The Underground Market for Drugs Essay

1686 Words 7 Pages
The underground market for drugs is like any other market economy. Like all other markets, it is governed by the forces of supply and demand. When speaking about these concepts, it is valuable to have a concrete definition to return to. Supply, as defined in “Essentials of Economics” is “The ability and willingness to sell (produce) specific quantities of a good at alternative prices in a given time period, ceteris paribus.” (Schiller, 50). Similarly, demand is “The ability and willingness to buy specific quantities of a good at alternative prices in a given time period, ceteris paribus.” (Schiller, 50).
Regrettably, the demand for drugs is considered to be relatively inelastic (at least in the short term). As a result, an increase in
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Externalities are costs that third parties bear. The negative effect of alcohol is widely acknowledged, reduced inhibitions leading to drunk driving and abuse as well as other negative externalities. Supply of drugs is relatively elastic and an escalation in price will usually cause a large increase in the quantity of narcotics supplied. Several of the factors that affect supply include; government restrictions, seasonal and weather conditions, and the price and availability of factors of production.
With attention to supply and demand, government has two principal courses of action. Harm reduction (through education and information) or fixed, restrictive policies such as custom controls, and tough or extreme sentencing such as Thailand? Employs. Or, yet more policies imposing on freedoms such as no-knock police raids, incarceration, and confiscation of private property. Police has been known to resort to a form of setup and blackmail to gain informants, as neither users, nor dealers consider themselves victims.
All things considered, the key difference between the two approaches is that harm reduction goes after the demand side of the market, while heavy, restrictive policies are targeted towards the supply of illegal drugs. Admittedly, most legislation contains a mix of both approaches, but the focus remains on the supply, and prohibition is the main budgetary element aimed at reducing drug use. Funds directed to drug education tend

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