Monetary Policy

The Cocaine Standard

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The Telegraph reports from Guerima, Colombia, where government troops recently drove out FARC guerillas:

Countless ordinary people depend on the coca trade. "We are sitting on a mountain of coca and a series of Farc 'IOUs' ", said one local. "We need the rebels back to pay the debts and buy the coca, otherwise the town will die."

No money has reached Guerima for months and transactions are conducted in coca, with one gram enough to buy a soft drink.

Add that to your list of commodity moneys. I found the story via Wired for Strange, which also notes that bottle caps are being used as a currency in Cameroon and claims that drug-free urine is being used as a currency behind bars:

This strange alternative to money is used in the prison system; they have been known to use cigarettes, sardine cans and now urine. This has become a precious commodity because drug screening has become much more prominent in penitentiaries. Clean samples are traded and they are usually kept in a condom and warmed to body temperature by rectal insertion.

A commodity, yes—but a currency? Seems to me that the Piss Standard would be especially susceptible to inflation.

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  1. But why would you need to piss test inmates that are locked up and guarded by police? Seems to me this would be a 100% drug free environment.

    Unless something highly unlikely like prison guard bringing drugs into the jail is taking place. Surely this can not be the case. I mean hell we are so close to getting drugs off the street there is certainly no way they are in prisons, right?

    To me this is a perfect example of how the WoD will never be won. When you as a government with complete 100% control over a persons life locked up 24/7 365 days a year can not keep people from getting drugs I think any attempt you make to argue that your succeeding in getting them off the street corners is going to be a bit weak. Really think about it, they can not keep drugs out of PRISON but they claim to be able to stop them in the FREE world. What a pipe dream.

  2. Actually, it might be difficult to inflate the P supply, at least within the mainly closed system that is a prison population. First, the P must be clean; this obviously is not the easiest thing to do, otherwise the value of clean P would not be so high. Second, it will not last forever or even a long time; eventually its usefulness will expire and as such so will its value. So new P is always needed as the old P is either used or expires, or even is confiscated as contraband. This alos limits the supply in that increased production requires increased means of storage, which leads to a greater likelihood of its capture and destruction.

    Granted though that a ‘producer’ of quality, clean P could attempt to inflate the supply by drinking many more liquids. However, if a sample is overdiluted it loses its usefulness for passing drug screens–the test results come back as ‘abnormal’ or otherwise unreadable, requiring a new test.

    Certainly its not the most stable of currencies, as many factors can greatly affect its supply in a very short time frame. But it does have a benefit over fiat currency in that it has inherent value–it is in demand for its own benefits and not simply as a means exchange or storing value. And as a commodity, since its value can be achieved only in its, um, *consumption*, it has a built in mechanism against inflation.

    Consider it similar to a situation where we were using fuel-grade gasoline as currency. There would be constant pressures that decrease the supply as it is consumed. This also is how the economies of many online MMO RPGs work; theres a ‘money-sink’ built in somehow, usually, so that there is a constant destruction of money that hopefully matches the constant creation of money.

  3. This has become a precious commodity because drug screening has become much more prominent in penitentiaries.

    We lock people up, guard them 24/7, search their mail and their visitors, and we can’t keep illegal drugs out of prisons!!!

    Tell me again Mr. VP elect, how are we doing with the War on Drugs Liberty?

  4. Trickle down economics at its best.

  5. Bottle caps are also the currency of Wasteland DC after the nuclear war in Fallout 3. Any gamers out there should check it out. Developed by Bethesda, the team behind Oblivion, it’s an RPG/FPS/sci-fi/horror hybrid in one huge, immersive package. I cannot do it justice in an H+R comment thread, but running around a destroyed Washington with a laser gun, mini-nukes and a baseball bat has never been more fun.

    PS – Coke at 85 cents a gram. What a country!

  6. As a preface to both of these comments I would say I think we are talking about prisons in Cameroon here so the technology and all may be pretty outdated, and security is probably not the greatest. Still the points apply.

    @OGRE

    Actually all that would happen with the urine is the liquid evaporates, which isn’t a problem. All you do then is scrape the powdery residue left and “just add water” to get it back to urine. Also most drug tests will not come back as “abnormal” just from pure water dilution. If they use the “dip stick int he cup” method it will just return results. Lab tests these days are so advanced the water content of the urine doesn’t matter.

    Also @J sub D and Dee

    Great points, if they can’t keep the drugs out of the prisons how in the hell could they expect to get them off the streets.

  7. Drug-free urine in prison is

    1. Basically fungible
    2. Rare
    3. In universal demand

    So I suppose it would work just fine as a currency. The only problem, I guess, is that it is a little cumbersome for storage and transaction.

  8. “Seems to me that the Piss Standard would be especially susceptible to inflation.”

    Perhaps, but if a Congressional challenger said that “my opponent is pissing away the people’s money,” the accusation would hit home.

  9. I think we are talking about prisons in Cameroon

    We aren’t. Sorry if my phrasing was unclear. These are First World prisons.

  10. Talk about liquid assets!

    Freezing someone’s assets would be much easier – as long as you have a freezer.

    The term “revenue stream” would have a more literal meaning.

    As would “capital flow.”

  11. El,

    cumbersome for storage

    condom in your “prison pocket” – mentioned in article – simple…

  12. Seems to me that the Piss Standard would be especially susceptible to inflation.

    The condoms, at least, are able to inflate to many times their initial size.

  13. Surely, the prison “playas” will collect a couple of “cows” (heh, heh) who will not be allowed to use drugs. To prevent inflation, the playas will conspire with the guards and fight among themselves to gain control of the supply of potable fluids, principally water, but basically anything you can drink and piss. Thus, you will have a two-step currency, one for the playas and one for everyone else.

    Feel free to make analogies to Hayekian capitalism or anything else you damn please.

  14. The advocates of a federal urine standard have a built-in theme song:

    “All we are saying is give piss a chance.”

  15. To think of all the currency I’ve been pissing away…such a waste. Semi-synthetic opiates don’t show on drug tests, right?

  16. Also, “shake your money-maker.”

  17. cumbersome for storage

    condom in your “prison pocket” – mentioned in article – simple…

    Simple, but cumbersome. Unless you don’t find carrying around condoms filled with noxious liquid to be cumbersome…

  18. Echoing Ska’s comments about Fallout 3. Nothing like blasting a supermutant’s head to pieces with a bolt-action rifle held together with wire and duct tape!

  19. So this is what “injecting liquidity” means.

  20. The really funny thing is, not only can drugs get through to prison, enough get through so that clean urine is rare.

  21. I’ve only ever been to a women’s jail, but I’d hope that the smell of vats of urine evaporating would be noticeable in American men’s prisons as well.

  22. I’ve only ever been to a women’s jail

    Interesting. Tell us more.

  23. One of the great tragedies of our drug war is how it finances civil war in South America.

    Mike Gray has a great chapter on this (The River of Money) in his book “Drug Crazy.” At one point, half of Colobmia’s Supreme Court had been assassinated.

    It’s just like Prohibition, except we’ve outsourced the nastiest unintended consequences to other countries.

  24. Too many threadwinners to count.

  25. So, not only does locking them up not keep drugs out, but even drug testing doesn’t work in prison.

    More proof that the drug war is insane.

  26. I was wondering if anybody would mention Fallout. I highly recommend it. Seeing Washington D.C. as a radioactive wasteland is surprisingly therapeutic…

  27. I cannot do it justice in an H+R comment thread, but running around a destroyed Washington with a laser gun, mini-nukes and a baseball bat has never been more fun.

    But I thought D.C. had gun control. (Another thing you can’t keep out of prisons.)

    More proof that the drug war is insane.

    There’s also the “If you have to test them to see if they’re using, how is their using a problem?” factor. It’s not like they’re driving cars or anything.

  28. That Wired For Strange article appears to be based on this Cracked article (or maybe vice-versa; the date of the WFS article isn’t obvious to me).

  29. What, no “good money follows bad” jokes?

  30. But I thought D.C. had gun control. (Another thing you can’t keep out of prisons.)

    Wait, what? D.C.? Or guns? Because so far as I’ve heard, they’re pretty decent at keeping the firearms out of the hands of incarcerated felons. That’s why they go with a shiv.

  31. 31 comments and no jokes about the Gold Standard?

  32. Gold shower standard, maybe.

  33. Semi-synthetic opiates don’t show on drug tests, right?

    Not on your average screen.

  34. My brother’s best mate got nicked DUI twice & ended up in gaol (jail to yanks!) to ‘solve’ the problem. Naturally the best way to ‘cure” an alcholic is to imprison him, at age 21. Whereby, of course, a robust economy of guards and playas happily helped hook him on smack. So he gets out of gaol and is found…dead in a bus stop, OD’d. Thank you State, I feel so very safe now.

  35. Epi/SIV — they do on all the screens we do in the ED. YMMV but I’d be careful — a false advertisement suit in prison may have dire consequences.

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