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“Drugs, guns and gangs are blamed on an uptick in crime across the nation, and the trend holds true in Maine, McKinney said. Gangs in southern New England have discovered that Maine is profitable because there's less law enforcement and higher profits, McKinney said. A bag of heroin costs $10 or less in Boston, but it sells for $30 in Maine, he noted.”
Maine crime grows 4.6 percent, biggest increase in 14 years - Boston.com (http://www.boston.com/news/local/maine/articles/2007/05/09/maine_crime_grows_46_percent_biggest_increase_in_1 4_years/ - broken link)
The main point is not to talk about crime in the State of Maine, but to highlight the efficiency of capital markets, no regulations, government intervention, monopolies, consumers, and free-trade. Yes, I’m making another argument in favor of capitalism using the only un-regulated industry in the country, the illegal drug industry.
I guess a better question would be to look at why rural drug dealers are more profitable than inner city drug dealers and why they operate significantly less risky companies in the same industry (location really does matter). Let’s start with the basics. What are the pros with being a drug dealer in rural America?
Lack of Competition (Rural drug dealers have virtual monopolies, thus they are able to charge consumers (addicts) higher than normal prices for drugs.
Manufacture and distribute (in the case of pot manufactures in Kentucky, California, and other states along the Appalachian Trail.)
Significantly cheap Labor Cost (How many foot soldiers do you really need to employ if you’re the one stop shop for drugs in a small rural town?)
Lack of Adequate Police Enforcement (Yes, the location is your friend. How many cops are there per person in the state of Maine versus the city of Boston? It is much less riskier to be a drug dealer in Maine than it is in the City of Boston.)
Now let’s look at some of the cons of running an illegal drug business in a densely populated inner city
Huge amounts of competition (thus addicts have ample amounts of choices, so you cannot charge just anything or you may loose customers. This leads to a price reduction for consumers (addicts).)
Distributor only (You really cannot grow large quantities of drugs in a densely populated city, so you have high cost in getting your drugs from someone else wholesale before you can sell them in your market.)
Higher Cost for Labor ( If you’re dealing illegal drugs in an inner city you have significantly higher labor cost, because you have more competition to deal with, thus you’ll need more foot solders to protect your territory.)
Heavily enforced Police presence (If you’re in the inner city your business is much more risky to maintain, because you have competition not only from other drug cartels, but from law enforcement. You are at a significantly greater risk of being caught in the inner city for pushing drugs than you are in a rural area.)
Here is the conclusion i have come to, first for addicts, if you’re an addict it’s much less costly to live in a large city where you have a plethora of drug choices than if you live in a rural area. The down side of being a drug addict in a rural area is you have limited choice in suppliers and you’re subject to a high priced monopoly.
Why don’t we see more drug dealers operating in rural territory? Well, the obvious a city provides access to millions of addicts, whereas a rural area is pretty limited. You may have to charge $30 bucks a pop for a population of only 20,000 people whereas you can afford to charge $10 a pop for a population of more than 200,000. However, because drug dealers do not publish profit and loss statements or balance sheets I have no way of knowing how profitable a rural business is versus an inner city business. I would venture to say, that an inner city business makes substantially more income, but operates in a much riskier market, with substantially lower margins, than a rural drug dealer. Perhaps this could explain why we do not have rural towns with sky rocketing murder rates like we do with inner cities.
Main Point of this diatribe is to point out how a free-market can relate to things like illegal drugs.
Additonal Food for Thought
I cannot help but throw race into this, has anyone ever stopped to think, that poor blacks living in the inner city are incarcerated for drugs at a far greater rate than poor rural whites? Has anyone ever stopped to think outside of the racial box and perhaps it has more to do with the fact, that inner city blacks are operating a much riskier illegal business, that is much more prone to police intervention??? (How many cops are there per person in Maine and how many cops are there per person in the City of Boston? Get my point)...Sometimes you have to examine the industry and the characteristics of the industry and not the race of those being apprehended.
but as you pointed out I think the rural guys get far more money. They don't have to buy from some Columbian or whatever. They can grow their own stuff be it marijuana or meth and distribute. they are a one stop shop.
Since this thread began, there has been an explosion of production of Oxy by the pharmaceutical industry. Add to that the fentanyl being added to the heroin out of Afghanistan and the problem is huge. We have more deaths all the time. Ambulance crews and cops are saving the users more often, but they can't save thm all. One woman had been saved with Narcan eight times that we know of, but nobody got called for the nineth OD. Her funeral was about 10 days ago.
Has anybody ever heard a kid say, "I want to be a junkie when I grow up?"
but as you pointed out I think the rural guys get far more money. They don't have to buy from some Columbian or whatever. They can grow their own stuff be it marijuana or meth and distribute. they are a one stop shop.
Thought we were talking about the heroin epidemic.
Since this thread began, there has been an explosion of production of Oxy by the pharmaceutical industry. Add to that the fentanyl being added to the heroin out of Afghanistan and the problem is huge. We have more deaths all the time. Ambulance crews and cops are saving the users more often, but they can't save thm all. One woman had been saved with Narcan eight times that we know of, but nobody got called for the nineth OD. Her funeral was about 10 days ago.
Has anybody ever heard a kid say, "I want to be a junkie when I grow up?"
No one intend to become a junkie.
They all tend to believe they will somehow be able to control it, long after it control them.
It's a series of " it's not so bads" compared to those further into the spiral.
but as you pointed out I think the rural guys get far more money. They don't have to buy from some Columbian or whatever. They can grow their own stuff be it marijuana or meth and distribute. they are a one stop shop.
I don't know the economics of it, but I would think the risk / reward for meth would have to be pretty high. I mean you can literally blow up your house if you are making the stuff.
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