What Sessions Doesn’t Get: Narcotics Trafficking Is a Market

Narcotics Trafficking


U.S. Attorney General Jeff Sessions speaks about organized gang violence at the Department of Justice, April 18, 2016 in Washington, D.C. Sessions spoke during a meeting of the Attorney General’s Organized Crime Council and Organized Crime Drug Enforcement Task Forces. (Photo by Mark Wilson/Getty Images)

From the moment he was named Attorney General, Jeff Sessions has signaled his intent to re-start the War on Drugs, using massive federal resources to imprison narcotics traffickers for long terms. His May 10 memo to prosecutors directing them to charge crimes and enhancements based on the harshest potential sentence was simply the formal document declaring that mission.

Sessions’ plans ignore one crucial thing: that unlike most crimes, narcotics trafficking works within a market, ruled by the laws of economics. That bare fact was the undoing of the last War on Drugs, where a trillion dollars of taxpayers’ money was spent on a fruitless effort. You can win a war against people. You can’t win a war against a market, which adjusts to disruptions in supply and recovers. You can pluck out a drug dealer, or ten, or a hundred, or a thousand, but so long as demand is constant the market will react and another one or ten or hundred or thousand drug dealers will appear. Therein lies the ultimate tragedy of the War on Drugs: imprisoning a drug dealer almost never stops people from getting drugs. We have given up freedom and treasure without helping anyone very much.

Sessions’ plans ignore one crucial thing: that unlike most crimes, narcotics trafficking works within a market, ruled by the laws of economics.

We are, it seems, a nation of stoners. It is hard to overstate the desire Americans have for drugs, and it is this giant balloon of demand that defines any discussion of narcotics. Even after decades of massive interdiction efforts, Americans make up 5% of the world’s population, but we consume about 25%of the world’s illegal narcotics (and 80% of the world’s prescription opioids). According to the RAND Corporation, in 2010 Americans spent about $100 billion on just four drugs (marijuana, cocaine, heroin and methamphetamine), dwarfing the $10.5 billion we spent on movie tickets that year. The World Health Organization found us to have the highest illegal drug use among nations surveyed, and even though we view Amsterdam as a haven for pot, American adults have tried marijuana at a much higher rate (42%) than the Dutch (20%). So long as that demand exists, the war on drugs will rest on myths—very expensive ones.

The most dangerous of those myths is that the War on Drugs can be won, presumably through the arrest of drug dealers. Sessions’ efforts build on  predecessors including President George H.W. Bush, who promised the country “Take my word for it. This scourge will stop.” It didn’t, despite an explosion of spending.

The Reagan/Bush/Sessions goal of ending the use of narcotics through government interdiction of supply is futile because that’s just not how markets work. If there is demand, supply will find a way to meet that demand, usually through a temporary increase in price which draws in new sellers. That means that even effective interdiction of narcotics won’t “end” the use of narcotics; it just means that the price will go up for illegal drugs, at least temporarily. You can no sooner stop supply from meeting an insatiable demand than you can stop the ocean from overtaking a child’s sandcastle on the beach. The water will go where it will, eroding what stands in its way.

A second myth is that incarcerating drug dealers will be effective interdiction, even towards the limited goal of temporarily increasing the price of drugs. In 2010, I gave a talk to a Republican group in Dallas. Even though I was supposedly the expert on narcotics policy, a member of the audience made a point that changed my world. “You’re never going to shut down a business,” he said, adjusting his cowboy hat, “by getting after the wage labor.” I asked the people in the room—they were predominately business people—how you would shut down a business. Their answer was unanimous: you have to go after cash flow and credit to really make a business fail. So long as there is cash flow or credit then product can be replaced, new labor hired, and new profits made. But consider what the War on Drugs does: It sweeps up labor and incarcerates it, forfeits profits and seizes product. What it doesn’t do in a systemic way is go after the cash flow or credit used by drug dealers. We could do that, of course, and we should. It would be better than re-stocking America’s prisons.

Sessions’ return to an emphasis on mandatory minimum sentences sends us in the other direction, of course. Because the thresholds for those mandatory minimums are ridiculously low, they create incentives for agents to go after easily-caught low-level dealers who are then treated like kingpins. For example, imagine a defendant with two prior convictions for street-corner marijuana sales. If he is caught in even a small role in a conspiracy selling just 50 grams of methamphetamine, the mandatory sentence is life in prison without parole. Spending over a million taxpayer dollars to incarcerate that 25-year-old for life is not only a waste, it is a mindless one. The market will ensure that no one is denied methamphetamine so long as they pay for it.

There is a way, too, that the Sessions plan and its incentive to go after small timers falsely defined as kingpins could make narcotics cartels even stronger. Several years ago in January, two colleagues and I visited Gunflint Lake in northern Minnesota. We walked out on the ice to watch a herd of deer when we heard a distinctive howl. A pack of wolves were dashing over the frozen lake towards the deer, who turned and fled. The wolves got to the slowest deer first and took it down in a furious and bloody attack. That made the herd of deer stronger, of course; that’s evolution at work. In the same way, by using mandatory minimums to take down the easily caught narcotics traffickers, we make those who remain to fulfill demand even stronger. And make no mistake—narcotics businesses do evolve. One example is chillingly addressed in Sam Quinones’ book Dreamland, which describes how traffickers from a small town in Mexico took over the heroin trade while avoiding detection in a series of American cities by using better marketing and customer service rather than guns.

Sessions asserts that drugs bring violence. At times—particularly with the crack epidemic—that has been true. However, there is no evidence that violence today in cities like Chicago are driven by drug markets. Moreover, the tactics Sessions supports have not diminished demand for narcotics in the U.S., and it is that demand which guarantees we will continue to have drug trafficking. Demand trumps everything in the end. I hoped that a businessman-president would see this and act creatively, but instead an unimaginative DOJ is returning to form.

Jeff Sessions and the hard-liners at the DOJ can change the rules about charging drug crimes and enforcing mandatory minimum sentences. What they can’t do is change the rules of economics. When they pretend that they can, we will all bear the cost in tax money wasted, freedoms lost and lives ruined.

Mark Osler
Forbes

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