I have often railed about the stupidity of our drug warriors when it comes to basic principles of economics. With the Drug Czar crowing about the temporary increase in the price of cocaine, Robert Guest of I Was the State provides a very concise lesson:
When supply is reduced and demand remains the same, prices rise. Rising prices signal new suppliers to enter the market. Demand creates supply.
The price of cocaine has risen to $118 per gram. Any product worth $50,000 a pound will find drug cartels lining up to supply it. Mass incarceration and “Just Say No” ads won’t change the simple law of supply and demand.
This drug war “victory” will be short lived. Drug cartels will find new ways to import the goods that Americans demand. We give the drug cartels a monopoly on the American cocaine market which in turn gives the cartels billions to import their wares.
We can only win the drug war by choosing new suppliers.
Of course, then the Drug Czar would be out of a job. Hmmm, maybe he does understand economics…