Assorted links

by on June 20, 2011 at 2:09 pm in Uncategorized | Permalink

1 ross June 20, 2011 at 2:18 pm
2 Rich Berger June 20, 2011 at 2:20 pm

3. No way – we had all the economists.

3 snarkster June 21, 2011 at 9:30 am

lol

4 Anon. June 20, 2011 at 2:48 pm

#5

Even if it wouldn’t stop cartels completely, it would hurt their bottom line. It may not stop them, but it will make them smaller and weaker. Just because legalization is not a full solution does not mean that it would do nothing.

5 Brian June 20, 2011 at 5:31 pm

Legalized pot would become a more compelling substitute for other still illegal drugs thereby lowering demand for the cartels’ remaining businesses. And the black market channels through which people currently search for pot would be less well-explored post-legalization so access to other hard drugs would be more difficult then.

6 Dan Dostal June 20, 2011 at 6:19 pm

I have read in several places that the Montana black market has a lot less money in it since our medical marijuana program took off in 2009, though it’s difficult to wade through all the articles on the subject. It’s not a panacea, but full legalization would go a long way.

7 AndrewL June 20, 2011 at 2:49 pm

A)
Given: Demand of weed in US and Weed being outlawed
Given: Mexico Produces large quantities of Weed,
Problem: Violent Criminal activity results from meeting the US demand for weed
Solution: Make Weed legal in the US to prevent violent crime

B)
Given: Demand for guns in Mexico, and guns being outlawed
Given: US Produces large quantities of Guns
Problem: Violent Criminal Activity results from meeting the Mexico demand for guns
Solution: Make Guns legal in Mexico?

8 dbeach June 20, 2011 at 7:47 pm

It’s a bit twisted, though, since the “Problem” in part A is creating the first “Given” in Part B.

9 Philo June 20, 2011 at 3:22 pm

As for #4, I wonder if the authors consider their own effort to be *science* or *journalism*. (Judging by the abstract, it is of low quality, in either category.)

10 Andrew' June 20, 2011 at 3:25 pm

Got it. Had to read the whole abstract though. Irony detector broke.

11 Perplexed in Peoria June 21, 2011 at 2:25 pm

Got through the abstract OK. But my irony meter sounded when I tried to get the full article.

12 dirk June 20, 2011 at 3:25 pm

5. Why is drug legalization synonymous with only “marijuana legalization” in this article? Her first point is that even if weed were legalized the cartels would still make huge profits on other illegal drugs. No duh. That’s why the best thing to do is to legalize all drugs. Her next point is that the cartels will continue in other illegal activities like kidnapping. That is probably true, at least in the short run. The drug gangs aren’t going to change overnight, but legalization will erode their economic power as cartels over time (they will cease to be cartels), and as the Mexican economy benefits from less overall corruption the incentive to play the dangerous game of kidnapping for a living will diminish.

You could say the biggest problem with the logic of this writer, a “former officer and investigative special agent in the Air Force” — is the inability to recognize the value of changes at the margin.

13 Andrew' June 20, 2011 at 4:28 pm

Legalize marijuana and they will just switch to selling CDs…and I freaking hated those kids in college.

14 Andrew Montgomery June 21, 2011 at 5:22 am

Surely the profits on counterfeit CDs are much lower than the profits on illegal drugs? And in the places where money can be made on such things, money is already being made. Furthermore, drugs cause other problems because of their addictive and debilitating nature (petty crime to fund drug habit, unable to get a job because of addiction, health problems, etc.). Watching a pirate DVD imposes far fewer externalities; in fact in many poorer areas the buyer wouldn’t have been able to afford the full price anyway, so it’s barely a loss for the studio.

As Voltaire said, “don’t let the perfect be the enemy of the good”.

15 Joe June 20, 2011 at 5:21 pm

Dirk,

She’s not including other drugs because, as she discusses in the opening of her piece, she’s responding to calls for marijuana-only legalization. Which makes sense, since marijuana only-legalization has a much better chance of being passed in the near future than total legalization.

16 Dan Dostal June 20, 2011 at 6:22 pm

People like me who are very much in favor of marijuana legalization but fencing on other illicit drugs would ruin any attempt at more. Let’s legalize marijuana and start doing some real research on the newly legal drug and on what’s left over. Should be a much simpler task than now too. I’m not personally ready to accept that decriminalization/legalization ala The Netherlands or Portugal will work in the USA. I don’t have that much faith in us.

17 Andrew' June 21, 2011 at 7:12 am

It’s not so much that drug legalization will “work” here, it is that criminalization is going to keep getting worse.

For one thing, I believe we have more powerful marijuana because of the logistics of smuggling. I also believe that a lot of the harder (more powerful, more concentrated) drugs ride the coattails of the marijuana smuggling infrastructure.

18 Dan in Euroland June 21, 2011 at 9:45 am

So your ‘arguments’ are faith based? I am glad you vote.

19 Simon C June 21, 2011 at 5:08 am

Plus let’s not forget that whatever police and prison resources that are currently being wasted on drug non-crimes could instead be focused instead on reducing real extortion type crimes.

20 Andrew' June 21, 2011 at 9:15 am

That may be a bug rather than a feature from the public choice perspective. There must be reasons why marijuana is still illegal, and one of those reasons may be the rents the enforcement agencies get from victimless crime enforcement. It’s probably more fun too, as you don’t need to dick around with warrants and witnesses and all that hassle.

21 JasonL June 20, 2011 at 3:29 pm

#6 Anthropomorphism for fun and profit. If a dolphin looks happy with the perma smile, we should give the dolphin the benefit of the doubt. If animals can’t pass tests for characteristics, we should give them the benefit of the doubt. I like animals, but this is kind of the opposite of science. I will ponder it further on the ride home in my wide-eyed, happy grilled car.

22 Ian June 20, 2011 at 3:43 pm

#5
As Longmire (author of article) points out marijuana makes up 60% of revenue she doesn’t mention that it makes up an even more substantial proportion of domestic production (I can’t remember where exactly I read that, but it’s pretty intuitive coca and poppies aren’t grown there). Cocaine and Heroin has to come from places like Columbia and Afghanistan. The cartels can rely on weed for revenues when it’s difficult to get the other drugs. So legalization of cannabis would be more than just a short-term hit. The other factor she neglects is that the trade of drugs is consensual. Cartels would probably take more hostages and extort more businesses if they couldn’t sell drugs. However, if the police are effective and not corrupt (they aren’t yet) a shop owner who is being extorted will call the police the same with the relatives of the kidnapped. But a drug user or smuggler has no reason to report the crime. If drugs were legal, efforts to improve the quality of Mexican police could make a difference and not just escalate the violence. The author also worries that cartels might start selling drugs legally, like gangsters after prohibition. If they did the FBI would indict the board of directors for the murders that they ordered when they were a illegal cartel or under RICO laws. If the cartel found some one with a clean record and ran the business legally with out killing anyone, isn’t that much preferable to status quo (the FBI would be watching for money laundering of course)? Nobody complains about bootlegging history of the Kennedy’s.

23 Ian June 20, 2011 at 3:46 pm

Darn, Dirk beat me to the submit button

24 Kevin June 20, 2011 at 10:23 pm

Ian, I thought of the exact same example of the Kennedy’s, and I agree that there are worse things than criminals finding their way into the legal economy.

25 John Schilling June 20, 2011 at 4:52 pm

Drug legalization, if it happens, will likely begin locally. So the first question is whether legal made-in-the-USA marijuana (and possibly other drugs) can undersell drugs smuggled in from Mexico. The answer isn’t obvious. Legal producers will have to pay minimum wage to the field workers, taxes on their profits, and a multitude of regulatory expenses. The cartels will have to pay for smugglers, money launderers, corrupt government officials, etc. If the cartels can undersell the legal producers, they win. If we can use police power to force their costs above the legal competition, they lose.

Second question is, how long can the cartels stay in business if the bulk of their revenue is now forcibly extracted from the Mexican people? Right now, the cartels (simplistically speaking) extract money from Americans and distribute it to Mexicans – in a sufficiently unequal, illegal, and occasionally violent manner as to generate as much opposition as tolerance. The more the cartels are forced to prey on the Mexican people, the less tolerance they will receive.

I don’t see this ending without either the demise of the cartels, or the demise of the Mexican state. But I am not sure which.

26 Matt Waters June 20, 2011 at 5:11 pm

My impression is that black market drugs generally sell way above cost already. Legal sellers would also have a big advantage in that their customers don’t have to go through those distribution channels.

It’s worth keeping in mind though when we set tax rates. Even cigarette taxes have created quasi-black market ways around them. Demand for pot is also probably more elastic than cigarettes. The Laffer curve max is probably much lower for weed.

27 Dan Dostal June 20, 2011 at 6:33 pm

The way it stands, in a medical marijuana state like Montana, no local growers cannot undercut the cartel’s prices. However, this doesn’t actually surprise anyone that watches such business as local growers took the business of distribution from Canada and the west coast. Basically the cartels are the Walmart of drugs growing and selling on the cheap with the added benefit of that seller can usually get other low end drugs like meth or low grade cocaine. Those of us who could afford any sort of quality rarely even interact with those guys, if at all. And if my anecdotal evidence is anything, the guys who ran to California and Oregon to bring back the higher quality stuff are now growing and selling themselves. These are almost 2 separate economies.

Now, the big difference with medical marijuana in Montana and legalization on a nationwide scale are legal marijuana Walmarts. By law we effectively will never have a medical marijuana Walmart in this state. Instead we have very dedicated artisan growers. They sell for standard markup and live the standard small business lifestyle always trying to make ends meet as the market has worked quite well. With legalization on a larger scale Phillip-Morris would replace the cartels as the marijuana Walmart while the rest of us would continue to buy from the same artisans as before, only they could finally take advantage of the larger national economy, like banks!

28 Alex Hoopes June 20, 2011 at 7:59 pm

On http://www.priceofweed.com marijuana users report the prices they pay for the substance, and averages for US states and Canadian provinces are built. I would note that while states bordering mexico tend to have cheaper marijuana than most other states, the states closest to British Columbia enjoy much lower prices, and pot smokers I have known tell me that “B.C. Bud” is far superior to Mexican marijuana.

B.C. Business magazine estimated in 2008 that the marijuana industry was the second-largest contributor to BC’s GDP, and employed 250,000 workers, and I’m guessing these Canadians are paid more than their Mexican counterparts, though I have no data to prove that.

My point is that B.C. makes a higher quality, lower cost product than the Mexican cartels do while (presumably) paying their workers a higher wage. Given that this is true, I find the idea that legal marijuana will be higher cost or otherwise unable to compete with cartel product to be suspect at best, and horribly misguided at worst.

In B.C. marijuana is grown in suburban basements turned into grow-ops, and gardeners work under the threat of police action. A legal marijuana industry could build dedicated factory versions of these basement grow-ops, and wages paid to workers wouldn’t have to include a risk premium. Perhaps taxes would make legal marijuana less competitive, but my gut feeling is that such taxes would need to be quite steep indeed for that to be the case.

29 Finch June 21, 2011 at 9:16 am

BC is great. You should definitely visit Vancouver. I hear it’s a riot.

30 Alex Hoopes June 21, 2011 at 11:37 am

Hilarious. You know, I was watching the game right there downtown when the riot started. That experience was surreal.

31 dirk June 20, 2011 at 5:36 pm

I wish an economist would write a NYT editorial about drug legalization in Mexico. Why is a former officer in the air-force the one tackling the economics of this subject for NYT readers?

32 Andrew' June 21, 2011 at 9:31 am

I guess Paul Krugman is too busy being evenhanded.

33 Ray June 20, 2011 at 5:57 pm

The cartel article is pretty weak sauce. A 60 percent reduction in revenues would be devastating, especially if marijuana is, as I suspect, their high margin business. The other hard drugs are also probably high margin, but kidnapping and stealing oil can’t be as lucrative.

Furthermore, she admits that the 60 percent would give the cartel leaders a strong incentive to legally produce marijuana without adding that the decision to go into a legit business would create an incentive to get out of the illegitimate businesses, a la Michael Corleone.

So while she’s right that legalizing pot won’t end organized violence, it will have almost the same effect as repeal did on the gangsters of the 20s. It’s going to suck out a ton of energy and money from the criminal enterprise and give the smartest gangsters a chance to move up in the world.

34 dbeach June 20, 2011 at 7:49 pm

Exactly. I read the article and saw that “only” half of the cartels’ revenue comes from marijuana. Only half? What business could survive losing half its revenue?

35 Joshua the PostLibertarian June 20, 2011 at 6:44 pm

#5 is fairly ironic too. Using consequences of post-prohibition as an argument against the effectiveness of legalizing marijuana? How much alcohol does organized crime still sell today? I would be much more interested in reading something that explored compared and contrasted drug cartels with organized crime in the 20’s, why the latter more or less disappeared and why we could or could not expect the same from the former.

36 ziel June 20, 2011 at 7:44 pm

Legalization is a joke. We’re on our way to criminalizing the manufacture and sale of cigarettes – we’re going to “legalize” marijuana? We can completely decriminalize personal use of marijuana, but that accomplishes nothing since people have to be able to purchase it for use. Without a free market to manufacture, distribute and sell the product, it will remain a criminal enterprise. In a nation where outlawing the serving of undercooked eggs is often considered, the notion of legalized marijuana is absurd. The Cartels have nothing to fear.

37 jkl June 20, 2011 at 8:54 pm

yes, had him not attacked the USA or allowed his generals to take decitions in war. Stalin was as mad as him
no, maffia thrives in many legal activities. Most victims of racketters are legal activities. See garbage in Italy.Gambling in Europe is legal , still thye have match fixing scandals

38 jkl June 20, 2011 at 9:02 pm

And killing his own people did not help either specially when he killed or made run away the most talented people in the country.

39 JoeDog June 20, 2011 at 9:27 pm

#3: No. Hitler was determined to expand eastward at the expense of the Soviet Union. Germany lost the war the second he attacked that country. The Soviets could have defeated them with no help from the West.

40 J Thomas June 20, 2011 at 10:59 pm

If the soviets could have defeated germany as it was, how would germany have done if they waited for the soviets to attack?

If germany was losing the arms race, their best bet was to attack immediately and hope for the best. They couldn’t expect Stalin to indefinitely put off conquering them. He’d probably attack soon after he was sure that Japan wasn’t going to be a big threat to the east. Early 1944 at the latest.

41 DK June 20, 2011 at 11:22 pm

Absolutely. Would have taken longer but the eventual outcome was given. People defending their homeland during a war of extermination have a major resolve advantage over invaders.

42 DPTrombly June 21, 2011 at 12:53 am

I think you’ll note that one of Snyder’s points was that if the German’s *weren’t* hellbent on waging a war of extermination, their chances of success would have improved immensely.

Now you’ll probably say that nobody in Nazi Germany wanted anything but a war of extermination, and you’d be extremely reductive. In fact, after the war a lot of the former Nazis ended up idolizing Bismarck’s “good treaty with Russia” dictum and the spirit of Rapallo and thought that the Slavs and Germans were natural enemies of Anglo-American capitalism.

So, in fact, an invasion of the Soviet Union that was done mainly along the lines of the WWI German offensive, that sought to enlist the many subject peoples of the USSR (some of whom, like the Ukrainians and Poles, were victims of cleansing themselves) against Russian Moscow could have done quite well. A campaign which effectively leveraged the Baltic populations, Poles, Ukrainians, Byelorussians, Tatars, the already friendly Cossacks, etc as client co-belligerents in a future German Mitteleuropa might have gone much, much better.

43 DK June 21, 2011 at 1:13 am

True. Would have gone much better (as initial reaction in Ukraine showed). But then, would it make much sense to begin with? The whole thing was about Drang nach Osten, wasn’t it?

44 Cassander June 21, 2011 at 4:52 am

The nazis could have liquidated the locals after the war was won. That’s what Stalin did.

45 J Thomas June 21, 2011 at 4:46 pm

To the extent that the Nazis felt that war with the USSR was inevirable, that they would face a defensive war against vastly greater numbers of soviets at the soviets’ convenience unless they attacked first, the war wasn’t just about extermination.

Except, if they won a quick war and didn’t kill lots of slavs, wouldn’t they have it all to do over again? Russia was too big to ignore and too big to occupy.

46 Right Wing-nut June 21, 2011 at 8:33 am

Have you ever looked at a map of the disposition of forces in early 1942? In 1943? Germany had TREMENDOUS resources dedicated to protecting the Western flank of Europe. I’ll agree (without double-checking) that the lend-lease to the Soviets was more of a morale boost than a material one, but even the morale boost mattered. But again, if there had been no problem with England & the US, then Germany would not have needed to have put so many resources into its fleet.

Both Leningrad and Stalingrad were seriously besieged. Certainly, Leningrad/Stalingrad/Moscow were less important than their rough equivalents in Western powers, but seriously, could they have withstood the loss of all three?

One interesting counterfactual that I have always heard is the delay caused by the Balkan actions. If the attack had started six weeks earlier, then there is a good chance that Leningrad would have fallen that first fall. This in turn would have made a number of strategic options easier for the Germans.

47 DK June 21, 2011 at 9:45 am

I can probably draw those maps from memory. But they don’t matter here. Over 85% of German casualties were on Eastern front, that’s what matters. Like I said, without lend-lease Soviets would have harder time and the war would likely have been prolonged by couple years. But the end would still be the same.

48 Chris Durnell June 21, 2011 at 12:59 pm

Many people have said that Lend Lease was not essential for the Soviets to win the war. Unfortunately Stalin and Zhukov are among those who disagree. Since the end of the Cold War, it has become known that there were plenty of private conversations by top Soviets after the war that Lend Lease was essential. Lend Lease was not substantial in 1941 and 1942 when the war was most in doubt, but it was also the time when the Red Army got its ass handed to them by the Wehrmacht. And even though volume was not high, it is likely that the limited amount of Lend Lease given in 1941 was vital in the defense of Moscow as much of the Soviet armored and fighter assets had been destroyed earlier and Soviet factories could not make up the difference.

In terms of total goods, Lend Lease provided something like 10% of the entire war material of the Soviet Union. 20% of tanks, 30% of combat aircraft. These are substantial figures. Then you have large amount of ammunition, explosives, food, and boots given. If you take that away, how much of the Red Army is reduced by? 1/3? Seems to me the Wehrmacht could do a lot better with that number gone. Plus Lend Lease benefited the Red Army in lots of other ways. The US supplied most of its trucks, radios, telephone equipment, and other highly technical items that made a modern blitzkrieg army possible (and which the Soviet economy was terrible at making). It’s hard to coordinate a tank attack if crews cannot talk to one another. It’s hard to exploit a breakthrough in the enemy lines if you don’t have enough trucks to keep the forward troops supplied.

Then you have all the non-war materials given to help set up the Soviet factories. Lend Lease provided railroad tracks, locomotives, millions of tons of critical raw materials and oil, and precision machine tools. Without those, Soviet production would not have been anywhere near as high. Without Lend Lease the Soviet economy could not have survived the loss of its best agricultural land, much of its heavy industry, and capital stock.

And of course, it is not just Lend Lease. The Allied bombing campaign sucked away most of the Luftwaffe’s fightrer strength away from the Eastern Front, diverted manpower to the AA guns, and shifted production away from artillery, anti-tank weapons, and armored vehicles to anti-aircraft and fighters.

None of this takes away that the war was decided on the Eastern Front nor that 80-85% of the German army was fighting there. But denigrations of the impact of Lend Lease is just incorrect.

49 Eric H June 20, 2011 at 10:31 pm

#4- I thought the irony was in the first sentence of the journal abstract.

#5 – Her entire counterargument is undermined by one of her own statements: “Plus, there’s no reason the cartels couldn’t enter the legal market for the sale of marijuana, as organized crime groups did in the United States after the repeal of Prohibition.” Before the ink is even dry on those incorporation papers, they better have dropped all of the other illegal activity if they want to remain in possession of the cash cow. Baptists and Bootleggers – what’s the connection?

50 Manoel Galdino June 20, 2011 at 11:16 pm

Just checking: the irony on #4 is that a paper discussing the fact that scientific findings are only discussed by scientits is itself only discussed by scientists. Am I right?

51 ziel June 21, 2011 at 12:19 am

Yeah, I don’t really get it, either. If that’s it, it’s not particularly ironic – in fact it’s rather expected. If the findings were trumpeted in the NY Post, that would be ironic.

52 Neal June 21, 2011 at 8:56 am

No, it’s that you have to pay $25 to read the actual paper.

53 ziel June 21, 2011 at 9:31 am

That’s ironic because…?

54 russell1200 June 21, 2011 at 12:09 pm

LOL – I think that is it.

But only because of the very loose definition that we now allow for “irony”: unless the author was unaware that there would be a charge for his work when they wrote.

55 notkevinnealon June 21, 2011 at 12:23 am

I have often wondered how much the drug cartels spend on lobbying efforts to keep drugs illegal. I’m am without a doubt that they drop large sums of cash on visits to congress, political contributions and donations to anti-legalization groups – dressed up as right-wing, God-fearin’ fundamentalists. Hell, they probably even started the anti-legalization groups themselves.
I also have wondered if there are any other examples of a corporation or group that might have lobbied against itself in similar fashion. I would not have been surprised if it were revealed that Tipper Gore’s ladies were funnelled cash from 2 LIve Crew and friends.

56 russell1200 June 21, 2011 at 5:57 am

The definition of the word “irony” has become so overstretched, that I am not even sure what you mean by your question: which by one of the many definitions of irony, is likely ironic as well.

Your not stating the terminal point of a link is annoying. Most of the time I remember to right-click and look at properties.

57 kruggie June 21, 2011 at 6:06 am

Didn’t the Germans eventually make use of Vlasov, etc in the USSR? They could have fielded such troops much earlier on. So apparently even ideology was not a hindrance by the middle of the war. Also a different counterfactual could have been built around more political collapse in Russia following the invasion, say if Stalin had been put down as he initially feared.

58 Micah June 21, 2011 at 10:45 am

#4. Scientists are producing massive output, but the mass media isn’t reporting these research findings. Damn those journalists for not doing our job! Let’s discuss amongst ourselves.

“this study attempts to show that reliance on journal publication and subsequent coverage by the media as the sole form of communication en masse is failing to communicate science to the public.”

59 Philo June 21, 2011 at 1:43 pm

#4: From the abstract, it appears the authors look just at publication in scholarly journals and publication in the mass media, ignoring webblogging. Would it be ironic that Tyler links to their (scholarly?) paper on his blog?

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