Drug War Profiteers

This chapter is motivated by the following questions: Why do American policymakers continue to increase funding for a drug war that has failed to realize its objectives, and why do they consistently give greater priority to reducing the supply of illicit narcotics from foreign countries than reducing demand in the United States? In answering these questions, the chapter draws on theories of the state to highlight the role that corporate capital play in shaping the federal government’s budgetary allocations for drug enforcement. Congressional deliberations of Plan Colombia and the Mérida Initiative with Mexico serve as case studies to test pluralist, radical and elite theories of U.S. drug enforcement policy making. Radical and elite theories consistently explained the ways in which corporate power shaped the drug supply reduction strategies of Plan Colombia and the Mérida Initiative. Both theories also explain how these strategies justifies the provision of large government contracts to corporate members of the regime, how drug enforcement foreign aid is used to provide security for American oil companies that operate in Latin America, and how that aid is also used to market the defense industry’s military hardware to countries in the region to prosecute the drug war.

Embedded Corporatism

This chapter introduces the theory of embedded corporatism to explain U.S. drug enforcement. It argues that drug enforcement is an international regime where the interests and power of American corporations are embedded in drug prohibition. The regime also includes corporate-funded think tanks, some members of Congress, civil society groups, and foreign governments. The power of American corporations within the regime facilitates domestic and international consensus around drug prohibition as a mechanism for corporate expansion and capital accumulation. The chapter demonstrates that democracies in Latin America have a higher level of human rights repression than countries in the developing world that are not democracies. Although GDP per-capita in the region is higher than other developing regions, income inequality in Latin America is significantly higher than the rest of the developing world. And while the United States is the supposed leader of the free world and the richest, its rates of incarceration are greater than those found in autocracies, and its level of income inequality is significantly higher than other rich OECD countries. It is argued that the paradox of human rights and democratization in the Americas along with widening class cleavages are the by-products of the embedded corporatist drug enforcement regime.

Drug War Capitalism and Class Conflict in the Americas

This chapter argues that the drug war is a manifestation of class conflict in Latin America and the United States. The chapter is motivated by the following questions: Under what conditions is the drug war used to repress labor unions and, in the process, increase income inequality in Latin America? What political mechanisms in the United States create linkages among drug enforcement, income inequality, poverty, mass incarceration, and corporate capital accumulation? In answering these questions, the chapter discusses the relationships among U.S. counternarcotic aid, the repression of workers’ rights, and income inequality in Latin America and the relationship between drug enforcement and income inequality in the United States. The chapter estimates data for twenty-one countries from Latin America, covering 2003 to 2012 using a time-series cross section (TSCS) statistical model and estimates data for the United States, covering 2000 to 2012 using TSCS and structural equation modeling. The statistical results show that increasing levels of counternarcotic aid to Latin American governments increases income inequality when the rights of workers are increasingly repressed. And increasing levels of drug enforcement in the United States is associated with increasing levels of income inequality, poverty, mass incarceration and corporate revenues generated from prison labor.

Beyond Colombia and Mérida

Plan Colombia and the Mérida Initiative case studies showed that corporate congressional lobbies not only shaped the militarization of foreign drug enforcement but also drove the federal government’s drug war expenditures. However, how generalizable are these finding beyond Colombia and Mexico? This chapter answers this question by first discussing theories of congressional lobbying and provides an institutional analysis of the relative power of corporations and civil society organizations in shaping U.S. drug enforcement policy. The hypotheses that emerge from these discussions are empirically tested using the Heckman selection estimator that analyze cross-national data of thirty-three corporations who were active in lobbying for drug enforcement in Colombia and Mexico, and eighty countries that were recipients of U.S. counternarcotic aid during the period 2003–12. The finding showed that increases in corporate congressional lobbying expenditures are associated with increases in counternarcotic aid flows to the eighty recipient countries in the data set and that the outcome observed in the Columbia and Mexico case studies are indeed generalizable.

Corporate Hit Men

To test the theoretical components of the argument presented in chapter 5, this chapter develops an empirical model of how U.S. transnational corporations and paramilitary death squads mediate the U.S.-sponsored drug war’s effect on human rights repression in Latin America. In outlining this empirical model, this chapter is organized as follows: It first juxtapose the theoretical arguments of dependency and neoclassical liberal theories regarding the human rights effects of transnational capital by highlighting the theoretical and empirical limitations of neoclassical liberal claims. This is followed by a discussion of the empirical model, which draws on the extant human rights literature to identify important control variables that are important predictors of state repression. It then discusses important theoretical modifications that are incorporated into the overall empirical model. This is followed by a discussion of the limitations of the indicators used to measure the model’s mediating variables. structural equation modeling is used to analyze cross-national data for thirty-one countries from the Latin American region covering the period 1980 to 2012. All the components of the theoretical argument found strong statistical support.

Drug War Policy Reforms and the Endurance of the Embedded Corporatist Regime

This chapter examines why it is difficult to dismantle the drug enforcement regime even when it fails to realize its raison d’être. The chapter acknowledges that, while the Obama administration’s “safe harbor” policy has changed federal domestic marijuana policy by choosing not to prosecute marijuana offenses in states that have legalized marijuana, the administration’s continuation of overseas enforcement policies has facilitated the endurance of the drug enforcement regime. The continuity of the drug enforcement policies of the Obama and Trump administrations is discussed in the context of critiquing the ways in which the forty-eight-year-old drug war has failed to slow the flow of illicit drugs into the United States. It is argued that the endurance of the regime is partly due to the competing nature of drug policy reforms promoted by various U.S. civil society organizations and a number of Latin American governments, which undermine the ability to galvanize domestic and international support around a cohesive policy alternative to the prohibition and corporatist norms of the existing regime. The chapter concludes by examining existing drug policy reforms, such as decriminalization and legalization, and shows their limits in addressing the pathological effects of the corporatist drug enforcement regime.

Democracy without Rights

This chapter is motivated by the following question: What explains the determinants of illiberal democracies in Latin America and the prevalence of regime transitions from liberal to illiberal governance? The chapter argues that counternarcotic aid is the financial and diplomatic mechanism through which the corporatist drug enforcement regime has replicated essential features of the U.S. national security state in aid-recipient countries in Latin America for the purpose of fighting the drug war. The replication of the national security state and thereby the creation of a drug war national security state undermines the process of democratization and, in the process, produces illiberal regimes in the region. The drug-war-induced national security state explains not only the emergence of illiberal democracy in the region but also regressive regime transitions from liberal to illiberal governance. Probabilistic econometric models are used to analyze data for 19 Latin American countries covering the period 1978 to 2011. The findings show that U.S. counternarcotic aid increases, by 56 percent, the probability that a recipient government will be an illiberal democracy. And the risk of a liberal democratic government receiving aid and reverting to illiberal democracy increases by 44 percent.

The Privatization of Terror

Building on the arguments presented in the previous chapters, this chapter is motivated by the following question: How does the drug enforcement regime’s addiction to increasing counternarcotic aid facilitate the expansion of American and other transnational corporate investments in Latin America and, in the process, create the conditions that give rise to corporate-induced repression? In answering this question, the chapter develops a theoretical framework that draws insights from the literature on foreign aid and its effect on foreign capital flows and then integrates these insights into theories of repression in dependent capitalist societies. It is argued that, in addition to combating drug trafficking, U.S. counternarcotic aid facilitates the expansion of American and other transnational corporate investments in Latin America by financing countries’ infrastructure development. In conjunction with neoliberal economic reforms, drug war infrastructure financing in Latin America is likely to facilitate the expansion of corporate investments by resource-seeking industries that require greater land use, which encroaches on the ancestral territories of Indigenous peoples. And, in response to Indigenous resistance to corporate appropriation of ancestral lands, resource-seeking transnational corporations will collude with local security forces, private security firms, and paramilitary death squads to repress and eliminate resistance to capital accumulation.

The Corporate Elite and the Drug Enforcement Regime

The legislative deliberations of Plan Colombia and the Mérida Initiative also supported elite theories of the state and showed that corporate campaign contributions and the reciprocal relationships between corporate elites and the federal government also influence American counternarcotic aid flows. This chapter uses the Heckman selection estimator to ascertain whether these outcomes are also generalizable. First, it uses principal component factor analysis to create an index to operationalize C. Wright Mills’ concept of an interlocking directorate, which measures the interconnections among corporate board of directors for the corporations in the data set and their interconnections with policy think tanks and the U.S. government. The statistical findings provide evidence that corporate campaign contributions, corporate inter-locks with think tanks and the federal government, and an interlocking directorate systematically increased U.S. counternarcotic aid to eighty recipient countries. And since drug enforcement policy making toward Colombia and Mexico also demonstrated that congressional funding for the drug war is a source of corporate revenues, the chapter concludes by utilizes a time-series cross section statistical analysis that shows that increasing levels of counternarcotic aid flows increases corporate capital accumulation again confirming that the case study findings are generalizable.