This Is a Bust: The futility of drug interdiction - drug industry economics will always foil war on drugs

National Review, July 9, 2001 by Richard Lowry

The drug war works, at least in Bolivia. Between 1995 and 2000, the amount of land in Bolivia with coca cultivated on it declined from almost 50,000 hectares to fewer than 20,000. In Peru, during the same period, land under cultivation for coca declined from 115,000 hectares to roughly 30,000. It was a nice winning streak for the American policy of coca eradication in the Andes, except for the minor matter of Colombia, where the coca crop doubled-keeping the level of production in the Andes approximately the same as it had been before those victories in Bolivia and Peru.

In the drug war, the victories never end, because they never last. Last year's annual report from the Office of National Drug Control Policy noted progress in the Caribbean: A "decline in the cocaine trafficking in Jamaica, the Bahamas, and Cuba followed the execution of several joint interdiction operations in the area." But wait: "There were . . . increases in overall drug trafficking in Haiti, the Dominican Republic, and Puerto Rico as well as smuggling through fishing vessels in the Eastern Pacific." It's a wonder that drug warriors make even this "one- step forward, one-step back" progress. The report notes, matter-of- factly: "Drugs coming to the United States from South America pass through a six million square-mile transit zone roughly the size of the continental United States." Oh, is that all?

As a Council on Foreign Relations report on drug-eradication and - interdiction policies puts it, "For twenty years, these programs have done little more than rearrange the map of drug production and trafficking." There is more rearranging yet to come. Bush drug-czar nominee John Walters is, in drug-war terms, a die-hard supply-sider, convinced that more aerial spraying and harsher measures against traffickers will squeeze the drug supply in America, force up prices, and prompt addicts to drop their habit. Together with his mentor and czarist predecessor Bill Bennett, Walters champions a kind of drug-war Brezhnev doctrine in which no drug-policy excess-the tougher penalty for crack compared with powder cocaine, mandatory-minimum sentencing laws, the ban on the medicinal use of marijuana-is ever to be rolled back. The current American escalation in the Andes, pushing the drug war further toward a real shooting proposition, is just another step in this hard-line logic.

The $1.3 billion Plan Colombia, originally funded by the Clinton administration and now being refashioned into a broader, even more expensive Andes-wide initiative by the Bush administration, will throw a massive amount of military aid, including Black Hawk helicopters, into the breach in Colombia. It will likely succeed the way so many other drug-war initiatives do-fitfully and temporarily, if it all. To examine the supply-side drug policies in behalf of which American money, materiel, and prestige will be expended in Colombia is to see the free (in this case, black) market working in all its marvelous and appalling ingenuity, frustrating the drug warriors, whose efforts constantly double back on themselves like a cat chasing its tail. In its dishonesty and strategic confusion, Plan Colombia is-to paraphrase Omar Bradley-the wrong war, at the wrong place, at the wrong time, and with the wrong enemy.

The economics of drug production will always bedevil drug warriors. Take efforts to destroy coca leaf through eradication. Such efforts will have little effect on consumption in the U.S., since the price of coca leaf is such a tiny fraction of the street price of cocaine. Expecting eradication to drive up retail drug prices is like increasing the cost of dashboard cupholders in hopes of raising the showroom price of automobiles. "Indeed," University of Maryland drug-policy expert Peter Reuter argues in an article in The Milken Institute Review, "leaf prices have varied enormously over the last decade, while the retail price of cocaine has steadily fallen."

Then, there's the sheer perversity of raising the price of something as a way to discourage its production. As Patrick L. Clawson and Rensselaer W. Lee write in their book The Andean Cocaine Industry, "It is not clear why Washington thinks that a crop reduction program raises the income of Midwestern wheat farmers but lowers the income of Andean coca farmers." Crop eradication also can't be much of an obstacle to the captains of the drug trade, because they have an enormous incentive to pay whatever it takes to keep coca in production, given the enormous retail bonanza awaiting them on U.S. streets (which, of course, is itself a product of the drug war-otherwise, there's no reason heroin, say, would cost more than gold).

This is the nub of the problem: The very illegality of drugs makes the drug business so lucrative that new actors will be drawn to it, no matter what. Imagine, by way of comparison, setting a $100 million lottery prize, then expecting people never to try to buy a ticket. According to a recent RAND study on Colombia, "By one gauge, the 520 metric tons of cocaine that Colombia produced in 1999 could, at an average retail street price in the United States of one hundred dollars a gram (or $100 million per metric ton), have netted as much as $52 billion-more than the gross domestic product of many nations."