Crime and Punishment in a Future Mexico

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By 2040 Mexico can expect to see a decimated drug export industry but a flourishing domestic drug market, while the rise in electronic money and decline in cash will hit the kidnapping business, predicts Alejandro Hope.

[…] Today I am feeling ambitious and willing to make predictions for the year 2040 because, by that time, no one will remember or care about what I am saying.

So then, how does the distant future look? My perception is that it will be much improved in comparison to the present. First, as I mentioned last week, we can expect substantial declines in profit from the export of illegal drugs. In addition to the reasons provided in my article “The End of Mexican Drug Trafficking,” it is almost certain that, in the long run, increasing costs of labor and land will make the production and international trafficking of illegal drugs unviable.

A similar evolution can be expected for other forms of trafficking. The number of Mexicans migrating to the United States has dropped by two thirds since 2006. In part, this decline is the result of the economic crisis of 2008-2009 and its aftermath. Although a return to the higher migration numbers may be possible when the U.S. economy rebounds, in all likelihood, the decline reflects a secular trend: the experience of several European countries shows that there need not be a complete closing of the income gap between neighboring countries for migration to almost entirely stop. It may be enough to make certain gains in terms of the absolute level of income, and Mexico will probably cross that threshold at some point over the next 15 years. While some Mexicans will continue to migrate to the United States for jobs, they will do so on airplanes, using a passport and visa.

With a certain amount of lag time, the same dynamic will occur in Central America and other countries that send labor migrants to the United States. In other words, the coyotes that make their living smuggling migrants across the U.S.-Mexican border are likely to lose the majority of their clients over the next two decades.

Coyotes will not be the only offenders to see their markets disappear. For example, it is practically inevitable that some forms of piracy will vanish during the next decade: for example, the market for pirated CDs and DVDs will disappear quite soon. The reason is simple: the mass production of MP3 players and other digital audiovisual products, along with the increasing availability of cable stations, satellite networks and internet television means that no one will be watching movies on DVD within 10 or 15 years.

That’s the good news. There are also other, less favorable omens. In particular, it is highly likely that retail drug dealing in Mexico will grow considerably in the coming decades, for one simple reason: illegal drug use tends to increase in correlation to per capita income. A graph lifted from a presentation by Jonathan Caulkin illustrates the relationship whereby, as Mexico grows richer, there will be an increase in street drug dealing and problems associated with this phenomenon.

cannabis_graphOf course, retail drug sales are not the only form of crime that will survive and prosper. Many illegal acts will move to cyberspace. This includes not only multiple forms of piracy (music, movies, etc….), but also various types of fraud and identity theft. Cyberthiefs will likely attempt to appropriate a multiplicity of virtual assets, from online gaming “money” to “properties” in virtual worlds. All of this already happening, but as we conduct more of our lives online, we will see an increase the percentage of crimes where the weapon of choice is a keyboard (or tablet) and not a gun.

As for violent crimes, it is a safe bet that kidnapping will decrease dramatically. In developed countries, kidnapping for ransom is practically nonexistent because, where there is a minimal level of state capacity,·it is too risky·(there are kidnappings of children between divorced parents, but that’s another matter). You can be sure that the same will happen in Mexico.

One additional factor that will make kidnapping for ransom almost impossible is that cash, as a means of payment, will eventually disappear. Electronic payment methods are already displacing cash in countless transactions and that transition is going to accelerate in the coming decades. It is likely that, by 2040 if not much earlier, it will no longer make sense for central banks to issue banknotes and coins (except as souvenirs). To reclaim President Zedillo’s classic saying, nobody is going to carry cash. Without cash, there is no anonymity and, without anonynimity, there is no kidnapping.

The elimination of cash transactions will help reduce various forms of theft, both violent and nonviolent. What will a pickpocket steal when no one carries a wallet, when all our financial information is linked to our biometric data (that is to say, when we go shopping with our fingerprint or iris)? How many thiefs will rob a convenience store just for beers and chips, since there will be no cash? Probably very few. Bankrobbers? An endangered species. Those who want to steal will have to move to cyberspace.

[…]

On the future of extortion, I have even greater doubts. As the current crisis recedes, gradually so will the most crude and violent protection rackets, for the same reasons that we can expect a decrease in kidnapping: cash will soon be retro. However, extortion could become more insidious and systemic. For example, organized crime could take control of labor unions like it did for decades (and perhaps does even now) in the United States. It could also usurp power within local governments to ensure contract awards for infrastructure construction or delivery of public services, as the Camorra in Naples have done with waste management. I am not sure what probabilty to assign these scenarios, but it is clear that the risk is greater than zero.

In short, crime will become increasingly invisible and the distance between victim and victimizer will grow. As a result of these tendencies, homicides will decrease. An inevitable demographic transition will also result in lower homicide rates. According to projections from the National Population Council (CONAPO), the male population between 15 and 29 years of age (the demographic group most prone to violence) will reach its maximum size in absolute terms by the middle of this decade. From that point on, we will see sustainable, and perhaps irreversible, declines. If CONAPO estimates are correct, the number of males 18-29 in the year 2040 is likely to be 21 percent lower than in 2010. I would not be surprised at all if, within two or three decades, the homicide rate in Mexico approaches those of European countries, which is one or two per 100,000 inhabitants.

These indicators point to a much less violent future in Mexico. In the coming decades, crime will require more brains and less brawn. The same approach will be needed to address punishment, but I will address that in my next column.

Translated and reprinted with permission from Alejandro Hope*, of Plata o Plomo, a blog on the politics and economics of drugs and crime. Read Spanish original here.

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