The United States has been engaged in a “War on Drugs” since the Nixon era. Some wags quip “Yes, and drugs are winning!” Indeed, drugs will always win if the “drug war” is conducted in an unreasonable way.
The highest-profile program in the anti-drug effort is now in Colombia, in an attempt to “eliminate drugs at the source.” Fields of coca are sprayed with glyphosate herbicide from cropduster-type aircraft, killing coca plants and any other crops in the area.
The professed goal of “Plan Colombia” is to eliminate a large percentage of the cocaine that currently comes to the U.S. market, thus, according to the economic law of supply and demand, driving up the retail cost. If cocaine becomes more expensive, it is assumed that many users will opt out.*
So far, it can be observed that the billions of dollars spent to achieve the goal of increased price have been a complete failure, since cocaine has steadily become cheaper and purer on the streets. See, for instance, the Reuters article of May 8, 2007, “U.S. Colombia aid fails to drive up cocaine price.”
But let’s go back to the logic. Cocaine itself does not produce significant negative effects on society, in the sense of the hallucinatory effects of the product causing serious harm. It is the money associated with cocaine that is a problem. Therefore, if the price of cocaine goes up, there will be more social problems associated with the product, not less.
For the habitual user, if he desperately wants $50 worth of cocaine, he could probably steal $50 from his girlfriend or his family. But if the value of the same quantity of cocaine inflates to $200, the user must upgrade his larceny to liquor stores, gas stations or banks.
A higher price for cocaine will not reduce the "drug problem," but lower prices, which could come with decriminalization, would likely solve many of the problems associated with drugs. If the cost of a cocaine “high” were $5 instead of $50, how many criminals would be interested in supplying that market? How many gang members would kill a member of an opposition gang for his drug shipment, if that shipment was worth $60 or $70, instead of thousands of dollars?
Under our current system, cocaine is worth more than gold, so it is not surprising that lots of folks want to produce it and market it. If cocaine was worth the same as salted peanuts, the crimes associated with the cocaine trade would vanish.
The current efforts lead us to the question: “Qui bono-"Who benefits?” Persons currently in the drug trade benefit from artificially high prices, and persons who are handsomely paid to fight the drug trade also benefit. The rest of us lose, since we suffer the effects of drug-related violence, and we also pay the cost of purportedly anti-drug operations.
* An un-asked question is: if many users actually do opt out, won’t that cause the price to fall?