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"Narconomics", what narcotics trafficking teaches us economically

2022-05-08 08:56:38Kosova&Bota SHKRUAR NGA REDAKSIA VOX
"Narconomics", what narcotics trafficking teaches us economically
Naronomics

Tom Wainwright, in his highly interesting publication Narconomics, uses economics (e) conomics to describe and understand global narcotics trafficking (narco (s)).

The book is written as a research work of information, but also of field investigation, of the narcotics chain from "field production" to distribution to the consumer.

Following the chain from planting in South American countries, but not only, to the main consumer markets in the rich northern states, the author explains this activity, approaching it with the principles and functioning of the supply chain, competition versus agreements. secrets, human resource management issues, marketing and franchising, innovation and online commerce to diversify into other markets.

Concepts which are more than natural to use and follow in the study of legitimate businesses, are not invalid for the "business" of drug production and trafficking, or others similar to it. So where money (capital) circulates and factors of production (labor and labor force) are involved, the principles and mechanisms that drive activity seem to be the same.

What distinguishes it is the classification into legal or illegal based on legal criteria, or social and moral ethics in force, at a certain time and in a certain geographical territory. By the same token, the author seeks to shed light on the rationale and effectiveness of this traffic control and prohibition policies used by governments today.

We recall that the history of human society recognizes many such debates, where economic reasoning is intertwined with moral and ethical ones, reaching conclusions for which it continues to be in dilemma. Almost 90 years ago, in 1933, in the US, Congress lifted the ban on the production, transportation, and sale of alcoholic beverages.

"Narconomics", what narcotics trafficking teaches us economically
Tom Wainwright

While "Prohibition" was difficult to enforce and was accompanied by illegal production and sales, increased gang violence and other crimes related to this activity, the reasons for it were from those of morality and faith, to the needs to guide the use of cereals in the production of food rather than alcohol.

In recent decades, another massive campaign to ban smoking indoors, accompanied by an educational campaign on the health damage it causes, has significantly reduced consumption, without taking drastic measures and measures on the production and marketing of his.

In juxtaposing economic arguments with ethical-moral ones, another important variable turns out to be education.

Over such a barrage of arguments, the author of "Narconomics" develops his opinion on the "dog business" and challenges the policies of states, synthesized in the title of the last chapter "Why economists are the best police officers" (paraphrased in the title of this review article).

The author examines the striking similarities between ordinary managers and mobsters, ranging from the headache for human resources to the threat posed by online retailers.

It also sheds light on four major mistakes that have hampered officials' efforts to tackle the drug industry.

Mistake 1: Obsession with supply. Whenever the fight is strongly directed against supply, especially to the producer, the price increase as a result of the decline in production is not necessarily accompanied by a slowdown in consumption, as the demand for drugs seems to be inelastic in nature.

Consequently, the cartels use their purchasing power to force manufacturers to absorb any cost increases. For supply policy to take effect, it must focus on the end of the supply chain, on the rich world, where the product has a lot of value and if confiscated, can cause some significant harm to drug dealers, as well as the need to combined with the fight against demand.

 

Mistake 2: Saving money early to pay for it later. In the fight against crime, justifying it with the slogan that "public safety is priceless" and gaining popular support in return, money is spent on reinforcement, but not on prevention. Funding cuts in the education and rehabilitation programs of drug-related offenders may save some money, but it does not bring effectiveness in the fight against drug trafficking.

The author cites studies that have estimated that for $ 1 million spent as a fund to fight supply in countries of origin in Latin America, the reduction in cocaine consumption in the US is only 10 kg, and could increase to 20 kg if the war will to develop in the path of cocaine towards the consumer market.

In contrast, funding for prevention programs developed in schools manages to reduce consumption by 25 kg, a result that increases to a reduction of 100 kg of consumption if the $ 1 million fund is spent on treatment programs for drug addicts. Treatment is ten times more effective than persecution. Therefore, the author emphasizes that it is time for the generosity of governments with the police and their greed for development to change.

Mistake 3: Nationwide action against a global business. While the drug business today runs without borders, efforts to curb it take place mainly within state borders, without much thought about what happens across the border.

The author typifies this situation with the Latin American terminology "the effect of bakeries", according to which drugs can be successfully fought in one country, to appear in another. If drug cartels are already global businesses, there is no interstate authority to control them.

Error 4: Confuse stopping with control. The author highlights the frightening dimensions of the growth of the drug business, reiterating the dilemma of whether banning is really the most effective approach to bringing it under control, extracting cartels from this business, and protecting the public.

Since 1998, when the United Nations launched the slogan "A world without drugs: we can do it," production and consumption have multiplied, despite large sums of money used by governments to impose the ban. Therefore, the author suggests, the time has come to use "a range of ways" to address this "industry".

Without wanting to reach exhaustive conclusions on the most beneficial and appropriate ways to tackle the drug business, clearly the benefits will be felt in those countries where the state and its institutions are strong, operating with integrity and responsibility.

Countries with poor structural and institutional organization, where Albania undoubtedly enters, are more likely to reap the bitter and poisonous fruits of legalizing or using the "range of ways" to treat drugs, light or strong, than much-discussed theoretical benefits.


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