James Farmelant farmelantj at juno.com
Wed Aug 25 03:31:19 PDT 1999

On Tue, 24 Aug 1999 23:10:36 -0400 (EDT) bhandari at phoenix.Princeton.EDU (Rakesh Bhandari) writes:
>"Street-level drug dealing appears to be less lucrative than is
>As if anybody but them thought it was all those crack head dope
>whose money was being laundered in the New York banks.
>>the actual street-level dealers appear to
>> earn less than the minimum wage throughout most of our sample,
>> in spite of the substantial risks associated with such
>> activities (the annual violent death rate in our sample is
>> 0.07).
>One would imagine that drug addiction, resulting often from poor life
>choices due to racism or little inherited capital of any sort
>cultural, economic), accounts for the willingness of street level
>to accept subminimum wages along with substantial risk. Of course
>these front line dope pushers and hit men are often addicts is not
>something that can be ascertained by an audit of some books--the only
>source of data (other than a whole bunch of Hollywood 'g' movies) they
>to be working with to understand the drug economy.
> At any rate, it's a bit absurd to consider the decisions of the
>people on the drug food chain in terms of some model of rational
>making and then conclude that their decisions reveal the low value
>must put on their lives (otherwise their decisions would not be
>The point is that due to addiction no matter how highly the street
>dope pusher values his own life or much he fears his own death--and
>the low
>value inferred by Levitt is perverse--his addiction compels him to
>in low paying, risky 'work'--including violent hits on rival gangs.
>really needs explaining is why the war on drugs is structured around
>arresting the lowest level drug dealers (themselves often crack heads)
>treating them in a surrealistically draconian manner.
>Yours, Rakesh

I suppose if we were neoclassical economists we would look at the incentives that drive the decisions of police, prosecutors and other public officials. And what do we find? That it is much easier to arrest and prosecute low level dealers than people higher up in the drug trade. The arrests are easily made and since these people have few resources, it is generally easy for prosecutors to arrange plea bargains thus boosting their rates of successful prosecutions. The fact that low level dealers are " a dime a dozen" ensures that there will be plenty more for the cops to arrest and the prosecutors to prosecute. Politicians can use the arrest and prosecution figures to boast about how successful they are in cracking down on drug trafficking even though this las little perceptible impact on drug use or even on the black market prices of illegal drugs.

By the same token, there is little incentive for cops, prosecutors, and other public officials to concentrate their efforts on the higher ups in the drug trade. Even if arrested such people are generally much harder to prosecute. Successful prosecutions of such people require things like witness testimony (which is often hard to get given the power of drug gangs to intimidate), prosecution requires gathering much more evidence, and such people often have the financial resources to resist prosecution. It is much more difficult for prosecutors to get such people to cop a plea. Nor should the factor of corruption be ignored either. Drug trafficking like other widespread forms of black market activity flourishes through the passive or active cooperation of police and other public authorities that are charged with the task of suppression. Successful drug gangs can and do bribe cops and other public officials to look the other way. Neoclassical economists like to point out that the suppression of desired goods and services as illegal, leads to black markets in these goods and this in turn encourages the corruption of the public authorities charged with suppressing them. Drug trafficking is no exception.

Not surprisingly many leading neoclassical economists including both liberals and conservatives have come out for the decriminalization if not legalization of drugs.

Jim F.

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