Date: 2025-05-02 Page is: DBtxt003.php L0913-TVM-MMW-000028
|
TrueValueMetrics ... Peter Burgess Manuscript
Making Management Work for Relief and Development |
| HOME | Nav ... L0913-TVM-MMW-000000a | Last ... L0913-TVM-MMW-000027 | Next ... L0913-TVM-MMW-000029 |
|
Chapter 28
Drugs, Sex, Gambling, etc. |
|
Big Businesses ... Making Money
With huge profits Some of the highest profit business activities in the world are those that are illegal and involving drugs, sex and gambling. Many countries in the rich “north” have made drug use, that is recreational use of drugs as opposed to medical use of drugs, illegal. Prostitution is also illegal in most of the rich “north”. Gambling is illegal in some places ... but gambling is a big industry and heavily taxed in other places. There is an objection to gambling by some and an enthusiasm for gambling by others. Making things illegal does not automatically reduce the demand. There is a high demand for illegal drugs, prostitution and gambling ... and with demand, economic behavior results in supply. Illegal drugs Illegal drugs are in high demand ... most of the drugs result in addiction, and this builds demand, and the illegal nature of the business constrains supply. Not surprisingly the profits are huge. There is no framework of law to control the trade in illegal drugs, and it is violence that provides the control framework, together with protection. The scale is huge and all sorts of people are implicated. Farmers who grow the raw materials, whether it is coca for cocaine in Columbia or poppy for heroine in Afghanistan, make a lot more money growing raw materials for illegal drugs than they can ever make growing regular food crops ... and with this money they can take care of their families and give their children a chance at an education. Illegal commerce in drugs ... drugs that are illegal in most of the “north” being processed, transported and distributed to the market. The profits are huge, and the people engaged in trafficking drugs have large risks and large rewards. Killing is common. Multi-million dollar remuneration is also common. Money talks, and the international illegal drug business is not much different in scale from trade in textiles or in petroleum. Law enforcement is puny compared to the scale of the trade. Prostitution Prostitution is, sadly, a lot more profitable for women and girls than other work that they can do. In most places it is illegal, though carried on with the protection of the authorities. Protection is a cost of doing business for the prostitutes, and reduces their earnings dramatically. I did an assignment in Thailand in 1982. It was to do with the enabling environment and the framework of law and banking institutions to facilitate investment. My formal work showed that the enabling environment was not conducive to foreign investment ... law, language, culture, practice, etc., etc.. None of the formal structure was good enough to encourage investment. But there was foreign investment ... a lot of it. The investment was in brothels, and all the support structure for a vibrant sex tourism industry. Foreign investment was coming in, and the financial success of these investments showed that money could be made. The formal framework was not good enough to encourage investment, but was not enough to stop profitable investment. The bad news is that this sector was sex ... the good news is that the fund flows and profits from the sex industry helped Thailand to move forward to being a strong economic performer over the next 25 years. Human Trafficking Illegal commerce in people ... people are being moved around the world to work in the sex industry, often against their will, or as a result of being duped in some way. It is a disgrace, and international law enforcement has failed partly because of the profit potential in protection, and partly because there is little or no global outcry about the trade. Gambling Gambling is a major industry, serving all strata of society from the super-rich to the very poor. Gambling related tourism is big business ... and gambling is a big and growing factor in Internet commerce, even though it is considered illegal in many jurisdictions. Gambling is the main contributor to the wealth of many cities that are associated with gambling, from Atlantic City and Las Vegas in the USA to Monte Carlo in Europe and Macau in the Orient. Taxes on gambling pay for education and health services ... Gamblers win and lose, and the other vices of recreational drugs and sex are not far way. Addiction Addiction is an unfortunate human frailty. It is widespread, and a driver of drug use, and out of control gambling. Addiction is not easily constrained and law that makes the behavior illegal does little to help solve the underlying problem of addiction. Rather there is a need for more understanding and more treatment. There are many double standards with drug use and with gambling, and these add to the appearance of hypocrisy in the management of these problems. Tobacco Seriously addictive ... a cancer causing pleasure, and hugely profitable for tobacco growers and cigarette manufacturers, as well as legitimate taxing authorities. Why is tobacco legal and a not very different product, marijuana, illegal? Why is there controls of nicotine content in the “north” and not in the “south” ... where the same company is producing the cigarettes? Lots of questions, and the same answer all the time ... it is all about money. Alcohol The consumption of alcohol is controlled in most of the “north” ... but it remains a problem. Drunk drivers main and kill on the roads, in spite the threat of heavy penalty. Some cultures ban alcohol, for good reason. An attempted ban on alcohol in the USA in the 1930s ... “prohibition”... did not stop drinking, just made it illegal and profitable and arguably more dangerous. Are there any lessons The big lesson is that addiction is a big problem, and needs to be addressed one person at a time. Society can help, but not simply by political bluster and clumsy lawmaking ... it must help though values, through education, through health services and through family and friends. With multiple coherent interventions, a lot of progress can be made. But no progress is made when society has instant gratification as a prime driver of societal decisions. |
| HOME | Nav ... L0913-TVM-MMW-000000a | Last ... L0913-TVM-MMW-000027 | Next ... L0913-TVM-MMW-000029 |