MS-13 and Prohibition Economics: How the War on Drugs Finances Gangs
The Business of Blood: MS-13 and the Economics of Prohibition
Have you ever looked at a map of a major city and realized that the lines on the paper aren't the ones that actually matter? I’ve spent a lot of time thinking about how "power" really works in the streets versus how it’s described in textbooks.
While we talk about the "free market," there is an underground business model that is arguably more efficient—and far deadlier—than anything on Wall Street. I’m talking about MS-13, a transnational conglomerate that has turned violence into a high-yield investment.
A Mafia-Style Startup
We often think of gangs as just groups of kids causing trouble, but MS-13 operates like a shadow corporation. With over 100,000 members across six countries, they’ve scaled their "business" faster than most tech startups.
In Los Angeles alone, they control four square miles of territory. That doesn't sound like much until you realize every block is a revenue stream. They’ve adopted a dark version of the American Dream, moving away from simple street crime toward a mafia-style focus on profit.
The "Tax" on the Streets
If you want to do business in an MS-13 neighborhood, you’re going to pay. They enforce their own laws and demand a "protection fee" from anyone working on the streets. I’ve seen reports where they take up to 50% of a person’s profit just for the right to exist in their territory.
This isn't just about drugs; it's about control. They exploit local residents through fear and violence to ensure their cash flow never stops. For them, territory isn't a neighborhood—it’s an asset that must be defended with guns and intimidation.
Prohibition: The Gang's Best Friend
I want you to think about why this gang is so rich. It all comes back to a concept I’ve written about before: prohibition economics. Just like the gangsters of the 1920s got rich off bootleg alcohol, MS-13 is financed by the illicit trade of cocaine and heroin.
When the government makes a high-demand substance illegal, they don't stop the trade; they just hand the keys to the most violent people in society. By keeping these drugs in the shadows, we provide the economic motivation for gangs to smuggle guns, drugs, and even human beings. We are essentially subsidizing their expansion by creating a black market where they are the only "service providers."
The Brutal Cost of Entry
The price of joining this "business" is paid in blood. Their initiation, the "jump in," involves a brutal 13-second beating that serves as the first lesson in violence. To earn your stripes, you don't file a report; you shoot a rival.
They’ve been known to kill innocent civilians, including women and children, without any provocation. This is what happens when we allow an underground economy to thrive—it attracts those who view human life as a disposable resource in the pursuit of profit.
Breaking the Cycle
If we want to stop MS-13, we have to stop looking at this as a simple police problem. We have to address the economic incentives that make their business model work. As I argued in my book Farming Humans, the system often treats people as crops to be harvested, and MS-13 is just another harvester in a different uniform.
Until we take away the "gold" that makes their rules, the violence will continue to spread from L.A. to Alaska and beyond. We have to dismantle the prohibition that fuels their fire.
Do you think the legalization of certain substances would actually bankrupt these gangs, or have they become too diversified to fail?
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