I. The Problem
HUMANKIND has a complex relationship with drug consumption, to say the least. Though the stigma of drug use might suggest otherwise, it is hard to deny that, as long as people have been around, we have sought means of altering our perceptions of reality. The earliest records of alcohol consumption date back as far as 9,000 years, while marijuana consumption can be traced back 2,500 years. In the last few decades, though, the consumption of most narcotics has grown into a significant public health risk.
In 2017, the CDC reported that close to 15,000 people died of heroin overdoses and another 14,500 from cocaine overdoses in the US alone. Looking at methamphetamine, deaths related to the drug nearly doubled in the US from 2015 to 2018, reaching a staggering 13,000. And we cannot ignore the current opioid epidemic, which has caused an estimated 130 deaths a day in the last two years. While it is true that overall drug overdoses in the US decreased in 2019, the total was still a shocking 68,557 deaths—higher than the number of people who died from car accidents in that same year. Plainly speaking, drugs are a problem in our society.
Yet narcotics are still a consumption good, much like the products you find in the local grocery store. They have a common retail price, go through a standard production process, and have a market through which people acquire them. Drugs, like every other commodity, are subject to some basic laws of economics, and only a careful understanding of these rules allows us to craft decent policies to address the health crisis around them. As Tom Wainwright points out in his book Narconomics, economics is the most powerful tool we have to understand the perils of drug trafficking and to address them through strategic interventions.
The first step in solving such a large-scale issue is recognizing its magnitude. The drug industry is a booming market by all possible metrics. In 2011, a report by the United Nations found that organized crime, including drug trafficking, accounted for 1.5% of global GDP. As Latin American countries can attest, entire regions have been restructured to fulfill the global demand for narcotics. And drug trafficking impacts not only the land itself, but the people that live within it. Whether we are talking about coca leaf farmers in Bolivia, meth lab operators in Mexico, or gang members in El Salvador, the story is the same time and time again: the poor are left with few choices but to engage in the drug trade. At times, this occurs through a conscientious choice, with people trying to make money fast, but in other occasions, it is pure economic and social coercion. In summary, drug trafficking affects the lives of millions and it is up to us to respond to the crisis they generate.
With such a complex market comes an interest from world governments to regulate it, and especially in the Americas, much has been done to battle the ever-growing presence of drug trafficking. For the last couple of decades, the region has undergone a violent war against narcotics, but a closer look into these measures shows that investment has failed to generate results. The Americas remain by far the largest drug consumer in the world, and violence has skyrocketed as a result of drug trafficking in Latin America. In 2018 alone, more than 400 people were murdered each day in the region, in large part due to cartel-linked violence. After years of policy debate and millions of dollars spent to fight an international war, all we have done is increase drug consumption and push the world into chaos.
In large part, this failure is the result of a misunderstood market. Ever since cocaine trafficking took off in the 1980s, the majority of policymakers have taken a supply-side approach to fighting drugs. In other words, they figured that the key to eradicating drug consumption was to eliminate the drugs themselves. Such strategies, however, have proven to be very costly and ineffective. How did it all go wrong?
II. The Supply Side Response
The most common approach to battling the drug market is based on simple supply-side economics. If we could eliminate the production of drugs entirely, goes the argument, we could eliminate its consumption and all the problems that come with it. Using this framework, governments around the world have spent millions of dollars trying to destroy drug plantations and laboratories, while also targeting large drug lords in the hopes of dismantling the entire production chain. This approach, however, has yielded mixed results, and it usually takes on three different forms, each with their respective flaws.
First, governments around the world have attempted to target the problem at its root by trying to eliminate the raw materials required to produce narcotics. However, there are many problems with this approach. The drug market is an international enterprise which divides its production across various countries. So if, for example, we wanted to address the production of coca leaf (the main ingredient in cocaine), we would need the support of the three largest producing countries: Colombia, Perú, and Bolivia. But this is harder than it seems: in Bolivia, for example, coca leaf has been consumed by indigenous communities for centuries and is now an important cultural staple. As a result, Bolivia’s government has allowed for limited yet increasing production of coca leaves for their domestic consumption, and even won an exemption to international law which allows its consumption within the country. Now, as one can imagine, farmers who can sell coca leaves for domestic consumption can easily do the same as an illegal export, even profiting more as a result.
But even if South American governments bought into the fight against cocaine, drug cartels would scarcely be affected. For every coca farm that is captured by underfunded authorities, drug lords will have grown a couple more. One cannot simply solve the problem by burning fields and destroying processing facilities. As long as people keep consuming, drug traffickers will find a way to produce.
It did not take long for governments to figure out that attacking production was not enough to deter drug consumption. So they shifted their interest to transportation routes themselves. If we cannot stop the production of cocaine, they thought, we might as well stop it from reaching consumers. Such was the American approach in the mid-1980s, seeking to stop cocaine smugglers from getting their products into the US. At the time, Pablo Escobar’s Medellín Cartel dominated the cocaine market and sneaked most of its drugs through the Caribbean using a sophisticated transportation system involving planes and speed boats. Eventually, the US government managed to dismantle Escobar’s Caribbean routes, but that did little to help. Drug cartels shifted their attention to Mexico and started smuggling narcotics into the US across the southern border. Now that the US has focused its resources on Mexican drug cartels, other criminal organizations have started to rebuild the Caribbean routes. Targeting entry points has only made cartels shift their attention elsewhere.
Given that a focus on raw materials and routes failed to deliver the desired outcomes, governments finally tried to target the cartels themselves. If you cannot stop them from producing and shipping, you can stop the organizations directly—or so they thought. The Mexican War on Drugs is perhaps the most egregious example of these methods, and their striking failure. At its core, the idea was to eliminate drug trafficking by dismantling the largest crime organizations in the country. In practice, this proved to be far from ideal. From 2006 to 2019, this conflict alone caused the death of 250,000 Mexican citizens, making it the most violent conflict in the nation’s recent history. Research has shown that by attacking the largest drug lords, government forces have only split cartels into smaller organizations that fight one another and increase violence overall. To summarize the results: violence begets violence. No matter how it was implemented, the supply-side approach to fighting the drug market was only marginally effective, and often resulted in consequences worse than the problem it attempted to solve.
III. The Demand Side Response
As is now evident, supply side approaches have failed to address the real problem of drug trade: the ever-increasing market. Currently, we spend most of our time and resources looking at how drug lords distribute their products, even though focusing on consumers has proven to be far cheaper and more effective. If we keep on using supply-side strategies, all we will get are high costs and low efficiency. But if we shift our attention to the demand side of the equation, we discover surprisingly effective policies to battle one of humanity’s biggest problems.
The first step, and perhaps the hardest one to take, is to review the stereotypes that currently exist around drug consumption. When the law is not enough, society constructs a negative image designed to deter citizens from engaging in drug use. And since the consumption of most drugs can lead to dangerous side effects in consumers—and even their deaths—it is easier to pack them all together under a single taboo. For years we have fought drugs with shiny posters that say “DON’T DO IT” in bright red letters, or with pictures of those most affected by the crisis under “THIS COULD BE YOU!” Needless to say, these marketing tactics have gotten us nowhere.
We must start by recognizing that not all drugs are equally dangerous. There is a large difference between marijuana, a drug that kills virtually no one from an overdose (although it can do so indirectly in some cases), and methamphetamines, which, as noted earlier, killed over 13,000 people in the US in 2013 alone. But just as some drugs are less harmful than others, it is important to consider that certain means of consumption are safer than others. It is one thing to consume heroin in a dark alley with a syringe borrowed from someone else, and another to do so at a safe injection site with clean needles and a group of volunteers trained to avoid overdoses.
Instead of condemning those dependent on the use of narcotics, we should strive to understand them. Some drug consumers are motivated by curiosity, while in other circumstances it is a matter of peer pressure or economic circumstance. And in all these cases, there are significant steps the state can take to make consumption safer.
For the curious one-time user, the best approach is to provide a safe space for recreational consumption. No matter what we do, people will find a way to get drugs. Unless a city can eliminate the entire supply of narcotics, curious users will find a way to secure narcotics. If, instead, the state provides a safe space where people can consume drugs and obtain information regarding their negative side effects, then we can eliminate most of the unnecessary risks that lead to overdoses. And for those already dependent on a substance, the state should provide a way out. More than judging people who have fallen prey to addiction, we should work to provide adequate treatment, therapy, and rehabilitation when needed. For all users, it is clear that we should stop penalizing consumption and start focusing on how to make it safer.
Now, some might argue that while demand-based approaches seem good in theory, only supply-based strategies have yielded results. But the evidence overwhelmingly supports the success of demand-side approaches. In Switzerland, the government gave extensive support to heroin dependents in the 80s, which in turn reduced overall consumption in the country and lowered crime rates. In Portugal, depenalizing drug consumption and shifting resources from enforcing drug laws to providing adequate healthcare was also extremely effective in lowering consumption. And finally, safer consumption practices, such as developing safe-injection sites for harmful substances, has proven to reduce overdose rates and lead to a drop in consumption. In general, spending resources on healthcare and welfare is far more effective than waging a war against drug lords.
No matter how we look at it, drug trafficking is an economic issue. We must approach it just as we would any other problem involving markets, and strive for the most effective solution. Evidence shows that supply-side economics has done little to nothing to address the problem, while demand-based strategies have yielded the most meaningful results. The only way to end the war on drugs is to fight it together—not with guns and bullets, but with healthcare and empathy.
Jose Luis Sabau
Stanford Sphere 