Tuesday, October 30, 2012

Drug Legalization? The FARC Should be Careful What They Wish For

The risks of the illegal drug industry:
An alleged narcotrafficker being escorted
to detention.
During the preliminaries to the FARC-government peace talks, the guerrillas have expressed support for legalizing drugs - a position also favored by some in Colombia's government.

And the idea is a good one for multiple reasons - but probably not for the guerrillas.

The guerrilla argue that legalizing drugs would reduce their profit margins and make trafficking less desireable. That's true - but only partially.

Another price to be paid by the illegal-drugs
industry:co Drug-related killings in Monterrey, Mexico. 
An ounce of Colombian cocaine or heroin - much of which is controlled by the FARC - sold on the streets of New York or London does produce huge profits compared to legal products such as coffee or flowers.

But that huge financial difference is balanced by the great costs which legal products don't carry: The drug cargoes run big risks of being discovered and confisticated; drug traffickers themselves are often arrested and imprisoned by authorities; and drug traffickers know they might be attacked and killed by police or rivals in the drug trade. Drug traffickers, like all good businessmen, figure in those business costs.

FARC guerrillas, who make much of their
income from the illegal drugs trade.
Are they ready to change into business suits?
Legalizing drugs wouldn't cut their demand, just as the demand for alcohol didn't dry up after Prohibition ended in the United States. In fact, with risks and social stigma reduced, demand could very well grow. And, since drug traffickers would no longer carry costs such as violence and confistication, prices would drop. That WOULD slash the huge profits - but, then, traffickers would no longer have to worry about prison or violent death, either.

Of course, the legalized drug industry would have to pay a substantial new cost: taxes. (Which is why decriminalization would benefit the Colombian state: More revenue for the government and less for criminal groups. That sounds like a good deal to me.)
The new style legalized drug industry?
Business suits and tax payments.

Instead of disappearing, a new class of businesspeople would take over the drug trade. The high-risk, live-fast-die-young personality types would be replaced by powerpoint-wielding men and women calculating quarterly profit margins and depreciation rates.

And those don't sound like the FARC guerrillas.

By Mike Ceaser, of Bogotá Bike Tours

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