The Economy of the Illegal Drug World

Economics is, essentially, a method of analysis that involves incentives; choosing the most beneficial option with the least effective loss. Cost is a factor, as well as consumption, demand, and many other important variables. In a society or, in this case, an underground system, economics is sometimes common sense, and precedents are made as opposed to legislative measures. A product is sent out from a single source, cost grows for the consumer as the product is fractioned and reduced in size. This is where the profit for distributors comes in. For example, a man residing in a neighborhood purchases an ounce of mids, or mid-grade marijuana, for $210. The man then divides the ounce into roughly 27.5 grams, and bags each gram individually. This is then marketed out to buyers, and a profit of $275 is yeilded from ten bag mid sales, assuming individual grams were sold in total to buyers. Typically what happens next is another ounce is purchased for $210 and the dealer gains $65; the cycle repeats. Pills are sold, at this point, based on availability, hence the wide range of prices in a small matrix of dealers. OxyContin can go for $1/mg OxyCodone. Some people want $40 for an OC40, some want $5, it all depends. The dealer asking for $40 may...

• a) be buying from an even more costly source
• b) be in an area where he is the 'monopoly'
• c) be in an area with low demand
• d) or simply have a very cheap source and very high demand.

'd)' is just 'b)' backwards ;). The system is just like the business world, profit is founded on middle men and manufacturers, interdepending upon each other. Although it is not, and can not be, that simple. The system is not only involved in trafficing, but also service. Dealers will pay to have a taxi to their sales, and that also increases income, so gain is acheived for both as the dealer's radius of availability grows. Yet we need to take in the amount of gas, the taxi won't drive simply for the ride, if there is no profit because all the bank was used on gas then a wise driver would push for more pay. But then the relationship/friendship factor arises, and that's a whole other variable that can make tremendous differences in economic activity. The market changes depending on almost anything. Prices will increase on drugs with harsher penalties as there is a higher risk to hold the product the dealer will only have the incentive to sell if the profit is worth the risk. The market is not gentle by any means, in fact it can eat you alive. It can lock you up, take your money, or ruin your life. It can have you killed. Competition is held above life, especially when it comes to mass quantities. Not some grambag dealer in your neighborhood, but dealers bringing tons across the map every day. In such situations, often your life is a price they're willing to pay for profit. If they're nice enough to bribe you, and you decline, you'll probably end up dead or nearly dead within the week. But such things rarely happen out of the mass quantity market. But some lives depend entirely on this market, and it can be dealt with right; it can be dealt with wrong. Some succeed and some are doomed to fail. It's all economics.