Tag: cartels

A Look at the OAS Report on Drug Policy in the Americas

Last Friday, the Organization of American States released a groundbreaking report on the future of drug policy in the Americas. The OAS received the mandate to produce this document at the Summit of the Americas last year in Cartagena, Colombia, where some presidents aired their frustration with the war on drugs and even suggested legalization as an alternative to fight the cartels.  

The document is based on solid premises:

  1. Drug violence is one of the greatest challenges facing the Americas
  2. The current approach is a failure isn’t working
  3. New policy alternatives need to be discussed and implemented
  4. Drug use will remain significant by 2025

These premises might seem pretty obvious, but when it comes to drug policy, stating the obvious hasn’t been the norm for those who believe in the status quo: for example, in 1988 the UN held an event titled “A drug-free world: we can do it” (consumption of marijuana and cocaine has increased by 50 percent since then). Or the latest National Drug Control Strategy, which claims that the greatest accomplishment of the Mérida Initiative with Mexico has been “the mutual fostering of security, protection and prosperity” (never mind the 60,000 people killed in drug violence in six years in Mexico).

The OAS report avoids recounting this fairy tale. It also avoids making recommendations, given the lack of consensus among its authors about where drug policy should be headed in the next 12 years. Instead, the document lays out four different interpretations of the “drug problem” and presents the scenarios of what the response should be. The report also presents the challenges facing each scenario (name in bold):

Together: Under this scenario, the problem is not drug laws but weak institutions. It foresees greater security and intelligence cooperation among nations, more expenditure in the security and judiciary apparatuses and tougher laws dealing with corruption, gun trafficking and money laundering.

Latin American countries indeed suffer from weak institutions. The shortcoming of this scenario is that prohibition actually exacerbates the problem since it inflates the profit margins of the cartels to stratospheric levels, thus increasing their corrupting and violent power. In 2010 all seven Central American countries combined spent nearly $4 billion in their security and judiciary apparatuses (a 60 percent increase in five years). And yet that fell terribly short of the estimated revenues of the Mexican and Colombian cartels which, according to a report from the Justice Department, could reach up to $39 billion a year.

The report foresees another challenge with this approach: a disparity among countries in their institution-building efforts, which would lead to the balloon effect of criminal activities. This is perhaps the main feature of the drug business in the Americas: its high capacity to adapt to changing circumstances. For example, in the early 1990s, as pressure grew on coca growers in Peru they moved to Colombia. Now, after a decade of eradication programs in that nation, they are moving back to Peru. Overall the Andean region continues to produce the same amount of cocaine as it did 20 years ago.

Over the years the common denominator of the war on drugs in Latin America has been the attempt to export the problem to your neighbor. Greater cooperation, harmonization of efforts, and same-pace institution building seems unrealistic.

Biometrics—-and the Curious Relevance of Occupational Licensing

Yesterday, I testified (by remote communications) in the Alaska House of Representatives’ Health and Social Services Committee, which is considering a bill to heavily regulate the collection and use of biometrics. The bill is inspired by a man who was denied entry into the CPA exam when he refused to have his fingerprints scanned for that purpose. You can read more about his campaign at the PrivacyNOWalaska.org site.

I’m entirely sympathetic to his concerns about potential overcollection of biometrics in digital form, and what may happen to biometric data after it is collected. As I said in my testimony, “a digital record of a biometric can be stored indefinitely, copied an infinite number of times, and transmitted around the globe at the speed of light. This creates security and privacy concerns cutting against the use of machine-biometrics.” On the other hand, the CPA exam apparently has a problem with imposter fraud and faux test-takers who go simply to memorize questions and sell them on a test-prep black market.

Unfortunately, the bill is not callibrated to balance the competing interests at stake. It would create a “notice and consent” regime for biometrics collection, an idea that has failed to produce privacy protection in other areas. It would require massive and expensive re-tooling of data systems to provide consumers a right to amend or revoke their permission to use biometrics or order destruction of biometric data. And it would flatly outlaw marketing that uses biometric information—not just the stuff we learned to be spooked about in the film Minority Report, but knowingly agreed-to tailoring of discounts at the grocery store if we used a biometrically-secured payment system, for example.

I urged the Alaska legislators to ensure that biometrics collectors account for and prevent potential harm to Alaskans when they design and use their systems, but not to constrain biometrics so much that their security benefits never materialize.

There are a number of things Alaska and other states could do to help society callibrate the use of biometrics. They could ensure that biometrics collectors are liable and subject to jurisdiction in the state of collection when contract violations and harms arise from the use or misuse of biometric data.

Alaska could also establish that there is no “third-party doctrine” under its state constitution. A person sharing data under contractual or regulatory protections should maintain his or her search-and-seizure rights in that data. The government should not be able to access such data—though shared—without proper suspicion, warrants, and subpoenas.

Alaska has rejected the REAL ID Act, and it could do more to prevent the emergence of national identity systems by rejecting any E-Verify mandate. I encouraged the Alaskans to follow the lead of New Hampshire and bar state identity data from being shared with any national ID system.

The root of the problem in Alaska, though, may be the accountancy cartel. This is an area I know precious little about, but it appears that you must take the CPA exam to act as an accountant in the state. This positions the administrators of the CPA exam to make unreasonable, privacy-invasive demands for biometric data on a take-it-or-leave-it basis.

Oh what a tangled web we weave, when first we practise to … restrict the right to earn a living!

My testimony starts with a primer on biometrics. We have much to learn yet about biometric technologies, their uses, and their consequences. Banning them would deny the public many benefits. Using them promiscuously would have many costs.

New Study on Mexico’s Drug Cartels and the Global War on Drugs

Yesterday, Juan Carlos Hidalgo pointed out that Colombian president Juan Manuel Santos became the latest world leader to recognize the need to rethink the prohibitionist policies that allow powerful drug traffickers to flourish. Santos called for a new approach to “take away the violent profit that comes with drug trafficking” and that governments around the world, including the United States, the United Kingdom, and the European Union, need to debate legalizing select drugs, such as cocaine.

From Colombia to Mexico, the drug war rages on. Despite two decades of U.S.-aided efforts to eradicate drug-related violence in Colombia, the problem persists. Indeed, the trickle-down effects from Mexico southward now threaten to engulf Guatemala. Costa Rica, Honduras, and El Salvador are all experiencing alarming homicide rates at least partially related to drug trafficking. To address these spikes in violence and stem the flow of drugs, the United States has spent billions of dollars in Mexico and throughout Latin America. Sadly, there is little evidence that this policy has been successful, and the evidence mounts that it has been an outright failure.

A new policy is needed to stem the violence and consequences of the Mexican drug cartels pervasive power. In a new study released today, Ted Galen Carpenter, senior fellow, argues that the only lasting, effective strategy for dealing with Mexico’s drug violence is to defund the Mexican drug cartels. “The United States could substantially defund these cartels,” says Carpenter, “through the full legalization (including manufacture and sale) of currently illegal drugs.”

The new study, “Undermining Mexico’s Dangerous Drug Cartels,” is available here.

Agony of Defeat

Oh, what a burn. My tax debate with French economist Thomas Piketty was a dead heat, 50-50, for the past four days. Then just as the contest was closing, he pulled ahead to seize victory, 51-49.

The Economist editor described the tightly fought battle:

Chris Edwards got over a strong initial disadvantage to narrow what was originally a strong lead for Mr Piketty to a dead heat, but eventually Mr Piketty has prevailed: but only just—even hours before closing, the vote was split exactly down the middle. One could not have asked for a closer contest: this has been the most closely-fought of our 21 online debates, although it began with a fairly substantial lead for the proposition.

Certainly, the debate revealed high levels of interest in taxation and relative income levels. There were more than 1,100 reader comments posted, making it the “most commented” story on the Economist site for the last 10 days or so. My thanks to all the supportive voters and commenters.

Piketty won the website voting battle, but I don’t think he’ll win the war. Global tax competition has led to large cuts in top tax rates in recent decades, and will continue to exert downward pressure for years to come. However, these are dangerous times as governments press to end financial privacy, to create international tax cartels, and to substitute competition with multinational government power in various other ways.