Posted on 08/11/2014 6:13:42 AM PDT by Kaslin
America’s first foray into rolling back prohibition 2.0 is barely underway, and already marijuana prices have dropped low enough to convince some cartel farmers in Mexico to abandon the crop. Mere months after two US states legalized marijuana sales, five Nobel Prize-winning economists released a UN report recommending that countries end their war on drugs. It would seem they were onto something. But in order to further decrease drug-trade violence in so-called producer states, the US first needs to legalize marijuana, but then also the US must stop using the UN to pressure producer countries into supply-based drug prohibition.
Latin America is the largest global exporter of cannabis and cocaine. In 2011 the DOJ’s now-shuttered National Drug Intelligence Center found that the top cartels controlled the majority of drug trade in marijuana, heroin, and methamphetamine in over 1,000 US cities.
Research into black markets shows that producer countries experience more violence than consumer countries. In essence, the global war on drugs is a UN scheme to shrug drug war costs off rich countries’ shoulders and onto poor Latin American countries, with horrifyingly violent results. Much of the recent child migrant crisis is a direct result of children fleeing cartel violence and conscription into criminal gangs.
When drug prices are high, cartels will step up and produce. By keeping demand for cannabis and cocaine high, but supply low, the US in essence forced the Latin America economy to revolve around drugs. Under prohibition, there is no more profitable export. And of course violence proliferates in illegal industries. So in countries where the dominant export is illegal, violence will be endemic.
That’s exactly what the five economists found.
Every single one of the 20 cities with the highest murder rates in the world are in Latin America. Half of the top 10 global kidnapping hotspots are Latin American countries. Time magazine reports that the violence in the murder capital of the world, San Pedro Sula, Honduras, is due to the influx of Mexican drug cartels that funnel U.S.-bound drugs through the country. The cartels are also responsible for an increase in “atrocious crimes” like decapitation, usually used against rival gangs.
Ending the Drug Wars describes drug prohibition as “a transfer of the costs of the drug problem from consumer to producer and transit countries.” It references a report called Drugs and Democracy: Toward a Paradigm Shift by the Latin American Commission on Drugs and Democracy, headed by former Latin American presidents Fernando Henrique Cardoso, Cesar Gaviria and Ernesto Zedillo found that Latin America’s willingness to cave to first-world pressure has had horrific results, including:
The 200-percent growth rate of the illegal drug market between 1994 and 2008 explains roughly 25 percent of the current homicide rate in Colombia, according to recent research. That means Colombia sees about 3,800 more homicides per year on average associated with the war on drugs.
But when drug prices drop, the cartels will move onto other schemes. VICE News asked retired federal agent Terry Nelson whether legalization was hurting the cartels. “The cartels are criminal organizations that were making as much as 35-40 percent of their income from marijuana,” Nelson said, “They aren’t able to move as much cannabis inside the US now.”
America, the United Kingdom and other wealthy states are epicenters of demand. Not only do demand states prohibit drug production and sales within their borders, but have traditionally used the UN to bully producer countries to do the same through moves such as the United Nations Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances of 1988 or the US annual certification process.
And for what? The report points out that worldwide drug prohibition has succeeded in raising prices on illicit drugs. This may have impacted rates of use in consumer nations. Even if higher prices suppress demand, for which there’s little evidence, there is simply no way to look at the worldwide cost of prohibition as being worth that possible outcome.
“There is now a new willingness among certain states, particularly in Latin America, to be vocal about the inherent problems within the system and to try to extricate themselves from the global drug war quagmires,” according to Ending the Drug Wars.
Ending the Drug Wars acknowledges the “microeconomic contradictions inherent in the supply-centric model of control.” It calls out the UN for trying to “enforce a uniform set of prohibitionist oriented policies often at the expense of other, arguably more effective policies that incorporate broad frameworks of public health and illicit market management.”
However, the ultimately unresolvable problem with prohibition is that:
In a world where demand remains relatively constant, suppressing supply can have short-run price effects. However, in a footloose industry like illicit drugs, these price increases incentivise a new rise in supply, via shifting commodity supply chains. This then feeds back into lower prices and an eventual return to a market equilibrium similar to that which existed prior to the supply-reduction intervention.
Fixing this problem might be the most exciting part about ending America’s war on cannabis. Prices will continue to drop as American growth flourishes. Get ready for cheap, high-quality weed. And as prices drop and the supply side moves into the white market,cartels will get out of the game. And just as ending alcohol prohibition greatly diminished the size, influence, and brutality of organized crime, so will legalizing weed diminish the size, influence, and brutality of Mexican cartels.
As the epicenters of supply, Latin American countries resemble America’s inner cities, wracked with violent crime and corruption. Demand countries, however, resemble America’s suburbs, where the size and scope of the violence pales in comparison. Considering the power wielded by rich countries compared with poor ones, it shouldn’t be surprising that they’d be successful in using international pressure to turn poor countries into lawless killing fields. What’s galling is that they would choose to use their power this way, and get away with it for decades.
Prohibition doesn’t work. But the way it doesn’t work varies greatly depending on whether a state is primarily a producer or a consumer of illicit substances. Stopping international pressure on producer countries is the first step to a fairer, more effective international approach to drugs.
Sometimes the simple solution to a vexing problem is right there in front of us !!!!!
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Yet vehicle thefts continued to increase. Going soft on crime does not somehow make it disappear.
Sort of like what happened with the Mafia after Prohibition.
But you have to consider that once marijuana is legal, then suddenly the drug cartels have to compete with legitimate commercial growers and distributors. There is limited competition when providing marijuana is a criminal activity. That's what keeps the prices and profits up.
But once the cartels have to compete with a Wal-Mart (for example, even though it won't be Wal-Mart), the increase in competition from legitimate commercial providers severely cuts into the profit to the point where the cartels can no longer afford to compete.
And I think you'll find that the demand for drugs is pretty constant, meaning I don't foresee a huge spike in demand just because it's legal.
Pretty much anybody who is interested in smoking pot can already get it without too much trouble.
Sure, there will be some increase in demand perhaps, but I don't think it will be that big.
Why aren’t we flooded with illicit booze and tobacco then?
I’ll tell you why. When the government starts generating revenue, it becomes highly motivated to defend it’s own turf.
Only a small amount of marijuana users will go onto the harder drugs.
Yeah, because battling for share in a shrinking market, among violent groups, is always such a pleasant thing. Violence isn’t going to decline, it is going to increase.
... and didn’t tax your winnings.
Actually, a friend-of-a-friend spoke with a pot-head at a party a couple of months ago. We live just a few miles from the border of Mexico and the pot-heads refuse to smoke Mexican weed, although it’s cheap and plentiful here. It’s considered low quality and (believe it or not) they don’t like the pesticides.
Apparently, there’s a sweet-spot where the consumer is willing to pay the price for good drugs. Plus, they would prefer to do drugs legally and are wiling to pay a bit more to so so.
If you look at the situation with cigarettes, you’ll see that there’s a point where the price for legal items is just too high. Then the bootlegging starts again.
The trick for impacting the drug trade is for our government to not get too greedy. (I know, I know.. we’ve already lost.)
Bootleg liquor competes because some want to sell without a license (speakeasy, unlicensed bar) or paying taxes. It has little to do with availability of the product.
Same for cigarettes. Avoid the tax, make tons of money. Even terrorist groups are in the business to raise funds.
The war on drugs will just become the war on consumers.
They’ll just undercut the government approved and taxed weed.
Does it? How does the size of the bootleg liquor market compare to that of the legal liquor market?
Nah, I call BULLSHIT!
These are people that kill as easily as they take a leak. Not going to give up a profitable business without a fight.
You should have clicked the link:
'Farmers in the storied “Golden Triangle” region of Mexico’s Sinaloa state, which has produced the country’s most notorious gangsters and biggest marijuana harvests, say they are no longer planting the crop. Its wholesale price has collapsed in the past five years, from $100 per kilogram to less than $25.
'“It’s not worth it anymore,” said Rodrigo Silla, 50, a lifelong cannabis farmer who said he couldn’t remember the last time his family and others in their tiny hamlet gave up growing mota. “I wish the Americans would stop with this legalization.”'
“Bootleg liquor competes because some want to sell without a license (speakeasy, unlicensed bar) or paying taxes. It has little to do with availability of the product.”
Well, I really don’t think there is any significant competition between bootleg liquor and legal liquor, that was my point. Maybe I should have included a /sarc tag.
“Same for cigarettes. Avoid the tax, make tons of money. Even terrorist groups are in the business to raise funds.”
Smuggling cigarettes, or hijacking shipment to resell them, sure. Is anyone growing unlicensed tobacco in fields and making bootleg cigarettes? If they are, I have never heard of it.
“The war on drugs will just become the war on consumers.”
These types of tax evasion seem more like a war on government, and a win for consumers, to me.
They're having to outsource to FedEx and UPS. You should have more faith in the DEA.
Moonshine is quite prevalent here in NC, but it’s also expensive.
Yeah, I was in Trump Plaza the other day. Cigarette machines were there. $13.50 a pack.
corn likker? another victim of high corn prices due to ethanol as motor fuel...
Yes, farmers are farmers, it doesn’t matter if they are growing pot or soybeans. If the market drops out, they plant something else.
Why the popularity? Tradition?
I am one of the people not surprised by this, which is why I turned against the War on Politically Incorrect Drugs. Note my tagline.
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