What the Drug Trade May Teach About Economics

Every since the days when Ronald Reagan decided to give up selling Borax I have heard a lot about encouraging the supply side of the economy. Part of the theory it seems is that we should make it as easy as possible for those who make goods and services. Taxes for these people should be low and hoops should be wide. If we do all this the economy will prosper and even the lowest of the low will benefit.  To some extent this plan has been followed at least at the federal level.  Today taxes on the higher tax brackets are much lower than they were in the 1950's and 1960's.  How much this has contributed to general prosperity isn't all that obvious to me at least.  It does seem to have succeeded in making the rich much richer than they used to be.  Which may have been the real plan all-along.

During this time one group of suppliers has been left out of the party.  Still it appears that they have done well anyway.  The suppliers of illegal drugs have received no encouragement from the government. Aside from the help that some suppliers got from the government with selling drugs to help raise money for Reagan's war against the Contras, the government has usually been very unhelpful to illegal drug suppliers.   And not only has the government not been helpful to this group of suppliers they have actively been fighting a war against them for decades.  Prisons in the US are bulging with former employees of the illegal drug enterprise. 

Still despite the best efforts of our government to ruin their business, the sellers of illegal drugs appear to be thriving.  They are pulling in enough cash to have destabilized and even gained control of substantial parts of many nations to the south of the US.  And probably in the US they may have more influence than most of us would care to know about. At least the illegal drug industry doesn't seem to need the government to get out of it way to thrive.  They have thrived in spite of the government spending billions and billions and then more billions to get in their way. 

And the key to the sellers of illegal drugs seems to be demand.  There are a lot of people out there with cash in hand wanting to buy what they have.  Because there is money to be made there is always someone who will step up to give people what they want.  One drug seller goes down and another steps in.  Such is the power of demand. 

So maybe we ought to rethink this idea of having to cuddle the "productive class".  It looks like if there is a demand for a product or service then someone will make it.  It may not be the ones who are currently doing so however if the demand remains someone will work to satisfy it.  So maybe the next time you hear someone whine about the government killing their business you should point to the example of the enterprising sellers of illegal drugs.  They get along okay while having the government interfere with their business more than the typical businessperson would envision in his worst nightmare.

So this is my first opinion post here. My hope is to put out some ideas as they pop into my head that seem to me to be outside the area where our minds often go.