Sunday, January 3, 2010

Houston--Hub for Gulf Cartel crime syndicate.

http://www.chron.com/disp/story.mpl/metropolitan/6796067.html#

Ending the War on Drugs would legitimize such groups.  Do we really want to see these cartels on the Fortune 500 list?
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3 comments:

  1. GuyIncognitoJanuary 3, 2010 at 11:37 AM

    1) What I'm arguing is that drugs produced and sold in the US legally are at an inherent price advantage compared to drugs that have to be grown illicitly in Colombia and Afghanistan, smuggled into the US, and sold on the black market. Also, I don't believe demand will increase because I don't believe anybody who really wants to do drugs is scared off by the illegality of it. Anybody who wants it today can get it, so I don't see what changes.

    2) Stuff that people have to assemble is cheaper on import, yes, but I can't imagine it's cheaper when we're talking about agriculture. Especially when the domestic production is legal and the importation of it is illegal.

    3) Even in that case, the legalization of it incentivizes domestic production, which eliminates the need to smuggle it illegally across international borders (and the de facto armies required to do so). In other words, the nastiness that manifests itself in these drug wars is a direct result of the legal status of the product.

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  2. Charles WangJanuary 3, 2010 at 2:55 PM

    1) If drugs were legalized, then they wouldn't be grown illicitly in Columbia and Afghanistan (and if they were, then some other country would allow legal growing). Therefore they would not be smuggled into the U.S. and sold on a black market.

    1a) I personally know of no drug dealers, and I assume the majority of American citizens do not know of any drug dealers. Illegality decreases availability (which is a given because it is reflected in the price). However, if availability became widespread, then little (or adult) Billy could walk into a Wal-Mart, try drugs for fun, and then become addicted. The addictive qualities are the problems with drugs; the random experimentation leads to a permanent consumer. A steady increase in permanent consumers leads to increased demand.

    2) The domestic sugar industry in the U.S. (an agricultural product) is heavily subsidized. Without those subsidies, the U.S. sugar industry would fail because of cheaper imports.

    2a) Drawing a line at illegal importation (which I have never heard of) is untenable. 1) How would you determine whether discovered cocaine has been imported or not. 2) I can't think of another product where use is legal but importation is not. Such laws would seemingly run afoul with WTO/free trade agreements we have as such laws would be seen as protective trade tariffs.

    3) Legalization only incentivizes domestic production when the cost of importation is higher than domestic production. The cost of importation is higher only when there are trade barriers (such as illegality of importation). I believe such barriers would be impossible to hold up under international law once use and production of the drugs were legalized in the U.S. However, assuming, arguendo, that such barriers were legal, I would point out to the influx of Japanese car makers setting up production in the U.S. The people with the real skill and expertise in production and distribution of drugs in the U.S. are the cartels. Legalizing production and use in the U.S. would only have the effect of legitimizing their currently illegal operations.

    I am going to post our original facebook posts here for posterity.

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  3. Charles WangJanuary 3, 2010 at 2:56 PM

    Original posts by Adam and Charles on facebook:

    Adam Bates
    Of course ending the war on drugs would also eliminate the necessity to import those drugs, and there would be no way for the black market drug trade to keep pace with the legal drug trade. The external costs of shipping that stuff into the US would inflate the price to the point of non competition.

    It's only because of the war on drugs that such... See More enterprises can even exist in this country. Where are all the black market cigarette and alcohol cartels?

    I'd like to see the Gulf Cartel compete with Walmart for the price of cocaine.


    Charles Wang
    1) your assume that demand will remain constant as supply increases to therefore reduce prices. I disagree with this assumption and argue that because these drugs are addictive, demand will increase as supply increases thereby keeping prices up.

    1a) One only needs to look at the Opium Wars and the forced legalization of drugs on China to see the effects of legalized drugs on a society.

    2) external costs of shipping is overrated. It is still cheaper to ship and sell a bunch of crap from China than it is to make a lot of things domestically.... See More

    3) There may not be "black market" cartels, but certainly there are "open-market" cartels where only a few players that dominate the market and thus create an oligopoly. I argue that instead of "Wal-Mart type" competition we will see "Philip Morris" type companies (the now legitimized crime syndicates) control the market.

    Finally, I ask that we continue this debate on my blog. I am phasing out such posts on facebook over the course of the next couple of months. We can copy and paste what we have here on there.

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