i'm walking away

He doesn't say that, because it's common sense when you can lose 90% of your product and still be profitable that means that your profits  to cost ratio > 10 to 1.

Which is specifically what he says.

It just sounds sensationalistic to you because you don't want to believe it. 

So he never explains how they could make it cheaper.  When i give an explanation i'm full of shit. When you give an explanation it's common sense. That's real pompous.

I'm not giving an explination though...  I'm saying exactly what he's saying.  That they make enough profit on one item to cover ten.

They can make it cheaper by lowering the price... 

Cocaine costs less to produce and transport to the US then the price they sell it for.   The entire cost of getting it to the USA is less then 10% of the cost they sell it for once it crosses the border.  This isn't even counting cocaine being cut, because people who buy cocaine pay different prices for different purities.

Simplfied example, it costs a kid about 3 cents to make a glass of lemonaide at their lemonaide stand and  penny per glass to get their sister to sell it .   They sell that Leonaide for 50 cents.   They could lower their price all the way to 5 cents if they want to and still make  a profit.

They don't need to really do anything to it to do so.  It's just because demand is so high they can charge a higher price.   Cocaine has a pretty high cost everywhere in the supply chain, because it's in high demand.   

Why arrest people for taking jobs when it could be a huge taxable fund?

If the war on drugs ended, there would be many benefits. Crime would fall, the prison population would fall significantly. Drug barons would have to find something else to make money from (drugs are extremely profitable to them), this would make Latin America and alot of Asia safer. These drugs would likely be safer due to a regulated market meaning truely addicting substances in these drugs would be reduced. And surely, it's better to allow people to take these things but make it well aware of the consequences. It shouldn't be a imprisonable offence because taking drugs isn't a crime neither is growing them. Although they may be risks with legalizing all drugs, a couple countries (eg Denmark and Holland) have proven that it's better for society if the state lets people take them like how people drink or smoke.

The first US presidents were fine even though they took drugs and even grew them. 

If i didn't believe there was a bunch of middlemen involved, or if I didn't believe their very involvement increased the final price; I would happily admit i'm wrong. That hella pissed me off yesterday that you treated me like a stuborn mule that makes up lies! But since you can neither refute my middleman claim, nor refrain from insulting my integrity in the claim. And because i am way too obsessive to walk away for long. I could try a different approach, perhaps one you can understand. The supply and demand model.  After all, prices don't automagically drop 90% with the wave of a wand. There would need to be an explanation of how it happened.

Understanding the Demand for Illegal Drugs (2010)

Understanding the Demand for Illegal Drugs (2010) The supply-and-demand model provides the basic economic framework for drug policy. Efforts to provide economic models of illegal markets go back at least four decades (e.g., Becker, 1968), but the standard economic model has key limitations in understanding illegal drug markets. The implicit features of many legal markets in modern economies—for example, quality certification and available legal mechanisms to guard against fraud—are typically absent from illegal drug markets. Moreover, many key variables are difficult to observe. Illegal drug markets are also characterized by complex features, such as addiction (which means responses to increases and decreases in prices may differ) and high search costs (so that consumers must invest time in finding information about the product) that are sometimes found in legal markets but that are difficult to incorporate in simple models.

Despite these limitations, the basic supply-and-demand model provides a specific language to explore causal pathways of proposed public policies. It provides a framework to interpret available data on observed prices and quantities of illegal substances in particular markets. It focuses attention on basic parameters—the sensitivity of supply and demand to prevailing prices, production technologies, and costs—that are influenced by public policy. Finally, these simple models provide points of departure for richer theoretical and empirical investigations of particular markets. Figure 2-1 presents a very basic model to illustrate the impact of a supply-side law enforcement intervention.

FIGURE 2-1 Impact of a supply-side enforcement with a steep demand curve.

The market demand curve D1 slopes downward: at higher prices, users in the aggregate purchase a lower quantity of the drug in question. The market demand curve reflects two types of responses to higher prices: some drug users cut back on their consumption, while others may drop out of the market and become nonusers (at least of the drug in question). As is discussed below, addiction raises the possibility of asymmetry in that lower prices may increase participation; higher prices may not reduce participation in the short run.

The market supply curve S1 slopes upward: at higher prices, the supply network is willing to provide more drugs to the market. The market supply curve again reflects two types of responses to higher prices: some current suppliers expand the size of their drug-dealing business, and there may also be new entrants who provide new sources of supply.

A supply-side intervention—such as increased border interdiction or more intensive police actions against street dealers—causes the market supply curve to shift up, or alternatively to the left, to curve S2. The vertical distance between S1 and S2 may be interpreted as the increase in unit production and distribution costs induced by supply-side interventions.

This shift captures the idea that to compensate for the extra risks and costs created by the policy intervention, suppliers require a higher price to bring any given quantity of drugs to the market. How much the supply curve shifts depends on the effectiveness of the enforcement efforts and suppliers’ ability to respond to those efforts. Suppose, for example, that police increase arrests of street-level dealers. How much this raises unit production costs reflects how much drug-selling organizations have to raise wages to compensate dealers for the additional risk, on the assumption that the dealers can estimate that rise. It also reflects how effectively these organizations can shift their production and distribution systems in response to these enforcement shifts. If sellers can shift sales activities indoors or otherwise avoid the increased enforcement, the shift from S1 to S2 will be small.

The standard model assumes that the market price adjusts until an equilibrium is reached at which the quantity demanded equals the quantity supplied. The original equilibrium in Figure 2-1 is E1: Q1, P1. After the supply-side intervention, a new equilibrium is reached, E2: Q2, P2. This new equilibrium reflects an interaction of both supply and demand factors. The relative slopes of these curves determine the extent that increased production costs are borne by consumers in the form of higher prices. The supply-and-demand model yields the fundamental insight that a supply-side intervention on the model of the “war on drugs” should produce higher drug prices. At the new drug market equilibrium E2, the market price of the drug is higher (P2 > P1), and the quantity of drugs purchased and consumed is lower (Q2 < Q1).

Summary: If laws allowed traffickers to distribute legally then the lowered risk would translate to lowered prices. Prices will always reflect supply-side intervention.

A) I didn't say there weren't middlemen what you aren't understanding is he is considering middlemen in their cost. INCLUDING middle men, that same ounce, uncut has a 90% profit margin. That's just how cheap cocaine is. He's using the entire supply chain system as a reference.


B) Since I know a bit about economics, and how to read research articles... I can point out, that's not what that says. Your summary is incorrect.

What it is saying is is talking about how stricter law enforcement can temporarily increase the price of cocaine in the short term... (and all black markets) because a stricter war on drugs leads to seized drugs... and because their isn't any other market alternative to push down prices since most people don't know 5-10 drug dealers like it was Wal-mart vs K-mart... and even if they did, they probably all get their stuff from the same distributor.


The same thing was said in the article I sourced to you.   In general, it and most of the article basically back up my points.

Of course, I would point out that this is a theoretical model not based on any research or knowledge in the drug trade... and also point out well... basically the sentence you stopped at and the next few pages. I'm not sure if you just stopped reading or didn't think I would bother to read the source. I'm going to guess the former rather than the latter.



"For example, when drug prices have remained constant or have fallen during a period of increased antidrug efforts, many observers conclude that the war on drugs has failed (e.g., Walsh, 2008). In essence, these observers view the market price of a drug as a sufficient statistic for, or at least a useful indicator of, conditions in the drug market."

In otherwords, those Supply side factors haven't effected the price. Then he goes on to argue that instead it's pretty much just effected demand. As the price goes up, users drop out, lowering demand, causing price to stay steady.

Furthermore, if you keep reading, you'll note where they point out that drug users are actually pretty sensitive to pricing on average, In otherwords, if prices were lower, there would be a lot more people buying.

"Notably, the different theoretical economic models of addiction yield the same prediction: drug users will respond to higher prices, so the market demand curve slopes downward. Many of these models also suggest that users (and potential users) are more responsive to long-standing or permanent price changes than they are to recent or transient changes in price."

Also, not by responsive they don't mean they're more likely to agree to them, but are more aggressive and negative towards price changes.

"Analyses of legal addictive substances provide two broad insights that likely apply to illegal substances. First, the demand curves of new and low-income consumers are more price elastic than other consumers. Second, as noted above, consumers respond more aggressively to permanent price changes than they do to transient fluctuations. Elasticity shows up in a related analytic literature that examines the efficiency consequences of drug control policies."


In otherwords? As price were to lower, demand would increase, because there are tons of people who want cheaper drugs, and price is what matters most to them.

You just can't grasp that the price isn't going to magically drop because of some producer wants it too.  It's effected by supply, demand, and supply-side intervention.  If not why is cocaine $300 a gram in Australia?  Simply demand? Ridiculousness.

Let them fuck themselves up. If they fail to listen and choose to use the drug anyways that is their fault. Why do we care so much about the choices others make when it has no direct impact on us. Portugal removed all criminal charges for use of any drug. Including heroin. Drug rates did not increase. In fact in a lot of areas they've managed to decrease. HIV rates as well decreased from less needle sharing.

Nothing obamas backers already got millions of dollars from investing in the euro.