Wednesday, February 25, 2009

Here We Go Again: Why Breaking A Drug Cartel Will Increase Drug Use

If you are in favor of the war on drugs, you should like drug cartels. A successful cartel behaves like a monopolist -- that is, they restrict output to raise prices. Granted, they use violence to maintain their cartel, but hey, you're the one advocating a war here.

For those of us opposed to the drug war, the destruction of a drug cartel is just another demonstration of the ridiculousness and stupidity of American drug policy. Break up the cartel and lots of small competitors move in, causing the market quantity to increase as the price falls to the cost of supply.

You would think that, of all positions in the government, the Attorney General would be in perfect position to understand this. After all, not only does s/he oversee the DEA, but also the Antitrust Division within the Department of Justice. With the right hand the DOJ argues they encourage competition, high output, and low consumer prices by smacking down cartels (so they claim), and with the left hand they are keeping us safe from access to drugs by...smacking down cartels? How does that contradiction escape them?

Nevertheless, CNN is keeping us up to date on the latest events in this policy charade:
U.S. investigators have wrapped up a major 21-month drug-enforcement operation aimed at crippling a powerful and violent Mexican cartel operating in the United States, Attorney General Eric Holder announced Wednesday.
In two years, cocaine prices more than doubled, while purity dropped by a third, indicating enforcement efforts are having an impact, Leonhart said.

"The result [of law enforcement pressure] is less cocaine on the streets of the United States. That's why the price has been affected. That's why the purity has been affected," she said.
Or the cartel was trying to increase cocaine prices because...they are a cartel. Regardless, I'm sure your temporary supply disruption is a permanent one. Congratulations DOJ, your continued existence is a mockery of humanity.

1 comment:

Matt E. Ryan said...

I never got the sense that drug cartels were "cartels" in the economic sense of the word. In fact, in the article, it mentions that they would be battling the powerful Mexican drug cartels-- plural. The idea of more than one cartel, at least at the country level, doesn't really make any sense. I always thought it was a word that evoked the idea of evil business practices-- thus, to get the public behind the concept of fighting the drug war, viola, we're fighting cartels.

If the drug war existed in a significant manner prior to the mid-1970s-- and I don't know the history of it-- it would be interesting to see if they used the word "cartel." Cartel became a bad word due to OPEC. I'd be willing to bet the word cartel wasn't used anywhere in popular media prior to the oil crisis. Just my sense of things.