Drug dealers, stationary bandits, and crack

Still from Cidade de Deus (Fernando Meirelles, 2002)

Here's a neat story on al-Jazeera: some drug dealers in Rio's favelas are starting to stop selling crack. Why? After all there is, as one dealer interviewed says, lots of profit to be had. The dealers themselves, and their surprisingly forthright attorney Flavia Pinheiro Flores, claim an interesting form of civic responsibility: crack is worse in its social effects than other drugs. The police claim this is a PR ploy, to get public authorities to lay off of sales of cocaine and marijuana, in a sort of live-and-let-live deal.

I don't know anything much about drug cartels or Rio, but I find these two interpretations interesting. I suspect that there's an element of truth in both. I wonder whether they are really speaking to the same thing: the logic of stationary bandits.

The great Mancur Olson argued (PDF) that bandits who stay in one place have incentives not to rob people blind. People will stop putting in efforts at making money, and so sources of theft will dry up. They also have good reason to provide public goods, like a degree of security and justice, for similar reasons. (I'd add that the focus is too much on a Laffer curve logic for my liking, and that there's an additional consideration for a bandit to keep in mind: the possibility of flight or defection, with civilians greatly preferring to live under some other sort of order.) In contrast, roving bandits have no such incentives. Olson then uses this "criminal metaphor" to understand the state: even if you think of the state as a predator on the income of the people, it still has some reasons for restraint and for providing something in return. Olson's far from the only scholar to compare the state to a criminal organization, but he spelled out an important part of the link by focusing on revenues.

Applied to the favelas, the logic might be something like this: while crack addicts are for obvious reasons a rather useful clientele, they come at a cost for drug cartels that influence many different facets of life in a district, and especially those who have revenue from multiple different sources. The victims of theft and physical violence have many more reasons to leave, so they're harder to tax. They might even prefer that another, anti-crack cartel take over the district.

So how do we assess the rival claims in light of this possibility? Like I said, Olson's hardly the first to discuss the criminal metaphor; that might be (I'm not sure, but it's a decent bet) Plato, who in Republic (I: 351c-e) used the analogy to suggest that because even a gang of pirates has to practice justice among themselves to be powerful, political society must likewise involve ethics. What is "actually" motivated by self-interest may therefore easily be understood as ethical behaviour. While it isn't a stretch to imagine that there actually can be some stronger ties of community than mere self-interest, it also doesn't do any harm to note how the two correspond.

As for the police, and the possibility of a PR move motivating a live-and-let-live arrangement: again, this can be understood in light of the gang's incentives not to make life absolutely horrible. If life gets bad enough--i.e. violent, chaotic, shot through with theft--more individuals would become inclined to cooperate with the police in a bid to oust cartels from favelas. Given that such efforts generally entail enormous violence and short-run suffering, especially when the cartels are quite powerful to begin with, it's reasonable to suppose that people's decisions about whether to support police action are actually affected by just how bad life is under a cartel.

All of this raises an interesting, really rather weird implication. The logic of the argument turns on the notion that the cartel loses revenue from chaos, much of the latter instigated by crack in ways that other drugs don't. The cartel's lots more likely to lose revenue from violence if its revenue streams are more diverse than just crack--if, for example, it's also involved in other, pricier drugs, or protection and extortion. I wonder if that means something really weird: the more activities a cartel runs, the less socially awful its rule is, generally.

But, to repeat, I don't really know much of anything about the Rio drug trade...