Brought to you, surprisingly enough, by the New York Times, in an article describing how the crackdown on legal pseudoephedrine-containing medications has changed the black market for methamphetamine. One of the government’s hapless drug war strategies has been attacking drugs from the supply side, trying to cut off the sources (when they’re not attacking the demand side with brilliant stuff like this). Of course, prohibition doesn’t eliminate the trade, but only drives it underground, encouraging risky home “cooking” with potentially dangerous chemicals. Trying to choke off the supply of pseudoephedrine used in home cooking (which is depicted as a great success) has resulted in a decrease in home cooked meth. Instead of decreasing the total supply, however, the tactic has simply resulted in home cooked meth being replaced by meth smuggled in from Mexico. The imported drug is more potent than the homegrown American variety (more potent product means more money can be made from smuggling smaller quantities; more profit for less risk), and potentially easier to overdose on. The increase in product potency brought about by drug prohibition has been seen before, a point made by Mark Thornton in his lecture on the economics of prohibition at the last Mises University. As the more expensive Mexican meth replaces the American made stuff, users switch from cooking to buying, committing crimes for drug money. And so, we have inelasticity of demand for an addictive substance, along with product substitution, and the market just keeps humming along. Wonder when the government will notice?
Source link: http://archive.mises.org/4593/lessons-in-how-markets-work/
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{ 4 comments }
Yet another industry outsourced…
Last month all 5 of us in the family were sick. I was at WalMart and tried to buy several OTC medications for the 5 of us. The manager came over and refused to let us buy more than a couple, very annoying. ;-(
http://amateureconblog.blogspot.com/
Well, I remember when the feds started trying to stop the flow of cocaine, users switched to home-grown meth. Again, altering the supply will do nothing but make the loopheads switch to something else.
I suspect that home cooked meth cuts into heroin and coke sales so our leaders have taken over meth production and sales. Prohabition gave the mobs (and the Democrats) control over the cities.
The only difference between the “war on drugs” and Prohibition is that the beat cops are not getting their cut of the profits. The police agencies are getting their share. Asset confiscation has replaced speed traps as a source of revenue.
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