Winning the War on Drugs - An Economic Perspective
AIR WAR COLL MAXWELL AFB AL
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U.S. drug control policy goals are to increase drug price, depress demand, and restrict availability. With respect to cocaine, only one goal has been partially met -- casual use of cocaine has decreased, but addict use has increased, and crack is widely available and inexpensive. Despite higher rates of interdiction, the cartel lands more cocaine in the U.S. than market demand. As a result, there is a surplus of cocaine in the U.S. Under this condition, there are two reasons why interdiction is ineffective and only shows resolve. 1 The cartel has increased its profitability by taking over the wholesale and first retail market thereby enabling it to adsorb greater losses than interdiction can inflict and 2 To maximize profits the cartel has set the price of cocaine at levels which create a surplus. Given fixed prices, it can only reduce surplus to decrease supply which interdiction also achieves. An aggressive program to decrease demand would create an even greater surplus for the cartel to handle. Interdiction is effective when the market is in equilibrium. Under this condition, interdiction creates a shortage which increases cocaine price. Synchronizing interdiction with destruction of the cartels U.S. based wholesaleretail infrastructure coupled with immediate efforts to reduce demand hastens the effectiveness of interdiction.
- Economics and Cost Analysis
- Sociology and Law
- Medicine and Medical Research