Runnin’ all ’round my brain.

Cocaine prices per gram in selected American cities, 1999 and 2005.

1999.             2005.               Change in base price.

Seattle.                       $80-100           $30-100          -62%

Denver.                       $100-125         $100-125         0%

Los Angeles.               $50-100           $30-100           -40%

Dallas.                        $90-125           $50-80             -44%

Chicago.                     $75-100           $75-100              0%

Detroit.                       $75-100           $50-120           -33%

Atlanta.                      $100                $80-100           -20%

Miami.                        $40-60             $20-110           -50%

New York.                 $21-40             $20-25             -0%

 

There are a bunch of ways of cutting up this data, so to speak.

First, in 1999, cocaine was a glut on the market in New York, Miami, and Los Angeles. These were major cities with a large over-all market, ports of entry, and centers of a counter-culture. In contrast, it was hard to come by in Atlanta, Denver, Dallas, and Seattle. These were chief cities of “the provinces,” as the Romans would have put it. Six years later Seattle had joined New York, Miami, and Los Angeles as the capital cities of cocaine. This probably has something to do with the explosion of the computer and software industries in Seattle. Maybe writing software allows for blow in a way that designing airplanes for Boeing does not. Still, the “cocaine revolution” hadn’t reached Denver, Atlanta, and Chicago. These cities remained the ones with the highest priced (and thus least available) cocaine.

Second, even in two of the original core cities of cocaine consumption, Miami and Los Angeles, prices fell sharply. New York began with the lowest price and pretty much stayed there. Perhaps $20 a gram was the rock-bottom price for cocaine. Lots of people hustling on a big, but limited, market, all of them competing to deliver the best product to the most people at the lowest price. Adam Smith take note. Labor costs driven down to the subsistence minimum. David Ricardo take note.

Third, prices fell while the Drug Enforcement Agency was spending billions of dollars to drive up the price (and thus reduce consumption) through interdiction and eradication. Why didn’t this effort produce better results?

One reason is that cocaine producers in Columbia dispersed their coca-growing operations into more remote areas and spread into Peru and Bolivia as well. These are outside the range of US-sponsored eradication efforts. Production went up, not down.

Another reason is that, since the signature of the North American Free Trade Agreement (NAFTA) in 1994, there has been a huge increase in trans-border truck and vehicle traffic between Mexico and the United States. This made it much easier to move cocaine into the United States. One government policy warred with another government policy. The thing is that people trying to make money won in both cases. What’s more American than that?

Final thing to think about: 88 percent of cocaine moved through Mexico. Eventually, the Mexican intermediaries for the Columbians wanted a better deal. Much violence followed. (See: Narcostate with a State.)

 

Ken Dermota, “The World in Numbers: Snow Fall,” Atlantic, July/August 2007, pp. 24-25.

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Origins of the War on Drugs

You used to be able to get cocaine eye-drops off the shelf in a drug-store and the Sears and Roebuck catalogue offered cocaine and a syringe for $1.50. Doctors regularly recommended opium to patients suffering from “female complaints.” Cramps? Get your head up.

Then domestic and international influences came together to launch a “war on drugs.” On the one hand, opium was legal in Asia. Chinese immigrants brought opium-smoking to America and the United States conquered the Philippines, where opium was legal. In 1901, Charles Brent, an American missionary in the Philippines, began to campaign for the international control of addictive drugs. President Theodore Roosevelt helped create an International Opium Commission (1906), then appointed Dr. Hamilton Wright as the first U.S. Opium Commissioner. The International Opium Convention (1912) tried to regulate the trade.

On the other hand, Americans began to associate drugs with both crime and race. African-Americans and Chinese immigrants became centers of concern, as did the white women who supposedly fell prey to non-white men as a result of drug use. A 1914 law limited the sale of narcotics and cocaine to those with a doctor’s prescription. A 1922 law regulated the import of narcotics. A 1924 law outlawed heroin. A 1935 law assigned enforcement responsibility to the states.   A 1937 law banned marijuana. Between 1914 and 1945 the number of addicts in the United States reportedly fell from 1 in 400 people to 1 in 4,000. Things cooked along quietly for the next two decades. Charlie Parker and Robert Mitchum, people like that, used drugs.

Then recreational drug use began to spread as part of the counter-cultural strife of the Sixties and Seventies, along with long hair, peasant dresses, pre-marital sex, draft-dodging, and really great music. The “Up With People” crowd pushed back hard. President Nixon seized on the issue of drugs in 1969. The Comprehensive Drug Abuse Prevention and Control Act (1970) created the current system of classes of drugs. President Nixon announced a “war on drugs” (1971). A National Commission on Marijuana and Drug Policy (1972) reported that marijuana was not addictive and did not pose any serious threat to society or its users, and recommended de-criminalization. “Shut up” President Nixon explained. A presidential order (1973) created the Drug Enforcement Agency (DEA) to co-ordinate and lead efforts to halt drug smuggling into the United States and to suppress the illegal black-market for drugs within the United States.

The current “war on drugs” has both international and domestic fronts.

On the international front, the United States seeks to attack the foreign sources and supply lines that feed the American market. The principal growing sites for opium poppies (the source of heroin) are highland Burma (the “Golden Triangle”), Afghanistan, and Mexico. Of these, Afghanistan is by far the most important, with 93 percent of opiates now (well, 2007) coming from Afghanistan.[1] Interdiction of drug traffic can involve support for local police; aerial spraying of defoliants; interception of ground, sea, and air shipments; and discovery of drug factories where the raw materials are turned into a finished product for sale.

On the domestic front, the chief anti-drug measure has become sharply increasing arrest rates. During the 1970s drug arrests scarcely increased, in spite of Nixon’s call for a “war on drugs.” Only during the 1980s did policy change. While arrests for all crimes rose by 28 percent during that decade, arrests for drugs rose by 126 percent. Between 1980 and 2010 the share of Americans imprisoned quadrupled. Half a million people a year go to prison for drugs.

[1] Revenues from sales in Western countries provide Afghan traffickers with over $60 billion of “foreign aid” each year.   In comparison, the United States provided the Afghan government with over $50 billion of aid over ten years. Since much of the trade is controlled by the Taliban, we are paying more money to our enemy than to our ally.