'Narconomics': How The Drug Cartels Operate Like Wal-Mart And McDonald's

When Tom Wainwright became the Mexico correspondent for The Economist in 2010, he found himself covering the country's biggest businesses, including the tequila trade, the oil industry and the commerce of illegal drugs.

"I found that one week I'd be writing about the car business and the next week I'd be writing about the drugs business," Wainwright tells Fresh Air's Terry Gross. "I gradually came to see that the two actually were perhaps more similar than people normally recognize."

During the three years he spent in Mexico and Central and South America, Wainwright discovered that the cartels that control the region's drug trade use business models that are surprisingly similar to those of big-box stores and franchises. For instance, they have exclusive relationships with their "suppliers" (the farmers who grow the coca plants) that allow the cartels to keep the price of cocaine stable even when crop production is disrupted.

"The theory is that the cartels in the area have what economists call a 'monopsony,' [which is] like a monopoly on buying in the area," Wainwright says. "This rang a bell with me because it's something that people very often say about Wal-Mart."

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