[05] Supply and Demand of Drugs by Anonymous

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A key element that is not touched upon is the creation of the demand. The demand for the drug does not materialize from thin-air, it is dependent upon the supply. Once the supply has been steady enough for addictions to develop, the elasticity of demand can fade.

Basically, the argument for inelasticity is only sustained for a drug that already has a very high number of addicts.

If different measures were taken when oxycontin was introduced, for instance, is it possible that today's black-market demand for the drug would be lower? Or higher, for that matter?

Also, a crucial element is noted early but then back-burnered, that being that the inelasticity is short-term.

If the prices go through the roof and stay that way, the drug will be prohibitively expensive, perhaps not in the immediate short-run, but very soon thereafter.

For instance, if the price of dank went up to $1000/quarter oz., how many of those would you buy before examining your alternatives (hash, schwag, mids, etc)?

But I'm not ripping this apart, it's an excellent piece with solid economic theory backing it. In fact, I'd advise editing out some of the "biting yourselves in the ass" ranting, simply because it's otherwise an objective and serious piece that does not come off as the writings of a pissed-off drug advocate.
 

Bremmario

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My microeconomics lecturer last year informed the class that studies (I cant remember if he specifically stated which) showed that the demand for weed is actually elastic, due mostly to the amount of substitute products, alcohol being the main one.
If the government wants to increase the price to drive away demand why dont they just supply clean drugs at a huge cost. The prices are obviously not at a level anywhere near the government desired level and it seems pretty unlikely to me that they are going to increase dramatically any time soon.

I know if i were inclined to take illicit drugs I'd rather pay 3-5 times as much for them and know they were top quality than have three to five times as much but not know if its going to contain what it is I am supposedly purchasing.
If one chooses to take the argument that such people would be willing to pay more for the drugs therefore we cannot simply set the price higher to achieve our goals, we must eliminate supply there really isnt much argument against that apart from analysis of the history of the war on drugs and the with this in mind the reality of eliminating supply.
If in keeping with the theory of outpricing the demand side the government keeps trying to destroy supply, what is the likelyhood of being able to actually pull off a rise in the price of such substances to a rate of 3-5 times considering the vast resources already being thrown at the "problem"?

Here is a modified extract of one of my speeches for a law class.
A very simple and effective reform to reduce working class crime’s harmful effects on society would be to legalise heroin and other such illegal drugs, with the government providing them free of charge to addicts and giving them voluntary access to education and health services to combat their problems.
This would reduce the amount of people going through the corrective services system, reducing the financial strain on the government, reducing much of the unneeded impact upon users of such drugs both in a health sense and in the sense of the harmful effects accruing to them as the result of the criminality of their habit. The harmful effects coming due to the random nature, quality wise of the drugs they obtain, the criminal culture they must necessarily come into contact with in order to obtain a supply and the unnecessary injection of addicts into prison culture for what ought to be considered as a health problem rather than a criminal one.The financial strain upon addicts of feeding their illicit addiction is what for the most part drives poor addicts to crime, legalising drugs would drastically reduce this. If the government provided drugs they would be of a much purer grade, overdoses would become much more predictable and thus preventable. Also of great significance is Mann’s point that this will shrink access to drugs for first time users, reducing the rate of addiction in society. This will also decrease the not insignificant police harassment of certain minority groups in society whom are seen as suspects of such offences. The consequences of removing most or all of the illicit drug trade in a country are difficult to foresee in terms of what those dependant on income from drug sales and manufacture, perhaps an increase in other types of crime could be expected but in the long run, the removal of the lure of massive, easy profits will increase the percentage of productive members of society, with many of those that might previously have been tempted to peddle drugs having no other choice than to work.
End of extract.

The argument that, in an environment where drugs are supplied cheaply, using drugs will lead to a huge increase in crime not for the sake of funding but just for the simple fact that drugs drive crime is a fairly stale argument in my opinion. Of course to effectively combat this, valid and reliable statistics and research is needed. From my limited (in terms of chemicals and socioeconomic contact, me being white and middle class) experience drugged users tend to be either euphoric and the thought of violence/'evil' (by this I mean core criminality such as assault, theft etc) abhorent, so whacked out the thought of doing anything more than simply lying/sitting down/basically doing a whole lot of nothing is beyond them or simply too apathetic, too lazy or strangely morally (in a mainstream sense) sound/normal.
That said I do not come into contact with hardcore drugs/users with raving being my peak of experience in such a 'field'.
 

dr seuss

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there's some fascinating discussion going on in this thread. it's especially fascinating for those of us who have absolutely no economic awareness :)
 

Empty

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This article was excellent, and I want to know if I can quote you on a research paper I have to write on the Drug War in English.
 

diegoblunt

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^LMAO!!! umm yeah, you can quote this ... but i doubt you'll get good marks :D Make sure you refer to me as Professor Blunt in the bibliography!

This arguement is entirely hypothetical and badly written, but nonetheless interesting .. I initially made it a thread in drug culture, but it got no responses, so i sent it here. I'll write a much more in depth follow up when i can be fucked. It will include a much more intensive derivation of demand and its elasticity, bring in some consumer choice analysis and properly examine demand/supply in the long-term.
 

TheDaniel

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Oct 30, 2003
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Let's just get Microsoft to start selling drugs.

They'll start a monopoly on the market and put all the cartels out of business.

Then again, if their drugs were anything like their software, they'd be overpriced, unreliable and nobody would know what was in them.
 

toolazy2think

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^^...as opposed to what it is now?
 

onlywant2nod

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I know I'm not bright at all even after reading what seems complicated to me about supply and demand of drugs.

What it all makes me wonder is, how close do all of you think the US may possibly be to FINALLY ending the "retarted war on drugs, war on freedom"?
I'm 39 years old, which seems old to me, but does anyone think I just might possibly see the wonderful day when especially opiates are legalized for depression? or any drug that works best for the huge amount of "depression burdened" people in the US.

Especially with the way things are going so lousy in the US these days, I am assuming that more people are using their d.o.c. for depression more than any other time in the past.
 
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