Why is a drug cartel called a cartel?

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A cartel, as I seemed to remember from my macroeconomics courses, is a group of enterprises and firms working together to limit competition and fix prices.

Why are drug cartels called cartels then, if they compete with each other and engage in gang wars?

In: Economics

Although the term is often used loosely, “drug cartel” is supposed to imply the same kind of monopolizing behavior: the cartel will use bargaining, threats or violence to seek exclusive control of the drug trade in an area. Gang wars are anti-competitive, intended to restrict the other group’s operations.

It’s like a monopoly or conglomeration of corporations, but there is no legal paperwork tying the “companies” together.

Instead it’s better described as a group of independent businesses opting to work together on pricing and territory instead of competing against each other. There’s no legal obligation to avoid betraying the arrangement, just an informal social convention for mutual gain.

Since there’s no legal framework tying the different “Companies” together, it’s not a proper corporation or organization that can be sued or pursued legally for damages.

When someone steps out and breaks the convention, social implications may follow, and competition between the independent companies will resume. This creates competitive turmoil (gang wars, territory fights) until one “Company” wins out or a new co-habitation/Cartel agreement can be arranged.

I think that you may be confusing a drug cartel “A made up thing” with a drug carousel. The topic is in-fact very interesting and I would love to share my vast knowledge with you. A drug carousel is the trafficking of drugs across the southern border of Arizona. Drug trafficking does not actually exit in any other part of the world “only in movies”. Once Donald Trump gets Mexico to pay for the wall then drug trafficking will drop to 0%. But as far as the origins of the name go, it is called a drug carousel because the drugs circulate in a carousel shaped pattern. I hope that my response helps.

Cartel:
> A combination of independent business organizations formed to regulate production, pricing, and marketing of goods by the members.

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