Fighting against drug consumption, global police forces find themselves pitted against organized crime. Winning battle after battle, their war against drugs lingers for centuries. Can police forces win their campaign? Using Economics 101, let’s look at the situation and see if we can learn something about creativity.
What happens after a drug bust?
When police detectives blow up an entire chain of command of a drug trafficking organisation, what happens to the rest of the market? On the one hand, supply is cut short. On the other hand, demand is unchanged. As every business student knows, the pendulum of market equilibrium will move. Drugs are scarce products, so the price is highly inelastic. Because of the artificial supply cut, street prices for drugs will skyrocket. With one of their competitors taken out of business, ceteris paribus, market conditions for all other drug traffickers have dramatically improved: their margins increase substantially.
Now consider a fringe crime organization, just barely earning their living with car theft or shop lifting. Until now, these amateur gangsters found a professional gangster career to hard to pursue. Richard D’Aveni probably never considered what it was like to be a gangster. But he defined hypercompetition as happening when rules are in flux and competitive advantages cannot be sustained. Thus, D’Aveni argues, market participants must constantly compete in price or quality, or innovate in supply chain management.
Fantastic opportunities arise for start-up drug traffickers
But the risk/reward profile for crime start-ups has dramatically improved. Until the gap in market supply is bridged, higher prices for drugs mean higher margins. And risk got lower: not only do the cops have no clue about the brand new organization forming itself in the underground, but there is also one big fish less in a small pond. Crime start ups may even find venture capital or angel investors.
Can you stop the Pendulum from swinging?
By winning a battle against drug traffickers, police forces do not improve their chances of winning the war against drugs. The only thing that happens at all is that the pendulum of market equilibrium swings back. A new organisation will replace the one the police caught. It is as if police tries to out swing the pendulum in the hope it will cease to swing.
Well, you could try to tackle the demand side of the market equilibrium. Of course, you could as well try to stop earth from spinning. But there is something else you can do. Why not, by offering drugs on prescription in pharmacies, wipe out the drug trafficking market altogether?
The Pendulum would stop to move.
Get creative: Look at the underlying assumptions
So what can be learned for creativity? It is often not necessary to invent something new. You should also take a look at the underlying assumptions and wonder about them. Everyone just assumes that we have to enmuster a war against drugs, because trafficking drugs and taking drugs is a crime. That’s an assumption, but none that we are aware of, aren’t we?
Now what if we don’t assume we have to fight taking drugs? What if instead we accept a human proposition to take drugs and made them available in pharmacies? There you would get consultation about the effects and your medical condition. The drugs you get would be of high quality, causing less deaths. As drugs became legal, the “I’m taking drugs and this is illegal, so look at me what a brave-crazy-unbelievable-revoluzzer I am”-factor would vanish.
And finally, if drugs were to be legally available, no one would pay for drugs and drug trafficking. That’s a lot of crime that goes out of business, and a lot of money saved to hunt them.
I’m not going to say making drugs available in pharmacies is the final solution. I see many pros, but there are also contras.
But I want you to understand how you can get creative by looking at all the underlying assumptions.
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Tags: drug bust, drug trafficking, drugs, Economics, police
