Transnational organized crime exists as a networked system that creates a high degree of resiliency. Government systems laden by a pyramid-shaped bureaucracy and sovereignty have had little effect when attacking networks of organized crime in Latin America. This uneven playing field is easily observed at the strategic level, where non-state threats appear to run circles around slower-moving governments. The criminal system rapidly adapts, strengthens, and increases in violence, independent of whether different groups are fighting each other, government forces, or civilian vigilante groups. A warlord entrepreneur is inherently resilient, displacing from one territory to another and across international boundaries as market conditions or threats to organizational structures present themselves.
When looking at this system from the standpoint of any individual criminal or leadership group, however, one quickly sees that life is nasty, brutish, and short—a life in which most leaders find themselves in prison or dead within a few short years. The average life span for a budding warlord entrepreneur in Mexico or Central America shortens dramatically once he registers on the radar of the government or rival warlords. Organizations that seem strong at one point can quickly disintegrate once the military, police, and intelligence operations—or rival groups—target the top of their structure. Each individual organization is unlikely to have a long time horizon in which building sustainable services serves as a benefit. Any individual leader’s ability to function as a warlord entrepreneur, providing government-like services to a population after his organization has displaced the government, is therefore quite limited. And the fallout—normally violence as a new leader seeks purchase—is never a benefit for the host community.
Why is this the case? A close review of criminal structures at the operational level reveals that many organizations are structured very much as governments are, albeit with different rules. They have a vertical bureaucratic structure, often with one strongman at the top supported by a tightly knit group of trusted operators, specific lines of command, and harsh penalties for stepping out of line.
While criminality—and the visibility and strength of the criminal system overall—has increased in Mexico in recent years, individual groups have actually proven to be relatively unstable and weak due to their structures. Evolving through the phases of growth and decline, most criminal organizations have found themselves in a cycle of violence that ultimately leads to failure.
As a result, the life cycle of many criminal organizations follows a similar, four-phased pattern:
• Start-up: Market entry and early-stage competition
• Competition: Intense fighting with rivals to establish market dominance
• Dominance: Consolidation of dominance and expansion into neighboring markets or product segments
• Transition: Succession challenges brought about (usually) by the death or capture of key leadership
Each phase overlaps the previous phase, and any given organization may find itself shifting from one phase to the next. There are no clean breaks.
The first phase is Start-up, during which an organization seeks to establish a foothold for itself in the black market by clearing and holding an existing market niche or by creating a new one (for example, bringing existing drugs to a new market or new drugs to an existing one). For each of Mexico’s top-tier organizations—the Arellano-Félix, the Carrillo Fuentes, the Sinaloa Federation, the Gulf Cartel, La Familia Michoacana, and Los Zetas—this phase is already complete.
The second phase is Competition, during which a group must compete against its rivals in this space to establish market dominance. As in business, this phase appears to be endless for some groups, such as Los Zetas, who are continually at war with rival factions in an ever-shifting balance of power and influence. Some geographic areas of Mexico have calmed down when a criminal organization completes this phase and achieves dominance, such as Sinaloa and Sonora, where the Sinaloa Federation holds sway, while other areas are prone to flare up as smaller organizations form to fight the stronger criminal force.
The third phase, Dominance, largely involves market expansion, diversification, and brand protection. The organization focuses on expansion into neighboring areas (thereby beginning the cycle again at phase 1) or adjacent product segments. The third phase is also marked by efforts to clean out smaller groups that unofficially use an established group’s criminal brand to further its own endeavor, such as Los Zetas, which are still struggling to establish themselves as an organization strong enough to exist at the highest order of criminal nobility, yet nimble enough to enforce its rule of law in every corner where it purports to operate.
In the final phase, Transition, the organization must deal with succession, normally caused by the death or arrest of a leader. This is often the most turbulent and violent phase of a criminal organization’s life cycle. It also the phase in which criminal organizations operating under a vertical, government-like structure are most prone to fail. Groups often cannot sustain the scale to which they have grown at this phase, and they crumble under the loss of their leadership, fragmenting into smaller, competing organizations. We can see, for example, how the Arellano-Félix, Carrillo Fuentes, and Beltran Leyva (BLO) criminal syndicates have all dealt with the successive loss of their leaders (with varying degrees of stability)—with the BLO in 2008, 2009, and 2010 providing the best example of how a criminal organization passing through this phase often spins off smaller groups, which, in turn, begin their own cycles of violence.
Another example is the methamphetamine-producing subsidiary of the Sinaloa Federation, run by the late Ignacio “Nacho” Coronel Villarreal, which atomized after his death in July 2010. There are now several groups fighting for control of Guadalajara, when, less than a year ago, one organization controlled the territory. The Gulf Cartel also weathered this phase with a hostile spin-off—Los Zetas—that, as an independent group, began its own cycle of violence as it established itself as an independent organization in Mexico’s criminal landscape and beyond.
The ultimate disintegration and weakness of individual criminal groups leads to several questions:
• How do governments exploit these weaknesses in individual terrorist and criminal groups to hasten their decline or disintegration?
• Can fear of a brief and awful life convince enough prospective warlord entrepreneurs to avoid the criminal routes.
• Do government operations to destroy individual groups actually make the problem worse by allowing the system to adapt more quickly?
• Do governments speed up the evolutionary adaptation process of the criminal system by undermining the individual groups within it?
It is that last question that is tangentially raised by critics of the Calderón administration’s policy in Mexico. By going after the cartels with military force, Calderón appears to have accelerated the speed at which the criminal organizations go through stages of growth and decline, thereby creating more resilient organizations and increasing violence in their communities.
This strategy suggests that while going after the criminal leadership is necessary to defeat warlord entrepreneurs, it may also lead to more violence if it is not combined with stronger police and judicial institutions. Herein lies a paradox—conflict is necessary to defeat warlord entrepreneurs, but their very defeat catalyzes more violence and the rise of new warlords. In addition, states such as Mexico, Guatemala, Honduras, Colombia, and Brazil suffer from pockets of economic malaise, which (combined with ineffective sovereignty) provides a social perch upon which warlord entrepreneurs find purchase to establish a new presence in the black market. In effect, the very existence of such a vast and undulating criminal network is a symptom of deeper issues that observers have long identified as social—not security—problems. Yet the readily presented solutions attack the symptom, not the disease.
Unfortunately, Latin America relies on a strategy for public security that depends heavily on the military. This does not bring enough institution-building capacity to counter the criminal organizations in the one area of state building where they should be weak. As long as institutional reforms lag, every “win” for security forces creates a more atomized and violent set of drug-trafficking organizations. This is the pattern that explains why 2010 was so violent, in spite of numerous successes by security forces in Mexico, Guatemala, Honduras, and El Salvador. Moving forward, as this pattern repeats itself, leaders in Latin America may find themselves at the precipice of a new phase of the evolution of the criminal system, where successful warlords, such as Joaquín “El Chapo” Guzmán, the former leader of the Sinaloa Federation, seek to find sustainable power beyond the criminal realm—in the political world—where the transition from criminal king to political kingmaker is relatively swift to complete and nearly impossible to reverse.