Imagine the President of the US comes to you with a set amount of money to combat illegal drugs in the US. It is up to you to allocate this money as you see fit. Keep in mind that the demand for illegal drugs is probably inelastic. Your options are as follows:
1) Attack the supply of drugs: This option was taken by past administrations (at lease since the ‘war on drugs’ campaign in the 80’s). What is the result? Decrease supply, increase price (by a lot) and decrease quantity (by a little).
2) Attack the demand for drugs: This option has been suggested by many economist since we believe there is a reasonable chance that the result would be a decrease in demand, a decrease in price (which decreases revenue for the sellers), and decreases quality by a larger magnitude.
Now there is some evidence that Obama may consider the latter option with his latest pick for the number two drug czar (a local guy). Money quote:
He “…will be charged with reducing demand for drugs, a part of the foreign-supply-and-domestic-demand equation…”
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Attacking the demand for drugs seems to make more sense on for this issue. Since the past administrations in office have all chosen the same path, facts just show that the impact is very small. Increased prices and decreases quantity but only by a small amount. This would only seem to benefit the drug dealers with more money in their pockets. I would attack the demand for drugs and decrease demand by a larger scale. The prices would decrease and demand for it would go down which I believe is most important. It is very nice to hear that President Obama might consider this plan since the other plan does not show much positive results. Hopefully things will turn out right...
ReplyDeleteIt makes sense to attack the demand curve for drugs. Not only would you decrease the demand, and price, but you would also decrease the quantity but a good majority. Attacking the supply curve would only decrease the quantity of drugs by a little bit. Drug dealers would make out better if the supply curve was attacked because it would put money in their pockets. At least attacking the demand curve would reduce the TR for drug dealers. Doesn't it make sense for President Obama to attack the demand curve then?
ReplyDeleteVivian Hill said...
ReplyDeleteAcknowledging that the demand for illegal drugs will probably be inelastic, it is fair to say that people seeking illegal drugs will be willing to pay whatever price is given for the product. This being the case, it sounds more realistic to focus on decreasing the demand. People can not sell what people do not want. It seems feasible to focus on the wants and needs of the consumer, for if the consumer no longer want a product, they will not buy it. As a result, the seller either winds up increasing the price, looking for at least a quick profit, or the seller will decrease their prices hoping to at least sell off what they have finanacially invested in. Either way, if the product is no longer being used, needed or desired, there's no need to but it..
Vivian Hill said...
ReplyDeleteoops,
The last sentence should read either way, if the product is no longer being used. needed or desired, there's no need to buy it.
Finally a posting that links to my favorite news outlet the Philly daily news! I do not understand how a university of Penn lab scientist who specializes in addiction can really give political advice to president Obama. Yes he probably has the credentials to talk about treatment and prevention which would decrease the demand of controlled substances but a man with no political background should not be appointed to such an important role in the "Drug War." Attacking the supply of drugs coming in from other countries would result in designer drugs being sold as substitutes. But it would also result in inferior goods and with prices rising demand would decrease. Attacking the supply of an illegal drug is one of the most expensive tactics for the drug war options but also programs to decrease demand as of right now not very effective.
ReplyDeletewhile I am glad to see a Philadelphia native being considered what is he going to do that is going to make a dent in the drug trade? The powers that be can never take an effective stance on drugs. Wehter they attack the supply or demand politicans will never be able to control the market and please everyone. Some faction will find a problem in the outside of the box answer to the drug market. Until then its a scenario with no answers with our current way of thinking and dealing with societies problems.
ReplyDeleteIf I had to choose I would probably try and attack the demand for drugs through education. Statistics and the health risks of drugs that are being taught to students today aren't really working. Once kids decide they want to try a drug, they probably will, no matter what their teachers read to them in class. This may be a little unrealistic and weird, but showing kids how a full blown drug addiction can affect people would be more efficient if executed by showing disturbing movies like Requiem for a Dream, or shows like Intervention. These visuals highlight the gruesome and disgusting side effects of doing drugs, and are in my opinion a more effective way of dettering young people from doing harmful drugs than any D.A.R.E program or expensive textbook.
ReplyDelete