Tuesday, June 9, 2009

More on Guatemala

Although it makes me nervous to rely on a single popular press to pronounce that something striking is happening, this article in the LA Times suggests that the Mexican cartels are moving south into Guatemala, or maybe Guatemalans are moving into the gap left by the Mexican narco-traffickers.

Although I didn't predict it, this is predictable, at least under the economic theory of illicit drug trafficking.

When supply goes down and demand doesn't, prices go up. This creates new incentives for drug production and shipment (you can make more money that way, because prices are higher) and the end shot is the kind of violent conflict that makes Al Capone look like a syphilis-infected teddy bear.

Given that we have no evidence that we can reduce consumption through interdiction, legalization, and punitive action (and that's it's so damn costly, both in human lives and in economic terms), is it time to think about legalizing some (or all) illicit drugs?

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