Prison gangs, in Latin America and in the U.S.

 It's one thing to be able to capture and confine prisoners. When gangs are involved, it's quite another thing to control the prisons, or the ability of prisoners to continue to control gang activity outside of prison.

The NYT has the story, from Latin America:

In Latin America, Guards Don’t Control Prisons, Gangs Do. Intended to fight crime, Latin American prisons have instead become safe havens and recruitment centers for gangs, fueling a surge in violence. By Maria Abi-Habib, Annie Correal and Jack Nicas

"Inside prisons across Latin America, criminal groups exercise unchallenged authority over prisoners, extracting money from them to buy protection or basic necessities, like food.

"The prisons also act as a safe haven of sorts for incarcerated criminal leaders to remotely run their criminal enterprises on the outside, ordering killings, orchestrating the smuggling of drugs to the United States and Europe and directing kidnappings and extortion of local businesses.

"When officials attempt to curtail the power criminal groups exercise from behind bars, their leaders often deploy members on the outside to push back.

“The principal center of gravity, the nexus of control of organized crime, lies within the prison compounds,” said Mario Pazmiño, a retired colonel and former director of intelligence for Ecuador’s Army, and an analyst on security matters.

“That’s where let’s say the management positions are, the command positions,” he added. “It is where they give the orders and dispensations for gangs to terrorize the country.”

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I wrote a related post in November (see below) about a Brazilian prison gang, and received an illuminating email from Professor David Skarbek of Brown University, saying

"I enjoyed your blog post about the PPC Brazilian prison gang. I thought that you might be interested to know that the same phenomenon exists in the US as well. I'm attaching a piece I published in the American Political Science Review on the Mexican Mafia in Southern California."

Here's the link to that article:

Skarbek, David. "Governance and prison gangs." American Political Science Review 105, no. 4 (2011): 702-716.

Abstract: How can people who lack access to effective government institutions establish property rights and facilitate exchange? The illegal narcotics trade in Los Angeles has flourished despite its inability to rely on state-based formal institutions of governance. An alternative system of governance has emerged from an unexpected source—behind bars. The Mexican Mafia prison gang can extort drug dealers on the street because they wield substantial control over inmates in the county jail system and because drug dealers anticipate future incarceration. The gang's ability to extract resources creates incentives for them to provide governance institutions that mitigate market failures among Hispanic drug-dealing street gangs, including enforcing deals, protecting property rights, and adjudicating disputes. Evidence collected from federal indictments and other legal documents related to the Mexican Mafia prison gang and numerous street gangs supports this claim.

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Earlier

Tuesday, November 21, 2023

Balance of violence: prison-based criminal cartels, the case of Brazil's PCC.

Realtors still have a few tricks up their sleeves--"Whisper listings"

 It once looked as if the growth of the internet, and increased access to home listing databases, would substantially weaken the grip of licensed Realtors on the residential housing market in the U.S. Those predictions proved premature: Realtors have kept a very large market share, while earning high fees as prices rise (based on a percentage of the sales price).  

The WSJ has part of the ongoing story:

In Tight Housing Market, Thousands of Homes Are Reserved for Certain Buyers. ‘Whisper listings,’ made directly to select customers, are growing at a time when housing inventory is near record lows  By Nicole Friedman

"In the vast majority of transactions, an agent lists a home for sale on a local database and markets the property widely to drum up interest and get the best price. But in certain cases, a broker will show an unlisted property to a small circle of potential buyers more exclusively, often in hope of getting a deal done quickly.

"These private sales are known as pocket listings, or whisper listings. They have been around for many years. But they are on the rise now even though the National Association of Realtors adopted a rule last year aimed at discouraging their use following complaints from some of its members.

"The new NAR policy requires agents to add listings to their local database within a business day of publicly advertising the listing. But there is a notable exemption: Listings can still be kept off the database if they are only shared within one brokerage, called an “office exclusive.”

Israeli law internships serve multiple purposes, as recent changes make clear

Internships and pre-licensing employment under other names serves multiple purposes. One purpose is to train future professionals. Another might be to limit entry into a profession. Both things seem to be at issue with law internships in Israel.

Ynet has the story:
New two-year internship challenges Israeli law students
While senior lawyers welcome new regulations announced by Justice Minister Shaked, law students complain internship is akin to 'modern slavery.'

"Israeli law students will now have to complete a two-year internship in order to become certified lawyers as part of new regulations announced by Justice Minister Ayelet Shaked on Tuesday.

"The current requirement is of a one-year internship. The new regulations will come into effect for all students starting law studies this fall.

"In her remarks at the annual conference of the Israel Bar Association, Shaked clarified that the process of being admitted to the bar would now take five years including studies.

"I decided to extend the length of the required internship period to two years believing that law students will be much better qualified and prepared to take their bar exam, and will have to show a great deal of dedication in order to become lawyers," Shaked said.

"This will lead to a decline in the number of lawyers, and an increase in their professional expertise," she concluded."

The real estate broker cartel is tough in India

Here's a report of real estate brokers in India roughing up the employees of a company that seeks to help buyers and sellers manage without realtors:
Sign of things to come? Property brokers rough up NoBroker.in CEO and employees
Property brokers in Bengaluru resorted to physical assault to shut NoBroker.in.

"Bengaluru-based online real estate startup NoBroker.in claimed that its office was “attacked” by local agents and brokers on Tuesday. As the name suggests, the startup helps customers to save money paid as brokerage, something which would worry traditional property brokers."

HT: Sangram Kadam

The global strategic maple syrup reserve

The global strategic maple syrup reserve has been breached, here's the NY Times story: In $18 Million Theft, Victim Was a Canadian Maple Syrup Cartel

And here is the site of the Federation of Quebec Maple Syrup Producers

I used to bring small bottles of New England maple syrup with me as American themed house gifts when I traveled overseas...but it turns out that Canada is the big producer (I guess the Canadian flag is a clue...)

Collusion, for fun and profit: Marshall and Marx

I was delighted to receive in the mail the new book The Economics of Collusion: Cartels and Bidding Rings, by Robert C. Marshall and Leslie M. Marx.

The book is devoted to the description and analysis of explicit collusion (their emphasis). I haven't read it yet, but one of the things that makes explicit collusion so entertaining to study and read about is that there are often detailed accounts (typically from court cases) about just how the collusion was accomplished.

Examples:
Marshall:  "Collusive Bidder Behavior at Single Object Second price and English Auctions," with D. Graham, Journal of Political Economy, 1987, 95, 1217-1239.

John Asker: A Study of the Internal Organisation of a Bidding Cartel

American Economic Review, v100(3), 724-762, 2010. 

Illegal cartels and the prisoner's dilemma

Paraffin wax is a humble byproduct of oil refining, and the EU's competition commission recently fined a passel of big oil refiners for having maintained a paraffin cartel that illegally coordinated prices. Here's the story: Inside Europe’s High-Living Wax Cartel.

The cartel seems to date from the 1970's, so it was quite long lived. But when it collapsed, it collapsed quickly, because of the prisoner's-dilemma way the anti-cartel laws are written and enforced.

"In the paraffin case, as in others, some of the biggest offenders walked off with no, or relatively small, fines because they were first in the door with information implicating less-involved conspirators."
...
"By late February 2005, the cartel started to fracture. It gathered for what would be its last meeting in the brightly colored four-star Hotel Madison Residenz in Hamburg but was unable to come to an agreement on prices.
Three weeks after the Hamburg meeting, the cartel was shattered.
Shell, facing $360 million in fines for its participation in other cartels — involving synthetic rubber and bitumen, a thick form of petroleum — revealed the paraffin scheme to European Union authorities on March 17, 2005. Under European Union regulations, Shell won complete forgiveness for what would have been a nearly $130 million fine, as calculated by the commission. Other companies — some far less implicated — faced fines eventually totaling nearly $900 million."