Expert Analysis

Trump’s border wall, the opioid crisis, and the hell of good intentions

This is part 2 of a 3 part series. You can read part 1 here.

The border wall will make transportation of opioids and other drugs much more difficult, and therefore the cost of transportation will shoot up. When this happens, marginal, smaller suppliers will have to drop out of the (black) market, leaving larger, more violent, better connected, and wealthier operations with an even greater share of distribution. Again, this is exactly what happened in the past with alcohol prohibition. Al Capone did not become a titan of organized crime with control of eastern bootlegging operations because he was such a shrewd businessman, he came to control such a vast criminal empire because he was willing to take advantage of profit opportunities created by the limited supply of alcohol by murdering, extorting, blackmailing, and stealing his way toward control of the black market. When alcohol was legal, his services were superfluous. When alcohol was illegal but easier to obtain, drinkers could go to small-time bootleggers whom they knew and whose reputation dictated their profits — if these small-time dealers poisoned, killed, or stole from their buyers, the buyers would go elsewhere. With Capone, there was nowhere else to go. So, if you think gang-on-gang violence in large cities is bad now, wait until the supply of pure opioids drops off without a corresponding demand-side plan to curb use and abuse.

The opioid crisis cannot be solved by exclusively going after the supply side of the market. The demand for these drugs is about as inelastic as it gets — huge price swings are unlikely to affect the quantity of the drugs demanded by the addicted users in the (black) market. Some combination of ramped up treatment and rehabilitation, as well as greater availability of safe substitutes to ween addicted users off more dangerous selections, is essential. As is reform of drug regulation.

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This is part 2 of a 3 part series. You can read part 1 here.

The border wall will make transportation of opioids and other drugs much more difficult, and therefore the cost of transportation will shoot up. When this happens, marginal, smaller suppliers will have to drop out of the (black) market, leaving larger, more violent, better connected, and wealthier operations with an even greater share of distribution. Again, this is exactly what happened in the past with alcohol prohibition. Al Capone did not become a titan of organized crime with control of eastern bootlegging operations because he was such a shrewd businessman, he came to control such a vast criminal empire because he was willing to take advantage of profit opportunities created by the limited supply of alcohol by murdering, extorting, blackmailing, and stealing his way toward control of the black market. When alcohol was legal, his services were superfluous. When alcohol was illegal but easier to obtain, drinkers could go to small-time bootleggers whom they knew and whose reputation dictated their profits — if these small-time dealers poisoned, killed, or stole from their buyers, the buyers would go elsewhere. With Capone, there was nowhere else to go. So, if you think gang-on-gang violence in large cities is bad now, wait until the supply of pure opioids drops off without a corresponding demand-side plan to curb use and abuse.

The opioid crisis cannot be solved by exclusively going after the supply side of the market. The demand for these drugs is about as inelastic as it gets — huge price swings are unlikely to affect the quantity of the drugs demanded by the addicted users in the (black) market. Some combination of ramped up treatment and rehabilitation, as well as greater availability of safe substitutes to ween addicted users off more dangerous selections, is essential. As is reform of drug regulation.

If we are to assume a large number of victims of the opioid crisis started as patients in dire need pain relief, only to become addicted such that when their prescriptions run out, they look to the black market for cheaper alternatives like heroin, then it makes eminent good sense to make available to these poor souls safer, less debilitating alternatives. The fact that Oxycontin and Percocet are available by prescription to most any sufferer of chronic pain, while several states are without a medical marijuana program at all — and many others have programs that are de facto monopoly schemes, concentrating the supply in the hands of a few landholders and thereby keeping prices high and restricting the amount of the drug available to the public — makes no sense whatsoever.

About Alex Benson View All Posts

Alex Benson writes about financial markets and the US economy, interpreted through the lens of his experience as an economist, lawyer, and avid reader and student of history. Alex graduated from law school in 2016 and is a practicing lawyer at his day job. The rest of his time is spent reading, writing, or in the weight room; when not practicing law or reading and

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