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Date: 2024-02-22 Page is: DBtxt001.php txt00001935

Burgess Brief for TVM
Addiction

Profits in the supply chain associated with addictive drugs may be bigger than oil. The drug trade may be illegal but it is hugely profitable.

There has been a 'war on drugs' for a very long time ... probably going back to the Nixon era. The problem of addictive drugs seems to be as big a problem today as it was several decades ago, if not worse.

I think of the problem in terms of addictive drugs rather than 'illegal drugs'. The problem is not a function of their legal status, the problem is associated with their addictive properties and the potential for profitable exploitation.

The addictive drug landscape has some similarities with the problem of alcoholism and the imposition of prohibition in the 1930s. When the consumption of alcohol was made 'illegal', the activity went underground, and criminal syndicates flourished.

In the war on addictive drugs, there has been a similar behavior. Use of these drugs is illegal, but because of their addictive nature, the consumption continues, and criminal drug cartels serve the market. Huge profits are being made along the supply chain from the growers to the eventual consumer, and all sorts of law enforcement activities consume the scarce resources of society.

I have done 'development planning' in many different parts of the world, including some countries where farmers grow crops for the addictive drug trade in preference to food crops. Though the farmers may not have formal education, they understand the basic economics of farming, and they choose to grow crops that will earn them the most profit ... that is addictive drugs.

Huge expenditures have been made to stop farmers from growing crops to supply the addictive drug trade ... but compared to food crop farming, the profits are high and the enforcement brutal but relatively weak. As long as the profits are high, the capitalist market system is going to work, and production will continue.

There are big profits at every step in the supply chain ... big profits means the supply chain will survive almost no matter what constraints are put in place, whether they are legal or purely physical.

The origin of the profits is the addictive property of the drugs. Initially a drug produces a good feeling, but addiction causes a craving for the drug and more of the good feeling ... and the cycle continues. Without effective medical intervention the addiction is extremely difficult to handle, and drug demand is born, grows and is sustained. This is a perfect market for a drug supplier ... a customer that cannot 'not buy' no matter what the rules. Making 'buying' illegal does nothing to address the underlying problem of addiction. Criminalizing drug use and all the aspects of the drug trade makes professional medical intervention difficult ... and essentially impossible.

The scale of the addictive drug industry is sometimes computed to be larger than the international energy industry ... arguably the biggest industry sector on the planet. I rather doubt this conclusion, but there is no question that the addictive drug sector is highly profitable and may well be bigger than the ethical pharmaceutical industry sector ... or bigger than food agriculture. This is a stupid outcome and suggests that the approach is wrong and should be changed.

The TVM system of valueadd metrics may help to change the conversation, and after dialog, change the way the problem of addictive drugs is addressed.



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