Via the NYT/AP: U.N. Predicts Rise in Cocaine Prices

A top United Nations anti-drug official predicted cocaine prices in the United States and Europe will rise next year, reflecting the fruits of a six-year, U.S.-funded effort to eradicate drug production in Colombia.

Last year was a record-breaking year in the fight against drugs in Colombia. Authorities destroyed more than 340,000 acres of coca, the plant used to make cocaine; nearly 150 tons of cocaine were seized; and 1,098 clandestine cocaine-making factories were discovered and burned down, according to the Colombian government.

[...]

A rise in cocaine prices would silence critics of U.S. drug policies who point out that despite the notable progress in the expensive fight against drug production in Colombia, the cost for the drug on city streets remains unchanged, a sign there is no shortage.

Somehow I doubt a rise in the price of cocaine will silence the critics.

I, for one, have several questions:

1. Assuming the price does go up significantly, how high will it go? (My guess: not that much, relatively speaking)
2. How long will it stay up? (My guess: not that long–it will down in a few years, tops)
3. Will the price increase lead to diminished consumption–the real issue. (My guess: not substantially)

and

4. How many dollars spent on erradication to make the street price for kilo to go up a dollar? (My guess: far too many).

The real irony is that the likelihood is that if price goes up, it will incentivize the producers to make more, as higher price means higher profits. Hence, one would expect that if price does go up, supply will quickly follow suit as producers attempt to cash in on the increased price.

It is what Bertram, et al. call the “profit paradox”:

These high profits have a paradoxical effect: they provide a steady incentive for drug suppliers to remain in the trade and for new suppliers to enter.

Because the drug war raises profits as it raises prices, the stick of the law enforcement that is intended to discourage suppliers on the black market simultaneously creats a carrot of enormous profits–which encourages suppliers (13).

So, color me skeptical as to the idea that a) this will silence critics, because b) I sincerly doubt it will ultimately mean much in terms of concrete success.

2 Responses to “UN: Cocaine Prices Set to Rise”

1. Bamacrat Says:
   March 15th, 2024 at 1:19 pm

   There will always be production if their is a demand. Keeping dealers off the streets should be the first priority.

2. John Lemon Says:
   March 15th, 2024 at 7:26 pm

   Damnit!