Prohibition, refugees and violence in Mexico

By Dave Anderson:

Via War is Boring:

the latest Mexico report
from the Pew Global Attitudes Project. The report is full of
interesting statistics, including that a full third of Mexicans would
move to the U.S. given the means, and that half again of those would do
so illegally. That means Americans could expect roughly 18 million more
potential illegal immigrants from Mexico alone, and keep in mind that
Mexico has fared relatively well during the economic crisis.

18,000,000 potential immigrants or refugees who consider themselves more desperate and less attached than the other 18,000,000 potential immigrants who still have a stake in the Mexican government and society.

Right now, as I have repeatedly hammered, the Mexican state is facing a significant funding problem that will get worse.  Oil production and exports are down and look to continue to decrease.  Light manufacturing exports to the United States got knee-capped by the US recession, so Mexico is on pace to lose at least 7% of its GDP this year, and remittances from Mexican citizens who are working in the United States have dropped dramatically as there is far less work to do in the US.  At the same time, the Mexican government is facing a Hydra headed narco-insurgencies of smugglers and drug producers that is increasingly costly and ineffective.

18,000,000 refugees is something that most Americans and both political parties do not want to deal with.  The probability of a mass refugee flow of permanent immigrants increases as the capacity and legitimacy of the Mexican state decreases.  People will move to locations where there are resources, opportunities and a chance; they will often stay put when their homes, where they have accumulated massive social and economic capital when there are resources, opportunities and hopes. 

A Mexican state that is becoming more corrupt and whose cash flow is diminishing despite escalating commitments to fight against smugglers who have plenty of liquidity is one that increases the probability of large scale refugee flows.  Cutting the smugglers and cartels' liquidity would be a significant boost to the long term prospects of the Mexican government and state. 

Cutting the largest source of smuggling profits which is marijuana smuggling would also have minimal long term social costs in the United States.  Consumption would increase but cannabis is not a particularly nasty drug to have a long term habit.  Throw in a de-escalation of the war on drugs, as well as diversion of police resources to cracking down on harder drugs (coke, meth, opium) as well as violent market-places, and it comes out to be a near wash while providing some significant insurance against a fat-tail result of a mass refugee flow.