't keep schools and other organizations up to snuff. Let me use some of my illicit funds to help build this stadium instead. And now you end up with this putting the people, the common people against the state

with respect to this problem, which is a huge obstacle to eradicating this issue in the first place. And it's just fascinating to me that cartels are actually, brand conscious. It just seems like something that wouldn't be necessary, but if you don't have to intimidate a certain rung of people on the ladder here, you can end up with a base, right? You end up with a base, and those people can protect you. It's kind of an extension of the plata or plomo, which is lead or silver, essentially, which also sounds straight out of narcos, where either you

take the bribe and you take the money and you take the benefits, or they just do something horrible to you, like wrap you up in duct tape or whatever it was that you'd mentioned earlier. These cartels are also managing their image by making killing and violence either really public or by hiding it and dragging away the bodies, banning the news stories. And I found really interesting that the most dangerous time to be outside in Mexico is 5.45 p.m. because they'll often kill random people, cartels will, in an area in order to make the evening news and then promote army crackdowns in the area. And they essentially, they do this on rival turf to get public eyeballs on how much violence is happening on some rivals turf and then get the government to

intervene so that they can get a leg up on a rival cartel. That's exactly right. Yeah, it's a clever strategy. Often the cartels do their best to convince the government to act in particular areas, effectively so that they can use the government's forces against their own adversaries. And as you say, you often see this phenomenon where a cartel will carry out some extravagant act of violence in another cartel's patch so that, you know, they could dump. a dozen bodies somewhere in the middle of a, you know, busy shopping streets or something like that. It's a kind of act of violence that the government just can't ignore. And when they do that, you immediately find a greatly increased presence of soldiers there and federal police. And that makes

it much, much harder to do business in that area. They call it heating up the plaza. You know, by that they mean making it harder for the cartel to carry out its ordinary business transactions on its usual turf. There, I think there's a lesson for the government in Mexico and other countries, which is that when you see a very big extravagant act of violence carried out, say, on the turf of, let's say, the Zetas, for example, you shouldn't immediately assume that this was done by the Zetas and therefore send a load of soldiers to this area to crack down. You should perhaps assume maybe this act of violence was carried out by the Zetas arch rivals, and maybe you should send your soldiers to the place where they're active instead. That might do more to deter these sort of very public acts of violence for public consumption. But you're right, it's all part of a strategy that the cartels have. to try to direct the state's resources for their own benefits, because if you can make the army go to where you want them to go, then suddenly that's a lot of firepower that you've got at your disposal absolutely free of charge.

Right, exactly, paid for by the taxpayer, unfortunately. Cartels as well control the media message, of course. A lot of news outlets won't report on certain battles or they'll make a big deal out of another battle or other violence. And what you end up with is the same thing that happens when media is corrupted or under central control in other places, which is you end up with social media starting to play a larger role. So there's a city that its name escapes me from your book

where they use Twitter to keep citizens safe and tell them what's blocked off and where there's ongoing violence because the news outlets are just not reporting on this stuff accurately or in a timely manner because there's cartel influence. That's right. The city you're referring to is Raynosa in the state of Tamalupas. It's a border city right on the border of the states. And over there, the local press have found that they just can't really report on the drug war at all. They started doing it, but they found that anybody who wrote a story about the local cartel conflicts very quickly found themselves being intimidated or worse.

And so what the local government has done there is set up a Twitter account. And they just tweet these very sort of elliptical messages saying, situation of risk in a certain zone, you know, don't go here. It's just a very simple way of letting citizens know to avoid particular areas. And, you know, they don't say in these reports who's fighting who. They don't give details because they've learned from experience that that upsets the cartels. But they want to give people just a very basic level of understanding of what's going on. So they do it via Twitter. And you find also various websites have been set up to provide the kinds of details that ordinary newspapers or TV stations can't or won't provide.

I mean, there are various blogs that provide very gruesome details about the latest tip for tat killings in the drug war. And that's where people go for their news. Facebook groups are another one. And these places provide a place for people to share stories about the drug war, which are, you know, not subject to the kind of censorship that the mainstream media have to use and not subject to the kind of intimidation that the cartels can employ because the very nature of Twitter and Facebook and so on is that it's somewhat easier to retain your anonymity, although some people have found that they haven't been able to do that. And some bloggers who thought they were anonymous have ended up paying the price for that. But it's true. Social media is an increasingly important. way for people to share information about the war on drugs because the regular media in Mexico has found itself really muzzled by these guys. Well, even El Chapo's kid, didn't he tweet about him hanging out with my dad and then they caught him because of that? What a moron. Well, supposedly, yeah. Some of these children of the narcos have got these extraordinary Twitter accounts where they tweet about their latest Ferraris or their gold-plated guns or whatever. And it is amazing that the level of impunity in some parts of Mexico is such that these guys can

really make no pretense about where their money comes from and still get away with it. We found the Twitter account of his son. Let's take a quick two seconds. Ivan Archivaldo Guzman, followers, 167,000. And yeah, his cover picture is him with a hat, and then the background is like a bunch of different sports cars, crappy low-res photo of a bunch of different sports cars. It's usually, he's into cars and kind of very exotic guns as well. You'll probably find some kind of gold-plated guns if you scroll down his feet. and the diamond and crest of weapons.

Hanging out with hot chicks at some bar that clearly live in like the Campo with no shirts on jumping up and down. And there's, oh, flying in my helicopter. And then his face blurred out with two random, like, babes, street racing, hanging out of his plane. Yeah, new Ferrari. You weren't kidding.

Him in some boats. And, oh, yeah, wow. All the car keys of either all his or him and all his friends. And there's Mercedes, Ferrari, Bentley, BMW, Maserati, Lexus, and pretty much everything else. No, Tesla, though. Not into the Tesla yet. No, the charging points are, I think range anxiety is probably a big deal if you live in the desert. So maybe one day. Exactly. If only you could run your car on cocaine. And yeah, here's a gold-plated

AK-47 in the driver's seat of a BMW picture. Yeah, and the rest of it is literally just that times a thousand. You can just keep scrolling down and it's all it is. It's just that over and over and over again, pretty much what you would expect from a guy who owns a nightclub in Miami kind of guy. That's exactly what we're looking at here. Yeah. But yeah, that's, I'm afraid the state of play over there at the moment. I mean, you went to jails in El Salvador interviewed leaders of gangs like Mara, Salvatrucha, 18, or DSiotro, right? I mean, you're talking about the gangs deciding to collude and not kill each other. And the statistics you give are just incredible. 70,000 lives lost in the 90s, yet a 10% chance of being murdered in El Salvador, period, plain and simple. And then

they decided to collude and not kill each other, and violence falls by 66%. Yeah, that's right. It's crazy. And the change that you referred to, that big drop in the violence, it happened more or less overnight. You know, if you look at a graph showing the number of murders in El Salvador, it wasn't something that happened slowly over time, you know, it was something that literally happened overnight. And the reason was that the two big gangs there, the Mara, the Mara, Sarasabathrucher and 18th Street gang signed an agreement or made an agreement with each other that they would form a kind of ceasefire. And instantly the level of violence dropped like that. You know, and it just shows how much of the violence these gangs are responsible for. But it also shows that the sort of economic behavior of these gangs can have a big impact on the amount of violence in these countries. It was an economic decision by these guys that they thought that colluding would probably increase their profits more than competition would. So they decided to go for that. And the country became a far, far, safer place. So that's a kind of interesting story for people who think that economics can be a way into

this subject. It just shows that a single business decision by a couple of gang leaders can instantly transform the security situation in a very troubled country like that. So the story of El Salvador, I think, is one for people to look at. And since then, the pact there has broken down. And as I understand it, the country now has become a very violent place again. But it lasted for, I believe, a couple of years or thereabout. there was a kind of piece in that country or a relative piece due to the changing dynamics between

these two gangs. So I think it's worth some further study to see if that kind of piece can be replicated because El Salvador shows that it can be done, at least temporarily. This is the Jordan Harbinger show with our guest Tom Wainwright. We'll be right back. After the show, we've got a preview trailer of our interview with Angel Investor Jason Kalakhanis. If you're a founder or interested in business or ideas, you're going to want to hear this. So stay tuned for that after the close of the show. Thank you for listening and supporting the show. Your support of our advertisers keeps the lights on over here.

Check out all the links to those amazing sponsors at Jordan Harbinger.com slash deals. And don't forget, we've got worksheets for today's episode as well. That link is in the show notes at Jordan Harbinger.com slash podcast. And now for the conclusion of our episode with Tom Wainwright. These cartels even keep wages low because there's no competition for talent. In other words, it's very hard to go from, one to the other. And the way that they do this is kind of grossly ingenious. The tattoos, especially that gangs like MS-18 have on their face, they show allegiance to one side. So in Mexico,

bangers can switch based on who pays more or has power. But in places like El Salvador, these face tats, not only do they prevent you getting any kind of real job whatsoever, pretty much forever, but they're basically cattle branding their members, right? It's like, if you've got that, you can't switch back to Windows, you've already got three Macs and an iPhone. Yeah, yeah, that's exactly right. And this was brought home to me when I went to meet the head of this cartel, the 18th Street gang and his jail cell in San Salvador. He was one of these guys who, they look extraordinary. They're tattooed literally from head to toe. And I was sat there interviewing him and just wondering where this tradition had come from of the kind of all-body tattoos. And I thought about the sort of labor market economics of it. And I think the way you describe it is exactly right. It does give these gangs, these cartels, the kind of ownership almost of their employees. Because imagine a regular employee, if you're good at your job, you may get an offer to work somewhere else. You know, you might try and get a job with a different company. You know, if I get sick of working at the economist where I am at the moment, if I feel they're not paying me enough, I could try and get a new job at, I don't know, time or something like that.

But that would be somewhat harder if I had the economist tattooed on my face, you know, I find it a bit more difficult. Yeah, yeah, good luck getting rid of your. Following that logic is exactly what the gangs in El Salvador have done. You know, if you've got 18th Street gang tattooed the whole length of your body, going for a job interview with the Marisavutrucha is going to be a more bracing experience, to say the least. And so they retain a kind of ownership of their employees, and it means that they're able to keep wages very low. And it's one of the great paradoxes of the drugs business. You hear about the billions of dollars that are made in profits, and that's true. It is a fantastically lucrative

business. But you meet the guys who are working as part of this industry in a country like El Salvador. And for the most part, they're not rich guys. You know, they're making a few dollars a day. And part of the reason for that is that the cartels exert this very, very powerful control over their employees. Cartels further, though, they do the same thing as other mafias do, right? And in New York, for example, sanitation, they've got what we would traditionally refer to in economics as a cartel where they agree not to lower the price for their bids to a certain

level so they can extort, or at least in the past, they could extort the taxpayers to get higher pricing for waste disposal and things like that. No, that's right. The kind of price fixing is something that you see in all kinds of regular industries. And that's the point where organized crime and legitimate business have sometimes met in the past, because the mafia has always played a role in many places of sort of enforcing these price fixing agreements. So I read this one great study actually. I think it's just about the earliest study that anybody's ever done of the mafia. It was done in Sicily and sometime in the 19th century. And it was a study of the, I believe, the milling industry, as in the the flour milling industry. And the millers there realized that if they fixed their prices, they could make more money than by competing. But the problem was that they couldn't rely on each other to uphold this agreement. You know, the worry was that one member would break the agreements and undercut the rest. And so they got a bunch of guys who were basically the mafia to enforce this agreement. You know, they all paid these guys on the understanding that if anybody broke the agreement, then the

mafia would go and sort them out. And so that was one of the very first roles that the mafia played. They were there to make sure that these legitimate businesses didn't stray from the price-fixing arrangement that they had made between them. And you see similar stuff going on in garbage collection industry in New York. Historically, that's an industry which has had a big, big involvement of the mafia. And again, the role that it has played there has been to protect certain contracts from competition. And it's interesting because when you get that kind of interaction between organized crime and regular business, it becomes a lot harder to stamp it out. You know, if organized crime is something that all of society is against, then getting rid of it is much easier.

When it's something that actually a lot of people in society have a stake in preserving, when you find that legitimate companies actually find the mafia useful in enforcing bargains between them, or when you find that local people are in favor of the mafia because the mafia provides them with public services in the way that Pablo Escobar did, you find that actually summoning the kind of popular pressure to get rid of these guys is much harder because they've, made roots in society, you know, and they've got people on their side. So those kinds of links are very, very important to cut out, because the more you can isolate organized crime groups from the rest of society, the easier it is to stamp them out. On the other hand, the more those groups embed themselves and get their tentacles into bits of legitimate society, whether it's the

business community or just ordinary people, the harder it's going to be to get a kind of consensus that they have to go. So that should be a priority for all governments. extortionists are franchising as well. Can you briefly explain the concept of what a franchise is in business and then explain how the cartels are also doing this? Oh, sure. Well, I mean, just briefly, probably the easiest way to describe a franchise is to picture an organization like McDonald's or say like Starbucks, you know, any kind of chain like that where very often you have a central headquarters which runs the operation and then they will allow franchisees, local business people to set up, say, a McDonald's restaurants. And the deal is that the local,

business person gets to use the McDonald's brand, they use the McDonald's recipes and all the rest of it. And in return, the central organization takes a cut of the revenues of that local business. And it's been very successful in the fast food industry, for example, it's a very, very quick way for companies to grow because it means that the company doesn't need to raise a lot of money to set up new branches because the franchisee pays much of the startup costs. It means that consumers all over the country or all over the world know what they're getting. You know, if you order a Big Mac in London, it's the same one that you'll get in Los Angeles or the same one that you'll get in Beijing. And so for consumers, it often helps to, you know, increase the branding power of that

particular organisation. So it's been very successful and surprised, surprised that drugs business has gotten onto this as well. And when I was in Mexico, one of the big stories of the time that I was there was the spread of this gang called the Zetas. And they spread very, very quickly, you know, within the space of just a couple of years, it seemed that they've managed to set up a branch in every city. And so I looked at the situation and thought, well, how have they done this? And immediately it reminded me of organisations like McDonald's. And so I looked into it and it seems that the Zetas are doing something very similar. What they do is instead of sending their own employees to a city to go and set up a new group there, they will send some agents there and talk to local criminals who run the show

down there and say, look, okay, how about this? You can use our brand. We'll lend you the Zetas brand. And in return, we want a cut of your earnings and we can provide you with some training, with and weapons and with our logo and so on. And it's extraordinary. You find in some parts of Mexico, Zetas camps have been raided and they even find that these guys have got branded baseball caps and T-shirts and that kind of thing. It really is like a franchise. And it's helped them to grow very, very quickly. But the thing is, it's a problem, obviously for Mexico, because these guys are growing very fast, but it's a problem also. The franchising business can create problems for the Zetas, just as it creates problems sometimes for McDonald's. And one of the things that you find with

regular franchises is that sometimes franchisees will argue about the fact that there are supposedly too many franchises in a particular area. Right. Encroachment is what they call that. Yeah, that's exactly right. And you find loads of court cases about this in the States and in Europe, you find franchisees claiming that there's been encroachment, whether it's in McDonald's or in a, you know, a hotel chain or whatever. And the problem that lies at the root of this is that the interests of the franchisees and the interests of the main firm aren't very well aligned. Obviously, from the point view of the franchisee, it's great if they've got the only McDonald's franchise in one big city. From the point of view of the firm, equally obviously, it's good to have as many as possible

because they take a cut of total revenues. They don't particularly care if each individual franchisee is less profitable. And the same thing happens in the world of cartels. You find that individual franchisees, say, of the Zetas, often find that another Zeta franchise has opened up somewhere nearby. And rather than pursuing this problem through the courts, which obviously they can't do because this is an illegal business, they settle their differences using violence, which in the world of drugs is the only way to enforce contracts. And in many parts of Mexico, you find that some of the violence can be attributed to exactly that. It effectively encroachment battles between different franchisees of the same cartel, which have found themselves situated

a bit too close for comfort, and they're fighting over the limited amount of profits available in a particular area. In places like Acapulco, for example, there's some evidence that some of the violence is caused by effectively different franchisees of the Sinaloa Federation. And so that it's something for these cartels to bear in mind as they do their franchising. It's a very, very quick way for them to expand, but they may find that their franchisees actually argue amongst themselves more than they might bargain for. There's a lot in this book. The idea that some cartels rely on territory, others rely on products and smuggling.

It reminded me of internet business versus, let's say, brick and mortar. You end up with different cartel territories and things like that. and even online sales, which I wasn't sure was a real thing, but it seems like now, well, Silk Road and websites like that no longer exist, but of course have been replaced by something else, I assume. Now you're looking at an entirely different way, an entirely different market, and sort of pathway trade route for drugs. So does this mean you can buy cocaine online?

Obviously, I'm asking for a friend. Yeah, you can. You can buy cocaine. You can buy more or less what you like online. And it is amazing. If you go to these websites, like as you say, Silk Road, itself no longer exists, but it's been replaced by a lot of other ones. You go on there and you can see these products to sale different varieties of cocaine, of heroin, crystal meth, you name it. You can

find it on the dark web. And alongside these products, you find reviews of the products by consumers. And a lot of these sites have been set up to look like eBay. You know, you find a kind of feedback from people who have ordered from the supplier and they can give a kind of thumbs up or thumbs down. It's extraordinary. It makes the business of buying drugs feel a lot more like business of buying regular products. And I think for consumers, you know, it gives them certainly a lot more information about the product that they're buying. And it also gives them more information about prices, because one of the key differences between drug markets and other regular markets is that in drug markets, you don't have very much transparency about pricing. So let's say you're buying a

regular product, you know, a computer or something like that. If someone is trying to tell you it for more than the regular price, it's pretty easy to find out that someone else nearby is selling it for less or, you know, will sell you a much better computer for the same price. In the drugs world, it's very, very hard to do that. Consumers might know their regular guy who sells them cocaine for a certain price. They won't have any way of knowing if there's some other guy across the city who sells it much cheaper, or at least it's much harder for them to find out. And similarly, dealers don't have any very easy way of advertising their stuff. You know, they've got a network of people to whom they sell their drugs. But if there's someone else who lives nearby who would be willing to pay more, they won't necessarily know that.

They can't advertise, obviously. And yet online, they can do it. all of this stuff, they can advertise their prices pretty openly. Consumers can decide between products based on their price, between products based on their reviews and the quality and so on. And so it starts to resemble much more a regular market. It's not a kind of hidden market anymore. It's a regular competitive, free market. And so what you would expect to find, and I think what we're probably seeing already, is that online, the kind of drugs that you will find are probably of higher quality, that's to say, greater purity, and probably of lower price. And crucially, they tend to to offer better what you might call customer service. And it's very, very surprising. You see these guys,

drug dealers on the web offering things like, if your shipment goes missing, we'll give you a 50% refund, or if you're a loyal customer, will give you a discount on your next offer. And they have kind of happy hour, and they have special promotions, and all of the things that you'd associate with regular businesses. And so the online world of drugs, I think really has the potential to change the industry quite a lot. It has the potential to, you know, drive up the purity of drugs, drive down prices, improve customer service, and, you know, make it altogether a better experience for consumers. And in some ways, that's good. But obviously, the worry is that it could make drugs much more appealing. And you could ultimately see an increase in drug consumption. Yeah, I'm just,

I'm imagining, you know, fair trade, cocaine and all inventory must go, flash sale, right, online. And there's lower barrier to entry if you're going to sell online. There's lower risk. You don't have a need for an elite network of contacts as well, because they're coming through the website. And yeah, the level of trust is handled by feedback in the market, just like Yelp. Cartels are moving not just cocaine and things like marijuana, but avocados, of course, there's human trafficking, oil, petroleum, even cheese. So have you done the math? I mean, what are the odds that we've eaten or used something handled or managed by drug cartels that isn't drugs? Oh, that's a good question. I'm afraid I don't have an exact answer for you,

but I mean, it depends on where you live. So you mentioned the cheese business. This was something that happened in Central America where there was at one point the feared Cartel de los Chesos, which was the cheese cartel. And that existed to overcome a ban on imports of cheese from one Central American country to another. So if you lived in, I forget, I think maybe it was El Salvador. If you bought some good cheese there, there was a pretty good chance that had been smuggled in from, I think it was Honduras. Anyway, with respect to regular products, I think it really, it depends what your definition is. If you're talking about, let's say, I don't know, avocados that have been directly smuggled by the cindulul.

cartel. The risk is probably fairly low, but I think where it's pretty likely that you may have indirectly contributed to cartel's finances is through the fact that in areas like, say, Mitch Rakan in Mexico, where a lot of avocados that you eat in the States may come from, a lot of the businesses there pay extortion money to organize crime, and that increases their costs, and as their costs go up, they have to raise their prices, and as they raise their prices, the retailers in the States have to raise their prices to consumers. So, in so far, far as it's the case that many, many farmers in Mitch Rakan will pay extortion money to the Sinaloa cartel. And insofar as it's the case that those farmers ultimately will pass on some of

those extra costs to consumers in the United States, it's highly likely that some of the money you pay for your avocado in, say, California will find its way back indirectly into the hands of the Sinolaa cartel. I'm afraid it's something you can never get away from entirely. I mean, of course, in the drugs business, you can be pretty sure that every cent of the money that you pay for your cocaine is going by definition into the criminal economy, and a lot of that is making its way back to Mexico to fund the kind of horrible violence that we were talking about earlier. But even in something like the avocado business, you can't rule out the idea that, you know, a few cents in the dollar that you pay for your avocado may end up in the hands of someone rather unsavory.

Jeez, you might as well put cocaine in your guacamole at this rate. I wouldn't go that far, but yeah, yeah, it's pretty prevalent in Mexico. Yeah, you can say that for sure. Yeah. Oh, wow. Well, the moral, don't do drugs, but if you do,

just make sure that it's fair trade. This has been absolutely fascinating. Thank you so much, Tom. Narconomics will be linked, of course, in the show notes as well. It's a great read, and it goes by quick, and there's just so many interesting parallels

here between the cartels and, quote-unquote, regular business here in the good old USA and the rest of the world. So thank you so much for your time. This has been super interesting. Thank you to Tom Wainwright, one from the vault, that book is called Narconomics. Links to that stuff is always in the website

in the show notes. Please use our website links if you buy the book. It does help support the show. Worksheets for the episode in the show notes, transcripts for the episode in the show notes. I'm at Jordan Harbinger on both Twitter and Instagram or just hit me on LinkedIn. I'm teaching you how to connect with great people and manage relationships using systems and tiny habits over at our six-minute networking course, which is free over at Jordan Harbinger.com slash course. Dig that well. before you get thirsty, most of the guests on the show actually subscribe to the course. So come join us. You'll be in smart company where you belong. This show is created in association with Podcast One and, of course, my amazing team,

including Jen Harbinger, J. Sanderson, Robert Fogarty, Ian Baird, Millio Campbell, and Gabriel Mizrahi. Remember, we rise by lifting others. The fee for this show is that you share it with friends when you find something useful or interesting. If you know somebody who's interested in business and maybe in drug cartels, well, share this episode with him. Hopefully you find something great in every episode of this show. So please do share the show with those you care about. In the meantime, do your best to apply what you hear on the show so you can live what you listen, and we'll see you next time. As promised, here's a preview trailer of my interview here with Jason Calacanis. I built Weblogs, Inc. And 18 months after we were growing it, we were at about

150K in total revenue. And AOL came and offered us 30 million bucks for it. I was negative 10,000 in my bank account. And I was walking my old dog, Tora, rest in peace, and smoking a cigar with my wife. And we were sitting there in Santa Monica. We had a $2,000 a month apartment. And I said,

they've offered us $30 million. I can't keep up with our credit card bills. I'm going to take it. And she's like, this is going to be crazy. Like, we're going to have over $10 million in our bank account. I was like, yep. I sat there and I just had to have this like really long look on,

like deep moment because I, because I had a very complicated relationship with money and being poor because you grew up. Yeah, they were wanting to be rich. Exactly. And I wanted to be powerful and rich when I was a kid. And looking back on it, the reason I wanted to be powerful and rich was because I was poor and I had no power. My wife remembers a story, and I remember a story like it was yesterday. I was sitting there refreshing my Bank of America account, the corporate account, and nothing, nothing, nothing.

And then, boom, 27 million bucks. And I start crying. And my wife was, well, he cries it. I spent the majority of my life broke. I don't have to worry about money ever again. Ever. For more with Jason Calicanus, including what venture capitalists are looking for in startup founders and how to make yourself more marketable, whether you're a founder or an angel investor yourself,

check out episode 100 right here on the Jordan Harbinger Show. This episode is sponsored in part by Something You Should Know podcast. Finding a new great podcast shouldn't be this hard, so let me save you some time. If you like the Jordan Harbinger show, you'll probably like something you should know with Mike Carruthers. It's one of those shows that makes you smarter in a practical, useful way. Same curiosity vibe we go for here, just in a fast-focused format. Mike brings on top experts and asks the exact questions that you'd want to ask, and the topics are all over the place in the best way. Recently, they've covered things like why we care so much what other

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