Narconomics: How to Run a Drug Cartel by Tom Wainwright.

There are few enough rational actors in the real world, let alone the world of politics. We tend to establish our prejudices and build supportive evidence around them. It’s odd, then, in a country where so many puritan prejudices have faded away, that we still manage to maintain a puritan perception of crime and punishment. Crimes, self-inflicted or otherwise, are still seen as failures of character. This is probably one of the main motivations for the many ways our state and federal governments work to punish drug users. We extend their prison terms, take away their franchise, and keep away benefits all in an effort to, apparently, shame drug users into moral behavior.

This really excellent book by Tom Wainwright tries to reframe the “war on drugs” through the eyes of an economist. What drives the drug marketplace? What actions have a true impact and are cost effective?

Many of the answers are provided in the first few chapters followed by supporting evidence and a summary of suggested solutions. The key, says Wainwright, is to focus on the supply side of the drug industry. In dealing with the buyers of drugs, through therapy and regulation at the “point of sale” drug cartels will fall apart by robbing them of the billions of dollars in income that make their operations worthwhile.

Wainwright compares the drug world to Walmart, a major retailing enterprise with it’s own issues of competition, supply chain management, human resource issues, and issues with diversification. The industry has become such a force that the United Kingdom has calculated that drugs and prostitution are now greater combined financial forces than agriculture.

Wainwright traveled throughout Europe, South America, North America and Asia to document how drug cartels operate. He interviews people from coca farmers to end users and the many middle-men along the way.

From these he shows how we are failing in our goals to decrease drug use. We spray herbicides over coca trees, harming agricultural families with few other choices or sources of income, while hypocritically maintaining our position as one of the great markets for cocaine and other drugs. He contrasts this approach to the fight against heroin in Switzerland, where the use is regulated through doctors who can work with addicts to provide safe drugs by prescription. Because addicts often finance their habit with street sales this is dramatically lowered the number of new addictions while also providing a situation where drug users have better opportunities to reduce their habit or kick the drug entirely.

He also discusses states like Colorado where drug arrest and incarceration have been lowered dramatically while the state still learns to better regulate the supply side of marijuana use.

Wainwright also discusses the comparative costs of imprisonment and rehabilitation in a country where the cost to keep an individual in prison is comparable to a year’s education at Oxford.

The book overflows with interesting stories and economic insights. Anyone interested in public policy, or just wanting supporting information in dealing with their national, state, and local politicians get a wealth of data here.