Since President Felipe Calderón initiated a military offensive against Mexico’s powerful drug cartels in December 2006, more than 50,000 people have perished.

The Mexican military, which had largely avoided the country’s pervasive corruption, is now showing signs of succumbing to the temptation of drug money. And as the increasingly brutal crackdown causes inconveniences for the drug cartels themselves, they only seem to be expanding their operations.

In his new book The Fire Next Door: Mexico’s Drug Violence and the Danger to America, Cato senior fellow Ted Galen Carpenter forcefully argues that the current U.S.- backed strategy for trying to stem the country’s drug violence has been a disaster. Officials in both governments insist on a kneejerk adherence to comprehensive prohibition, rather than exploring alternative policy courses. Yet this failure in leadership, Carpenter demonstrates, is unsustainable.

“The deteriorating security conditions in Mexico, and the risk that the frightening violence there could become a routine feature of life in American communities as the cartels begin to flex their muscles north of the border, make it urgent that leaders of both countries reconsider their approach to the crisis,” he writes.

The current debate on what course of action to take centers on two contentious issues. The first is whether the carnage in Mexico is reaching the point that the country is in danger of becoming a “failed state.” Carpenter points to several worrisome indicators—from sophisticated cartel operations that now target even the most prominent political figures to large numbers of middle- and upper-class families exiting the country for fear of their security. While fears of a true failed state may be overblown, “the overall trend is troubling,” Carpenter writes.

The second issue is whether drug-related corruption and violence is now seeping over the border. This carries with it the risk that the turf battles between rival cartels in Mexico could become proxy wars in U.S. communities. As Carpenter shows, the cartels are clearly expanding north— threatening both American citizens and law enforcement personnel—and may even be infiltrating the U.S. military. While the implications of these trends are still controversial, Carpenter notes that one thing is clear: “The carnage associated with the black-market trade in drugs does not respect national boundaries.”

The strategy behind the war on drugs has long rested on two pillars. The first is the need to shut off the flow of drugs from source countries through various eradication, suppression, and interdiction efforts. The second is to significantly reduce U.S. demand through a combination of criminal sanctions, treatment programs, and antidrug educational programs. Both strategies, according to Carpenter, have amounted to a “futile, utopian crusade”—with an array of ugly side effects.

Prisons in the United States are now bulging with nonviolent drug offenders. The war on drugs has destroyed black families and discouraged the pursuit of legal employment. The most unsavory individuals now gain dominant positions within these communities, creating dubious role models. Meanwhile, users themselves are stigmatized, often with lifetime criminal records.

Carpenter details the mounting crisis in both countries in full and makes the case that the only effective strategy is to defund the cartels through drug legalization. As Vicente Fox, former president of Mexico, writes in the book’s Foreword, “We now stand on the final frontier of the old approach to drug policy, as evidence mounts that the current strategy is not working.”

As the violence flares to an alarming extent in Mexico, the only solution, Carpenter argues, is also the most radical. “U.S. leaders need to take constructive action now, before that fire consumes our neighbor’s home and threatens our own,” he concludes.