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How to Starve the Beast: Legalize It!

June 7, 2013

Throughout the nineteenth century heroin and cocaine were ingredients used in a wide array of products all over the world, the most popular one being the soft drink, Coca-Cola. A legal pharmaceutical industry utilizing heroin and cocaine grew only to later decline sharply because of government intervention in response to the outcry to the growing heroin addiction across the globe. And this ladies and gentleman is where the problem starts, the criminalization of a product like so many products today that have been made illegal with some of this ridiculous legislation applying today to products such as raw milk, in other words milk directly from a farm to willing customers. Criminalizing a product never solves the problem as long as there is a market for that product and nature abhors a vacuum so where there is a demand there will be someone to supply it. No longer able to procure a regular dosage of drugs from pharmacy or doctor, North American addicts were forced to turn to illegal street dealers. After the United States prohibited the legal sale of narcotics in the 1920s, criminal syndicates emerged in many cities to met the illicit demand for heroin and cocaine. Criminalizing the use of alcohol also lead to the rise of organized crime in North America, growing from localized gangs into nationwide syndicates with substantial economic and political influence in the cities of the industrial Midwest and Northeast. And why did this happen? Because the United States government passed legislation criminalizing a product that was in high demand. So what could have been done? Well, I am not the best one to go to for these answers but an option could have been to inform the public, to let them know the dangers of the continued use of these products similar to what cigarette companies do by placing warning labels on their products. Prohibition proved to be a failure and it was repealed in 1933, but Washington politicians and the public at large have been very hard headed in learning the lessons of Prohibition when it comes to narcotics and their sales continue to be illegal making the illicit heroin and cocaine traffic the most constant source of income for organized crime in the world. We could all end that today by urging our representatives to repeal laws banning cocaine, heroin and marijuana.

Think about this, for 150 years opium had operated as a normal commodity, expanding into a global trade that linked the highland poppy growers of Asia with urban consumers in Europe and the Americas. In the seventy years that followed Prohibition in the 1920s, narcotics have peculiar politics while still retaining many attributes as ordinary commodities. Despite prohibition, the illicit heroin industry still united urban addicts with highland opium growers through an informal alliance of international smugglers and domestic distributors. Instead of moving through the normal arteries of commerce like they used to, the global drug trade has shifted the illicit networks that link the opium and coca highlands of the Third World with the cities of the First World and with it the bloodshed through the violence of these criminal syndicates which includes governments throughout the Americas including the United States.

The global prohibition of opium and coca sales did not change the law of supply and demand, it is not stronger than the free market. The cultivation of marijuana, opium and coca were the most lucrative crops that poor peasants in the Andes had in order to lead a decent quality of life. These people were not looking to hurt anybody, they were engaging in commerce. The hurt and pain was caused the day governments made the free trade of these products illegal. Anytime you make a product illegal you open the door to a black market where the underworlds worst kind take over the supply as the demand never went away just because the product became illegal. The highland growing of coca plants in the Andes continued and also created support services such as export and finance through Medellin and Cali, Colombia; money laundering through Panama City; and smuggling through the Bahamas and other island states.

Since the highland drug farmers require credit and markets to finance each new crop, a major expansion of drug production has three requirements–finance, logistics, and politics. Logistics and politics that involved the CIA and Pakistan’s Inter Service Intelligence when it came to opium production in the region of Afghanistan and for finance there was the services of Pakistani banks, just as the simultaneous expansion of the Colombian cocaine trade required capital from illicit financiers, the loose protection of the covert Contra war, and the illegal services of banks based in Caribbean free ports such as Panama City.

When are we going to learn that the prohibition of narcotics has contributed to the growth of modern organized crime? It is not nor ever has been the role of government to control personal behavior. No government has the right to tell you that you cant purchase a product because you may misuse it. If somebody is libel, they have recourse in the courts. The prohibition of personal vice, narcotics included, simply transferred these trades from legitimate merchants to entrepreneurs in vice and violence throughout the world and in government.

In all free markets investors are concerned about the level of risk and since the production of opium and coca are large, capital-intensive industries, investors seek to minimize risk by seeking political protection. The way they did this was by developing allies in government and intelligence agencies such as the CIA. For a product that was made illicit thanks to government intervention, the only way to move it out of the mountains and into global markets would be to seek the support from national and international police and intelligence organizations. I will offer some examples below.

 

In Hong Kong during the 1970s, corrupt senior police worked closely with the syndicates to regulate the colony’s heroin traffic, taking a major share of the profits and using the law to crush any competition. In New York during the 1960s, the regional office of the Bureau of Narcotics and Dangerous Drugs achieved a similar symbiosis with a Mafia drug syndicate, accepting regular bribes to arrest only those dealers nominated by the syndicate. In Nationalist China during World War II, the regime’s most powerful intelligence agency was allied with the Green Gang, a syndicate that controlled the opium trade along the Yangtze Valley. Similarly, in postwar France successive Gaullist governments worked with Marseille’s Corsican milieu to fight an underground war against military terrorists. Most important, during the cold war the U.S. Central Intelligence Agency formed alliances with drug syndicates that have had a significant impact on the global heroin traffic.

We could all end this today if we just educated ourselves on how the free markets work and how making a product illegal only creates a black market where alliances are formed between intelligence agencies of various governments and criminal syndicates. I highlight this point because while many of us know of the violence perpetrated by Mafioso drug syndicates, we often forget about the violence perpetrated by government intelligence agencies who are also connected to this black market.

For example, when the CIA needed a legion of thugs to break the 1950 Communist dock strike in Marseille, it turned to that city’s Corsican milieu. When the agency attempted to assassinate Cuban leader Fidel Castro in the 1960s, it retained North American Mafia syndicates who could not only kill on contract but ensure confidentiality–something no official U.S. agency, except the CIA itself, could do. Operating in the mountains of Asia, the CIA allied itself with heroin merchants in Laos, Chinese opium dealers in today’s Myanmar (formerly Burma), and rebel opium armies in Afghanistan. Indeed, a brief survey of the international traffic over the past forty years shows that the CIA’s covert alliances have played a significant, albeit inadvertent, role in opening new opium zones for the global drug traffic. At three critical junctures, the late 1940s and the late 1970s, when North America’s heroin supply and addict population seemed to ebb, the CIA’s covert action alliances generated a sudden surge of heroin that soon revived the U.S. drug trade. The same occurred in the third critical juncture during the 1980s via the alliance they had developed with the Somoza government in Nicaragua.

So if you are seriously interested in ending the bloodshed over the drug trade worldwide and I am including the violence on the part of governments and their intelligence agencies, get smart, read your history, learn economics and demand that we legalize it.

 

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From → Economics

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