New York Times: What Do You Get From A Drug War Costing $25 Billion Annually? Cocaine 74 Percent Cheaper Than It Was 30 Years Ago

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Here's hoping for some real change

New York Times reporter Eduardo Porter has a terrific column, Numbers Tell of Failure in Drug War, excoriating the stupidity and tragedy of the War on Drugs in the July 4 issue. Here are just a few tidbits:

When policy makers in Washington worry about Mexico these days, they think in terms of a handful of numbers: Mexico's 19,500 hectares devoted to poppy cultivation for heroin; its 17,500 hectares growing cannabis; the 95 percent of American cocaine imports brought by Mexican cartels through Mexico and Central America.

They are thinking about the wrong numbers. If there is one number that embodies the seemingly intractable challenge imposed by the illegal drug trade on the relationship between the United States and Mexico, it is $177.26. That is the retail price, according to Drug Enforcement Administration data, of one gram of pure cocaine from your typical local pusher. That is 74 percent cheaper than it was 30 years ago.

This number contains pretty much all you need to evaluate the Mexican and American governments' "war" to eradicate illegal drugs from the streets of the United States. They would do well to heed its message. What it says is that the struggle on which they have spent billions of dollars and lost tens of thousands of lives over the last four decades has failed. …

…conceived to eradicate the illegal drug market, the war on drugs cannot be won. Once they understand this, the Mexican and American governments may consider refocusing their strategies to take aim at what really matters: the health and security of their citizens, communities and nations.

Prices match supply with demand. If the supply of an illicit drug were to fall, say because the Drug Enforcement Administration stopped it from reaching the nation's shores, we should expect its price to go up.

That is not what happened with cocaine. Despite billions spent on measures from spraying coca fields high in the Andes to jailing local dealers in Miami or Washington, a gram of cocaine cost about 16 percent less last year than it did in 2001. The drop is similar for heroin and methamphetamine. The only drug that has not experienced a significant fall in price is marijuana.

And it's not as if we've lost our taste for the stuff, either. About 40 percent of high school seniors admit to having taken some illegal drug in the last year — up from 30 percent two decades ago, according to the Monitoring the Future survey, financed by the National Institute on Drug Abuse.

The use of hard drugs, meanwhile, has remained roughly stable over the last two decades, rising by a few percentage points in the 1990s and declining by a few percentage points over the last decade, with consumption patterns moving from one drug to another according to fashion and ease of purchase…..

Jeffrey Miron, an economist at Harvard who studies drug policy closely, has suggested that legalizing all illicit drugs would produce net benefits to the United States of some $65 billion a year, mostly by cutting public spending on enforcement as well as through reduced crime and corruption.

Go read the whole article. Of course, Reason has been against the War on Drugs for, oh say, ever since it began publicaton nearly 50 years ago. Go here for Reason's extensive archive on the asininity of the War on Drugs.

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  1. mostly by cutting public spending on enforcement

    This is why the WoD will never, ever end.

  2. Even if the DEA were effective in raising market prices for drugs this would not be a good thing. People who are addicted to drugs don’t rationally prioritize their drug use. The more they have to spend to get their fix, the less they can spend on rent and food. Many of these people have children to take care of. Think of the children, legalize drugs.

  3. Okay – great premise for an article. But the suspicious economics trained part of my brain kept looking for the evidence that DEMAND for cocaine has not decreased.

    Unfortunately (or fortunately depending on your point of view), I didn’t find anything in regard to cocaine demand in the article. It mentions High Schoolers still do drugs, but not which ones.

    The same evidence (cheaper coke) could be spun as proof that the war on drugs has succeeded in lowering the demand for drugs.

    1. My question exactly: is the price reduction due to increased supply or decreased demand?

      1. And if there is a reduction in demand can the DEA claim any credit for it? Absolutely not.

        1. D, RCD, Dy: This may not be enough to convince you, but he does mention that demand has remained stable. From the article:

          And it’s not as if we’ve lost our taste for the stuff, either. About 40 percent of high school seniors admit to having taken some illegal drug in the last year ? up from 30 percent two decades ago, according to the Monitoring the Future survey, financed by the National Institute on Drug Abuse.

          The use of hard drugs, meanwhile, has remained roughly stable over the last two decades, rising by a few percentage points in the 1990s and declining by a few percentage points over the last decade, with consumption patterns moving from one drug to another according to fashion and ease of purchase.

          1. I guess I was hoping for something specific to cocaine.

            1. The Bureau of Labor Statistics is slacking.

              1. Statistician-Dave’s not here, man.

          2. If this chart is correct, it looks like use peaked in the mid 1980’s, fell a lot in the early 90’s, and then came up a bit. however, this is a chart of “cocaine” use, so I’m pretty sure it includes crack, and not just powder, which appears to be the main focus of the linked article.

          3. If the supply curve shifted and the quantity remained stable, that means the demand curve also shifted (as I dont believe the demand curve is perfectly inelastic) in order to make Q1=Q2.

            So there must be less demand as well as greater supply.

            1. Thinking about the shape of the demand curve, see if this makes sense:

              At high and low prices, the demand is very inelastic. At high prices, only addicts will buy and they dont care much about price. At low prices, it doesnt matter, as lots of people wont try it no matter how low the price goes, so you approach an asymptote. In the middle range, elasticity is probably fairly balanced. Lowering prices raises quantity, raising prices lowers quantity, in reasonably balanced ways.

              Yes, no, insanely wrong?

    2. Anecdotally speaking, cocaine usage increased in the late ’90s, then leveled off in the aughts.

      1. Anecdotally speaking, cocaine usage spiked massively for one weekend in 2004 and then went back to zero when turned out it wasn’t as much fun as MDMA.

  4. Assishness is a way better word than asininity.

  5. Unfortunately, at the end of the article, Mr. Porter trots out the same tired lines about stopping the arrest of users and “going easy on small-scale dealers”. This is exactly why we have the violence associated with war-on-drugs violence. When you allow consumption, but make supply illegal, that creates more opportunities for illegal profit, which just creates more violence.

    1. dA: True, but he does cite Miron’s analysis which concludes that complete legalization would be a net economic benefit.

      1. I found it interesting how Niall Ferguson referred to the UK as a narco-state in the mid-1800’s, relative to its relations with China. It was an interesting example of the dynamics that will exist in the world when some states go the full-legalization route while others remain wedded to the banhammer.

  6. Well if it becomes so cheap that it’s unprofitable it will go away, right?

    1. Drugs are here to stay, no matter what the government does. We might as well save $25,000,000,000 every year.

    2. It’s a plant. The price floor is “commodity,” not “unprofitable.”

  7. That is 74 percent cheaper than it was 30 years ago.

    See what the free market does to health care prices!

  8. Does the 74% cheaper than 30 years ago statistic take into account inflation?

    1. If it doesn’t, then, well, whatever. If it does, SHIT that’s some price reduction!

    2. Excellent question.

      I didn’t RTFA, but does it take into account that the quality is much better than it was 30 years ago?

      I think part of the reason why it is cheaper, is that mid-level “managers” are much more business savvy. They understand they need to supply a quality product at a reasonable price. They need to make sure their clients are relatively safe when they go into the city and on to the “sets”. They also know they need to keep all of the “beats” off the streets. They know they need to “bribe” the local politicians with campaign contributions. Some of them even become mayors, like the former mayor of Camden, NJ, Milton Milan. The first thing he did when he became mayor was raid his competition’s operation. The Feds didn’t like that because they weren’t involved, and the Feds eventually convicted him of corruption. What was the corruption? He had city employees cutting the grass of his private home while they were on the clock. Whoop-di-doo.

      The managers even know how to “rotate” employees. The first offense in my area for street level dealers is 4 years with 1 mandatory. Second offense is much higher. They will leave a street level dealer on the street until he gets busted. He does his one year, and when he gets out, they will give him a “safe” job, like bagging or transporting.

      It’s become quite an operation, and every mother fucker has their hand in it, nowadays.

  9. About 40 percent of high school seniors admit to having taken some illegal drug in the last year

    No, 40% of high school seniors claim, on anonymous surveys, to having taken some illegal drug in the last year. If you think they’re filling out those surveys honestly, you’re an utter idiot who knows nothing about high school students.

    1. We took a survey like that in my high school. My friends and I all lied and made ourselves out to be drug dealing hookers even though we were all good students who never did anything illegal. We were still bored and immature enough to amuse ourselves on a survey.

  10. Well, those are surveys that they may or may not believe are anonymous. So I’m not sure which way that cuts.

  11. $177 for gram of coke? You gotta be kidding me! That’s the going price for an eight ball (3.5g)!!!!

    1. That’s 100% pure cocaine. They’re taking the average street price and dividing by the average purity. They also usually use the price of smallest common size sold (whatever’s in a 20 bag maybe). This wildly inflates the price, which is how they point to success with confiscation of what seems like a shit load of product. “1.3 million dollar of cocaine seized!!!” It’s doubtful that would be the price if you bought it in bulk.

  12. “This number contains pretty much all you need to evaluate the Mexican and American governments’ “war” to eradicate illegal drugs from the streets of the United States. They would do well to heed its message. What it says is that the struggle on which they have spent billions of dollars and lost tens of thousands of lives over the last four decades has failed. …”

    Picky, picky, picky
    /Pat Paulsen

  13. Coke processing is probably cheaper now with today’s technology. Pot has gone up in price but so has the quality, Hydroponic probably costs more to produce, they cant just get away with Mexican dirt farm weed anymore that stuff sells for $25 an oz but the good stuff averages around $350 and its obvious how much time and energy is put into its cultivation.

  14. The drug war will never end because the socialists would rather die than give up the commerce clause’s power to micromanage everything about everyone’s life.

    Ending the drug war means ending minimum wage, the NLRB, and a million other things.

    They’d rather sacrifice all the poor black kids in america than give those up.

  15. lol, thats jsut too funyn dude. WOw.

    http://www.Privacy-Peeps.tk

  16. Thats the unregulated market for you. Greater supply at lower prices.
    If they wanted to decrease drug use, they would tax it.

  17. The numbers here are so, SO wrong! Let me share: 30 years ago street cocaine sold for an average of about $80 to $100 a gram. The UNcut cocaine (IF you could even find it) sold for an average of $120-$140 a gram. Saying it has decrease in price by “74%” is utter nonsense!!

    I KNEW quite a few people who sold it back then and who also sold pot. I wasn’t a user (of cocaine) but I was ALWAYS being reminded of prices for these two things because many of my friends did them and it’s UTTERLY ridiculous to see this much UNresearched information being tossed around as the ‘Truth’. I just gave you the ACTUAL numbers. If cocaine was NOW down 74% to an average of 30 bucks a gram, usage would be OFF the charts and even CNN would make a fuss over it.

    Thank You!~

  18. The numbers here are VERY wrong. Cocaine is NOT down 74%. That would make cocaine roughly 30 bucks a gram!

    Nonsense crap.

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