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More on Drug War Economics

Over the years here, we’ve talked a lot about economics and the drug war, and how obvious it is that the drug war cheerleaders are clueless (sometimes intentionally) about the basics of economics.

NPR did a piece about Tom Wainwright, who followed the drug war for The Economist. ‘Narconomics’: How The Drug Cartels Operate Like Wal-Mart And McDonald’s

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.”

Wainwright describes his new book, Narconomics, as a business manual for drug lords — and also a blueprint for how to defeat them. When it comes to battling the cartels, Wainwright says governments might do better to focus on controlled legalization rather than complete eradication of the product.

“The choice that I think we face isn’t really a choice between a world without drugs and a world with drugs,” he says. “I think the choice we face really is between a world where drugs are controlled by governments and prescribed by pharmacists and doctors, and a world where they’re dealt by the mafia, and given that choice, I think the former sounds more appealing.”

Nothing new to us, but good to be reminded of now and again.

Tom Wainwright has another article in the Wall Street Journal that came out a couple of days ago — How Economists Would Wage the War on Drugs — but it’s behind a paywall.

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12 comments to More on Drug War Economics

  • Matthew Meyer

    Why pose the choice as a binary between cartels and states/doctors?

    This bothers me because it doesn’t seem to include the option of the people taking ownership of our health through the use of homegrown medicinal plants.

    Much of the current American movement toward cannabis law reform in particular seems to neglect the home-remedy / health autonomy aspect of this question, such that you have recognizable names like Russ Belville stumping for horrible policies by focusing only on the availability of cannabis to “the consumer,” rather than considering the effects of the attempted reform of the production-distribution-consumption chain as a whole.

    • darkcycle

      California can afford to have a conversation like that. In the bulk of the rest of the country, people are still being arrested for simple possession. Out here on the now nearly fully legal Left Coast, we are in a better position to pick and choose the type of legalization we want. Places like Idaho are still putting people away for decades. There, anything that legalizes possession of cannabis is an improvement. I don’t like Russ, he’s an ass, and I don’t always agree with him, but here I kinda do.

      • Matthew Meyer

        Well, Russ doesn’t want to have that conversation in California, as he’s stumping hard for AUMA. And I’d be wary of locking in the kind of quasi-legalization your comment suggests is “better than nothing” in any state. But I agree CA needs a unique policy, and I think that the way things are heading guarantees a very robust informal economy for some time to come.

        • Windy

          Steve Kubby wrote:

          NEW INITIATIVE:
          “DON’T TAX OR REGULATE MARIJUANA”
          I woke up this morning and realized that the AUMA is perfect and I should stop criticizing it. That’s right, the AUMA is perfect — for teaching everyone why the government needs to butt out and leave weed untaxed and unregulated. The “seed to sale” requirements are so onerous, the restrictions on patients so outrageous that the Parker Initiative is the best way to campaign for what we radicals like to call the Tomato Model.
          Assuming that our KUSH IPO goes well on 4/20, I will set aside funds for an initiative in 2018 called, “The DON’T Tax or Regulate Marijuana Act.”
          Knock yourselves out Russ Belville and Chris Conrad! Go AUMA! Release the Kraken!
          Spirit works in mysterious ways, but always towards truth and justice.

        • DdC

          More one sided lame opinion using falsehoods to push an agenda. Boring as a GOPer. Shame on High Times for exposing the public to such bigotry.

          Typical Russ, I think I’ll call him Radical Rush from now on.

    • NorCalNative

      Matthew, taking ownership of this plant through education has been my focus for a long time.

      Since November I’ve completed 15 courses of postgraduate medical training on cannabis for 10.5 AMA PRA Category 1 credits through The Medical Cannabis Institute.

      My goal? To become an “evidence-based” Shaman. All the “magic” required is in the cannabinoids, terpenoids and flavonoids.

      I like your thinking on this topic. Are you still in school at the University of Virgina?

      OT: Anybody seen Kaptinemo? I miss that bald-headed fuck.

      • Matthew Meyer

        Nor Cal Native, I think we are kindred spirits.

        I finished my PhD in 2014 and I live in California, my home state, again.

  • Drugs must be legalized, and people must be free to obtain them without getting a prescription from a doctor!
    robertsrevolution.net

  • Unfortunately, the economics of controlled legalization can also be problematic (as we too often see pertaining to cannabis — e.g. licensing problems preventing critical medical access).

    Leverage from regulations (ultimately a euphemism for prohibitions, as each regulation always includes some form of ban) is not always honorable, and the problems of prohibition do not disappear in the form of regulation (e.g. teens obtaining alcohol in effectively a black market situation).

    We live in an equal pros/cons reality (a balanced/stable reality) where each one of us is always at some form of risk and will die regardless of any rule-of-law.

    Risk is subjective, so never a fair basis for law, but a fair basis for improving science and education.

    Liberty is supposed to be an unalienable right (i.e. liberty limited only by the right itself) for a fundamentally critical reason, logically speaking — to prevent abusive (discriminatory) law.

    Our fundamental, automatic, and unalienable right to liberty was defeated by hypocrisy from the national beginning (e.g. racial, gender, sexual, and drug use discrimination).

    As long as hypocrisy reigns supreme (e.g. legalize a potentially seriously powerful psychedelic such as cannabis, while other psychedelics basically of equal risk remain wrongfully illegal), any control from that hypocrisy is abusive (ruins too many innocent lives).

    We are not really a nation of laws, despite the “entertaining” illusion popularly propped up to the contrary.

    We are a nation of (usually politicized) agendas entrenched “victoriously” in law (too often from hypocritical leverage), so suffer from the consequent set of terribly complex pressures destabilizing and deteriorating national integrity (such as it may be) like natural forces violently shifting a house without a foundation to fairly quick collapse.

    Instead of voting for increasingly radicalized politicians out of anger and frustration, we need to build an objective (so fair, so just) foundation, and that inevitably requires improving language itself by way of carefully increasing certainty (a casual expansion of linguistics) for accurate judicial leverage (e.g. a maximally objective/fair/just definition of harm).

    Leveraging complexities without appreciation for basics is chaotic (not control).

    I respectably challenge anyone to define the concrete basics of our nation as it remains today, while I remain confident that challenge will unfortunately not be met.

    Without those concrete basics, leverage against Certain Drug Prohibition (or such) is terribly slow and torturous at best, while millions of innocent drug users continue to wrongfully suffer via punishment by hypocrisy (corruption).

    As virtual reality becomes popular, and inevitably recognized for its drug-like effects, expect a parental driven pressure to ban it ‘to protect the children’. Our communicatively and judicially muddy nation will then be under solid pressure to somehow distinguish free speech from ‘free experience’ — likely forming more agenda-driven complexity without basics (chaos).

    I would love to end on a positive note here, but that starts with us all.

  • Sean Wilmut

    drug war cheerleaders are clueless

    the allowance & acceptance of this idea never fails to astonish me
    These “incompetents” are running a Huge Racket, have been for almost a century, openly corrupting Reason, Justice, and common decency, making millions of dollars from jails, more dangerous drugs, and destroying lives with arbitrary police actions —

    and then they say ooops, and we pretend it was all an error

  • Drug war economics at work a little closer to home:

    “Bernie Will Ban Private Prisons. Hillary Accepted $133,246 From Prison Lobbyists”
    https://twitter.com/ThinkingKlearly/status/702289084618821632

    • jean valjean

      And don’t forget that Barbara Bush was rapidly buying up GEO Corp stock in 1989 at the same time as her husband was busy expanding the drug war, promising to build more prisons to house the victims. Clearly no conflict of interest there.