Blaming Colombia

A Colombian coca leaf farmer. Guilty for cocaine
consumption boom? 

This not-so-recent Washington Post article about the boom in Colombian coca leaf/cocaine production places the blame on Colombia for the reported big increase in U.S. cocaine consumption.

'U.S. officials say the flood of cheap Colombian product is so large that it has quietly created its own demand,' says the Post.

At first glance, that seems to make sense: More supply generally means lower prices and higher sales.

But many cocaine consumers are addicts, making the market somewhat inelastic. More importantly, according to Tom Wainwright, a former correspondent in Mexico for The Economist who wrote a recent book about narcotics economics called 'Narconomics: How to Run a Drug Cartel', around 2016 a ton of coca leaves that sold for $500 in Colombia retailed for $150,000 on a U.S. street.

Causing U.S. consumption? A Colombian coca field. 

That's a 30,000% mark-up - which is pretty good.

So, virtually all of cocaine's final price comes from the trouble, expense and danger of shipping the stuff across oceans, dodging bullets, hiding it in secret compartments, bribing officials, and paying people to risk prison. The farming cost is such an insignificant proportion that even if Colombian cocalers gave their leaves away for free, it wouldn't make a noticeable difference to buyers in New York or Los Angeles.

Colombian production hasn't caused U.S. consumption to rise. Internal U.S. factors, such as a strong economy, social stresses, unemployment and others are to blame for that.

And that is why all the billions of dollars and innumerable lives expended in the war on drugs have been for almost nothing.

By Mike Ceaser, of Bogotá Bike Tours