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Supply and demand: the changing nature of the War on Drugs

The United Nations has recently announced that Peru has taken over Colombia as the largest producer of illegal coca leaves, the base for the drug cocaine. This comes as Brazil becomes the second biggest…

Peru is now the world’s leading producer of coca leaves, used in cocaine. Should this mark a new shift in the War on Drugs? Julyinireland

The United Nations has recently announced that Peru has taken over Colombia as the largest producer of illegal coca leaves, the base for the drug cocaine. This comes as Brazil becomes the second biggest cocaine market behind the US, and in front of Britain, Italy and Spain.

This supply-side shift back to Peru has not come as a surprise. The brutal, US-funded War on Drugs in Colombia continues to force production back to neighbouring countries, which before the 1990s were the highest cocaine producers. Nor is the demand-side shift to Brazil surprising, as the past decade has seen growth in mass consumerism in combination with an increasing crack cocaine problem.

According to the 2011 Report of the Global Commission on Drug Policy:

…apparent victories in eliminating one source or trafficking organisation are negated almost instantly by the emergence of other sources and traffickers.

On the demand side, the report stated that:

…repressive efforts directed at consumers impede public health measures to reduce HIV/AIDS, overdose fatalities and other harmful consequences of drug use.

What can be observed in the global drug trade is the “balloon effect”, suggesting that the decline in production and consumption in one region causes it to bulge somewhere else. It is also known better as the efecto cucaracha, or cockroach effect. You can chase the pests out of one corner of your house, but they have an irritating habit of popping up somewhere else. As Ronaldo Laranjerira, a Brazilian drug researcher, told local media: “drugs follow money”.

The consuming shift to Brazil coincides with an era that has supposedly seen greatly increased living conditions, but many of the middle and lower sectors are unable to take part in the “Brazilian dream”, as I have previously observed. This is in combination with the growth of mass consumerism, rising lower-middle class sectors and the growing problem of crack cocaine in the favelas (or shanty towns).

Anthropologist and author Philippe Bourgeois also comes to this conclusion in his book In Search of Respect: Selling Crack in El Barrio. High drug consumption is an internalised reflection of the fact that modern society has totally rejected and dehumanised those who live in the ghettos in the US, and have been refused access to the “American dream”.

Imperial commodity

It is the poorer Latin American nations suffering the gang violence, political corruption and high murder rates associated with cocaine, while the consumer, western nations and Brazil have abuse problems - especially within marginalised groups. In some ways, it is like colonialism has not left us.

182,780kg of cocaine was confiscated by the Peru National Police in 2003. EPA

Cocaine also functions as an “imperial commodity”. It is a commodity for which there exists a lucrative market and profit-making opportunity where much of the profit ends up in western coffers, as well as the upper and criminal classes of Latin America.

Global drug policy therefore tends to reproduce these relations, with drug consumption becoming the object of a crusade. The evil is projected onto the producer nations and not onto the consumer nations - onto the “other”, and not onto oneself.

Much of the harm from drugs is not necessarily to do with the taking of the drugs themselves, but rather the way in which they are prohibited. This has created a huge black market that is worth tens of billions of dollars annually. It is run by violent drug runners outside of the reach of the law and connected to its cousin, the illegal arms trade.

Diverging solutions

A fix is not something that will come easily. Legalisation has the strong possibility of solving many of the violence and corruption issues in the producer and trafficking nations.

Yet for some, legalisation is an irreversible gamble. If dependence rose sharply, that increased dependence would remain - even if drugs were re-prohibited.

However, this gamble looks very different within Latin America. Cocaine consumption is a growing but still modest problem, and most trafficked drugs are destined for consumption elsewhere. The key problems in Latin America are the violence and corruption associated with illicit trafficking. The US problem is drug abuse and domestic drug trafficking.

Therefore, US and Latin American interests are not aligned when it comes to the question of legalisation. Latin America should not pin its hopes on waiting for the US to legalise, or be dependent on US-style drug wars as witnessed in Colombia, or a one-size-fits-all drug policy.

In the consumer nations, questions need to be asked about why there is such a huge cocaine and crack market. This is a societal, not a law enforcement question. Humans are guided and restricted by their social conditions and as some studies have shown, drug addiction is connected with our social conditions.

Many of the problems in which drug abuse is symptomatic of are problems of late capitalist society, alienation, reification, individualisation and the destruction of social and cultural structures which could provide support. One viewing of the well-researched television program The Wire, showing the conditions of the urban precariat class in Baltimore US and their relation to drugs, will lay testament to this.

The US city of Baltimore was the setting for iconic TV show The Wire, which focused on problems in a city beset by the drug trade. Lee Burchfield

This is also evidenced in how increasing enforcement in order to make drugs harder to get and more expensive has been tried, and failed. In fact, over the last 40 years, the number of drug dealers in prison in the United States has increased by a factor of 15. The prices of heroin and cocaine have fallen by 90%.

Drug policies and strategies at all levels too often continue to be driven by ideological perspectives or political convenience, and pay too little attention to the complexities of the drug market, drug use and drug addiction.

Problems in key consumer nations (US, Brazil, Europe and Australia) diverge from those in the producing and trafficking nations (Latin America), and as a result each should be tackled differently.

A country like Mexico could step up and further decriminalise cocaine in attempt to stem the bloody violence, and once again Latin America could lead the way in progressive drug policy away from colonial like relations that the war on drugs has created. In the meantime, consuming nations need to look past heavy-handed prohibition as the only option.

The real test could come out of Brazil, where there is a combination of the violence and corruption along with the consumption and addiction problems.

Join the conversation

14 Comments sorted by

  1. Stephen Ralph

    carer at n/a

    Once again it's time to review this futile "war" on drugs.

    It will never be won and it will never be over til the multi-billions spent (and wasted) is curtailed.

    We get to see the fruits of police endeavour with bags of drugs displayed as booty. But the reality is that the captured drugs are but a minute % of drugs purveyed and ingested around the nation and globe.

    On top of the billions spent on policing, there is the billions spent on the other side of the drug problem - medical treatment and crime committed by drug users.

    No amount of heavy handed action will reduce drug trafficking or use, so we may as well look at the alternatives and save billions to be used elsewhere.

    1. Mike Swinbourne

      logged in via Facebook

      In reply to Stephen Ralph

      Too true Stephen.

      Humans have always - and always will - use mind and mood altering substances, be they caffeine (imagine starting the day without your fix of caffeine!), alcohol (a glass of wine to wind down after a long day), or any of the less legal substances. To continually pour billions of dollars into trying to stop this from happening is futile. It has never worked, and never will.

      If we want to reduce the adverse impact of drugs on health and society etc, then we need proper strategies and the money to do so. Prohibition has only increased the adverse impacts through increasing organised crime, the criminisation of normal people, and causing use problems because the drugs used are of unknown quality and dosages. And trying to enforce prohibition costs billions, which take away from our ability to spend on health and harm reduction measures.

      When you think about what we should be doing, the answer is pretty damn obvious isn't it?

  2. Brandon Young


    Escalating the war on drugs serves the self interest of all the forces that profit from unaccountable power, and that seek to expand the realm of unaccountable power.

    The list includes political parties on the Right, Secret services, Big Pharma, Law Enforcement, Arms manufacturers, Big Media, Corporations, and those at the top of the food chain, the bankers. The benefits for each of these players should be fairly obvious, perhaps after a little thought.

    And who loses from escalation of the war on drugs? The community, particularly the bottom rung.

    No contest.

    1. Dan S


      In reply to Brandon Young

      And who loses when drugs like cocaine, heroin and meth are freely available? It's not the illicit drug manufacturers. It's also not big pharma who continue selling loads of legal drugs. The army will go back to whatever else they are doing.

      Who wins when the war on drugs takes a step back? It's not the community.

      No contest.

    2. Stephen Ralph

      carer at n/a

      In reply to Dan S

      Well let the government sell off other assets, there's billions to be made by having state control of the market. They already spend enough as it is, they may as well own the damn trade anyway.

    3. Mike Swinbourne

      logged in via Facebook

      In reply to Dan S

      '.....And who loses when drugs like cocaine, heroin and meth are freely available? It's not the illicit drug manufacturers..."

      Yes it is. If drugs are maufactured and distributed legally by licenced providers, then of course the illegal manufacturers are going to lose out. Do you want an example? Thank alcohol and prohibition.

      '....Who wins when the war on drugs takes a step back? It's not the community...."

      Yes it is. We will have a lot more money to spend on harm reduction strategies, rather than wasting it on law enforcement that is not and will not work.

      As you say - no contest.

    4. Brandon Young


      In reply to Dan S

      If you can't zoom out enough to see the real forces at play, and so the real approach needed, then argument probably will not enlighten you.

      But surely you can see that being hard on drugs does not solve the problem, and has so many destructive consequences. This is undeniable, right?

  3. Gavin Putland

    logged in via Facebook

    "When the authorities break up a drug syndicate, they raise prices for the benefit of other syndicates by taking out a competitor. When they catch a drug wholesaler, they raise prices downstream for the benefit of retailers. When they catch an importer, they raise prices within the country for the benefit of retailers, other importers and domestic producers. When they catch an exporter, they raise prices in the rest of the world for the benefit of all suppliers to that market. If they deter exports, they reduce domestic prices; and if they don't compensate by disrupting retail sales, the price reductions reach all the way to the streets, encouraging drug use in their own country. But if they deter retail sales, they raise retail prices to discourage consumption, while reducing wholesale prices to discourage production, importation and distribution. And if they cut off retail sales, they de-fund the whole industry." -- .

  4. Michael Shand

    Software Tester

    Good article,

    It's a shame this article came out before the uruguay government started selling weed for $1 a gram

    and they are not messing around, apparently they want to sell top quality weed

  5. Leo Kerr


    The war on drugs - lost, lost and lost but lets keep doing the same thing - as Albert Einstein famously said:
    "Insanity: doing the same thing over and over again and expecting different results."

  6. Gart Valenc


    I do agree, Andrew. See 'War on the Supply of Drugs: The Face of Drug Imperialism?' here:

    I would like to make a couple of observations:

    1. As far as I am aware of, the Balloon Effect and the Cockroach Effect are complementary, not identical. The Balloon Effect refers to the displacement/migratory aspect of drug trafficking, whereas the Cockroach Effect refers to its resilience i.e. how difficult it is to eradicate them, as well as their tendency to come back at the slightest…

    Read more
  7. Matthew Grant

    Academic Registrar - Faculty of Medicine at University of Melbourne

    Great article Andrew.

    Time to shelve the war and look beyond.

    The Netherlands has the lowest levels of marijuana use in Western Europe (even though decriminilised and freely available for personal use) - but this is only one issue - as there are still considerable problems with trafficking, often associated with other not-so-pleasant activities. Whilst decriminalistion or legalisation isn't a bad idea, other issues also need our attention. A good look at the other problems we often forget