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Mexican Violence and the Stock Markets
Plugging your ears won't make it go away

By Euan Wilson
Wed, 15 Jul 2009 18:30:00 ET
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More than 10,000 people have died violently in less than two years. A single city has seen over 1,000 murders in only seven months. Today the conflict is more deadly than Iraq and Afghanistan. And it is right on our doorstep.
 
The country is Mexico. The city is Ciudad Juarez, across the river from El Paso, TX. The war on drugs begets the violence. The death toll has piled steadily higher since Mexican President Felipe Calderon declared war on the cartels in December 2006. One could be fooled into thinking the cartel members misunderstood the declaration because most of the violence has involved them killing each other. However, the cartels are not in a circular firing squad: more than 1,000 police and other government officials have also died in the violence.
 
If the estimated net worth of some cartel leaders (some $1 billion in one notorious case) is accurate, then this carnage has accomplished little.


Too little. But there are options, socionomic options, for dealing with this crisis. This month's The Socionomist discusses the social forces behind the Drug War in eye opening detail. Find out more right here.

What makes this desperate situation worse is that it has no obvious answer. As chaotic and lawless as the drug cartels may seem, their actions are still steered by social mood. Decades of positive social mood produced the prohibition efforts that created the black market in the first place. As social mood falls (turns negative) the willingness of the cartels to use violence rises. Falling social mood also leads to a corresponding rise in society's willingness to accept compromises in law enforcement efforts.
 
Violence against enforcement authorities hit a new high on July thirteenth when twelve murdered police officers were found next to a highway near La Huacana, Mexico. This was the most police killed in a single incident since the war began. It was also the first time the cartels have deliberately killed a female police officer in the war.
 
This fresh violence comes after a relative reprieve in Mexican bloodshed. The Mexican Bolsa Index rally from its March low indicates rising social mood. After three months of growth, the latest data shows a month-long sideways pattern for Mexico’s Wall Street. Social mood south of the border is once again struggling.
 
It is no surprise this struggle has brought these murders, including evidence of torture.
 
How did we get here, and where are we going? This month’s lead article of The Socionomist details the cause and effects of the drug war. The report begins with a detailed look at what drives a society into prohibiting the drugs that give rise to illegal suppliers in the first place, with a particular emphasis on marijuana and how cycles of social mood dictate tolerance towards drug use.
 
The second section examines the Drug War itself, and considers the startling parallels with a previously fought and peacefully concluded Drug War. This earlier example had its own run of extreme violence, yet the murders and corruption ended within months of the war’s end.
 
It is easy to ignore the Drug War in Mexico because the violence has not yet spilled into the U.S. Could it come to that? Find out what The Socionomist has to say right now.

Tags: Mexico, Drug War, Marijuana, Violence, Conflict

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