The Economics of Illegal Drugs - Drug Trafficking

The purpose of this web page is to help people gain a better comprehension of the drug trafficking issue in the United States.  As you read, and look at this site, you should understand:

• What are the other countries involved in drug trafficking with the U.S.?

• Which drugs are most popular and make the most profit?

• Supply/Demand of illegal drugs, and their relationship to drug trafficking.

• How are the drugs transported?

• What is the U.S. Government reaction to drug trafficking, and some solutions?

    The economics of illegal drugs is a complicated concept with many broad ideas and issues.  Illegal drugs are imported and exported over U.S. boarders everyday. Drug trafficking is a major contributor and the backbone to the economics of illegal drugs in the United States. When thinking of drug trafficking we need to answer several important questions.  Where and who are the drugs coming from or going to? Which are the most demanded drugs, and why? How are the drugs transported and what are the government reactions/proposed policies to reduce drug trafficking (“The Economic Analysis of Substance Use and Abuse” [Grossman, 2001])?  Drug trafficking is a major concern of the United States because the demand for drugs keeps rising and the greater the demand, the greater the supply imported from the other countries(“Illicit Activity” [MacDonald and Pyle, 2000]).

Drugs are illegal for many reasons, but the most important reason is that drugs inhibit a person from making intellectual decisions. Drugs alter the body physically and mentally, therefore reducing a person’s ability to make the appropriate decisions.  

In order to attack these problems we need to recognize where these drugs are coming from.  There are dozens of countries that produce illegal drugs.  The United States primarily imports most of its drugs from Mexico, the Caribbean, and South America.  Generally speaking the most popular countries appear to be Mexico, Dominican Republic, Bolivia, Peru, Colombia, and Costa Rica.  In these countries the drugs are mass-produced; these drugs range from marijuana to cocaine (Fuentes, Joseph R. & Kelly, Robert J. (1999). 

      The habit-forming dependency of the popular illicit drugs, such as cocaine and heroin is fundamental to the relative elasticity of drug consumerism in the United States.  Demand generates supply and as demand grows, supply increases despite the successful disruption of trafficking patterns.  The structure of demand and supply is not unique to the drug business.  The demand for drugs in the U.S. has contributed to the growth of the cocaine business in Colombia, Peru, and Bolivia.  The rise in production not only increases access to new supply, but also expands the customers’ access to new supply sources, thereby lowering search costs in the market place and causing prices to fall.  As demand increases, the drug prices rise and businesses become more profitable as trafficking organizations seek to wring out as much profit as the market will bear. 

     Transporting illegal drugs was once an easy process, but because of the laws passed, and the severity of U.S. drug trafficking policy, transporting drugs has become a clever, intelligent process that takes incredible amounts of planning and precise techniques.  At first people just transported drugs with cars, trucks, or other simple modes of transportation, but things became very complicated and the risks became more apparent.  Moving thousands of pounds of drugs over territorial borders and through customs agents is not that simple.  Illegal Drugs are moved in a variety of ways. It was discovered that an underground tunnel in San Diego, California was one way of transporting illegal drugs into the United States from Mexico.

      The conventional flying or driving illegal drugs to their destination is still used; it’s just harder to accomplish.  Transporting drugs has become a very costly, dangerous process.

      Then the United States decided to take another approach, the government attempted to attack the problem where it originated.  This is where Plan Colombia was derived.  We can’t rely on Colombia to stop the production of illegal drugs, because they don’t really want to stop unless they can find some type of substitution that will generate as much profit as the production of illegal drugs.  Consequently we can’t rely on these countries or their armed forces to stop the problem. Therefore we invest billions of dollars in trying to train the Colombian military to stop these internal problems.  The United States Congress authorized the spending of 1.3 billion dollars for Plan Colombia as the latest front in the U.S. drug war.  About 35% of that amount is for anti-drug operations in Peru, Bolivia, and Ecuador.  Colombia’s portion is mostly military aid: 642 million for sixty Black hawk and Huey attack helicopters, and up to 500 US military advisors, and 300 civilian personnel to train three counter-narcotics battalions of Colombia’s soldiers.  The remaining 218 million is for alternative development, assistance for displaced persons, and human rights and judicial reform.  This is an example of how the United States deals with this problem [(Watson, Cynthia A. (1990, 1991) (Morales, Waltraud, Queise. (1992) (Hayes, M.D.; Foreign  (1988,1989)]. 

  There are several answers to the question of why drug trafficking is such a problem.  Drug Trafficking is a major concern because it deals with not only the people of the United States, but with people of other countries.  Drug Trafficking is continuous problem because if allowed it promotes the use of drugs, and drugs are not good for anyone. Drug Trafficking and drugs are still a problem for the United States for the simple reason that we can not completely stop the use of illegal drugs.  There will always be a way for people and drug traffickers to smuggle drugs in and out of the United States and what keeps drug trafficking going is that there will always be people who want to do drugs.  The best thing the people of the United States can do to stop the use of drugs, is to strike the problem at the root which is people themselves. From there we can educate our society as a whole on the problems of drugs, why they aren’t good for us, and the reason’s why they are illegal.  Drug Trafficking is a never ending battle, but as long as the people of the United States stay strong, and resist the use of illegal drugs, then we will be one step closer to resolving the drug trafficking issue, because change comes from within...