Story of Yesterday

El Universal had an interesting story yesterday about a meeting between members of organized crime and a handful of insurance execs:

On May 12 an unknown individual who introduced himself as a member of the Gulf Cartel met in Tampico, Tamaulipas with representatives of 11 insurance companies with offices in Monterrey. The motive was to present a new work plan that "benefits all of us".

The individual explained: "It's going to reduce your costs a great deal and your bosses should understand that we are doing it for the good of your company".

The scheme that he presented consisted in the businesses paying half a million pesos in exchange for "not being bothered". Every 30 days it would be up to a different insurer to make "the contribution".

"If someone says no, as a punishment I'm going to cause a daily loss during one year, and they are going to have to pay. One daily, from 5,000 to 10,000 [pesos], and I mean daily, until a year is up, and ultimately it'll cost 3 million", he warned.

Some of the most well known companies in Mexico, such as Bancomer, GNP, and Banorte, were at the meeting. No explicit word on whether or not they paid, but the article implies that they did not. This seems to be the rare example of a Mexican publication not named Proceso breaking a crime story on their own, which is to say, without the aid of a government press release.

Here was the same newspaper's editorial the same day:

In these regions where violence seems to be out of control, perfectly located areas, there are various activities that can't be carried out in freedom. It is increasingly difficult to function as a local politician, police officer, journalist, car salesman, contractor, even an insurance salesman. This is more than a simple "atmosphere" of insecurity, the fall of the state where the authority should be exercised by representation and not by the thug who has the most guns.

In these no man's lands not everything is chaos to the bone. There are organizations dedicated to controlling the masses so as to protect their private interests. There are the characters who grind down public life, the anti-heroes of the state, those who the officials tasked with defending us haven't been able to stop. The most dangerous in terms of social cost. Because it's not just the head of a cartel that threatens citizens' security, but also the mid-level commands and the "foot soldiers" of crime, whose principal activity is extortion, kidnapping, and killing. This ground floor of crime has wiped away the social fabric, the liberty of common people, but it's also crime's most vulnerable point.

The editorial goes on to compare these low-level, high-impact criminals to Achilles, and argue that the government's strategy should aim to balance the assaults on the Chapo's of the world with attempts to dismantle less notorious, less wealthy criminals whose activities more directly make life miserable for the average citizen. If that wasn't necessarily obvious in 2006, I'd say it certainly is now.

All of this is a good argument for two basic policy guidelines in Mexico: one, say what you need to about Calderón's missteps, an aggressive approach to crime is needed in any area where kidnapping and extortion are prevalent. (It's possible that a more lax approach to drug seizures would allow today's extortion artists and kidnappers to leave their present trades in favor of a suddenly more profitable, less stressful existence running drugs, but it seems more likely that they'll continue doing both.) Extortion and kidnapping are evils that also act as significant disincentives against entrepreneurialism and, consequently, economic success generally (why open a business if you think there's a good chance that as soon as it takes off, someone will demand that you start kicking protection money his way?), and are, as such, major impediments to a thriving society.

Second, this is another illustration of why Mexican policy-makers would do well to articulate and enforce a hierarchy for criminal activities. Demonstrating that a drug gang that extorts and kidnaps will draw a much more significant and determined share of law enforcement's attention than a drug gang that just deals with drugs would encourage criminals to abandon the sorts of activities that most impact the society at large.