The economics of drugs: marijuana, cocaine, meth – supply vs demand is twisted!
Now that's a nice cloud of marijuana smoke. Credit: Pam Templeton
The Government Action Plan on Methamphetamine is working by at least one measure – price. A gram of P, according to one Auckland drug dealer, now costs around $800, whereas a year ago the same amount set users back about $300-$400.
The doubling in price tells a supply side-story. Prime Minister John Key launched the plan in early October and, among other measures designed to restrict supply, made the important precursor drug, pseudoephedrine, prescription-only.
Also, in the two months to early December, Customs intercepted a total of 230kg of pseudoephedrine at the border. When commodities become scarce, consumer demand drives the price up.
The government is, says Key, winning "the fight against P".
But if "we" are winning the fight, what will success entail? An exhaustive account of the global cocaine trade (The Candy Machine, How Cocaine Took Over the World, by Tom Feiling) suggests all of the efforts by government and its agencies will make not a jot of difference and may even generate a worse social outcome.
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