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  1. mrsolearyscow
    INCENTIVES matter, as economists and other behavioural scientists have been trying to drive into our heads for decades now, and Llewellyn Hinkes-Jones has a great piece at the Atlantic's Cities blog amassing the evidence that the remarkable drop in crime rates in America since the mid-1990s is largely due to the plummeting price of cocaine. This makes profit rates for coke dealers insufficient to warrant violent efforts to control territory.
    Once the margin of profit for dealing small amounts of crack cocaine disappeared, being part of the drug trade was no longer worth the persistent threat of violence or the stiff criminal penalties. A 70 percent drop in cocaine prices like the one that occurred in the mid 1990s combined with competition from decentralized sources for methamphetamines and prescription narcotics would completely eliminate the minimum wage drug dealer as a viable profession.

    The same goes for turf wars, which [sociologist Sudhir] Venkatesh saw as the source of the majority of inner-city violence. He saw the life of a drug dealer as relatively violence-free up until territory conflicts with other gangs ensued. Without the high value of cocaine as a commodity, the incentive for protracted gang wars would dwindle as well as eliminate the economy for the illegal weapons, drive-by shootings, and mercenary “warriors” needed to help defend prime dealing locations. Without profit to fight over, Vankatesh thought that “gang violence would likely return to pre-crack levels.”
    Mr Hinkes-Jones thinks the low price of methamphetamines, which have taken off in popularity since the early 90s, makes it similarly unappealing to wage violent turf wars over crystal-meth distribution. (That thud you just heard was my disbelief in the plot line of "Breaking Bad" crashing out of suspension.) But I'm still left wondering about the narrow focus on cocaine here. After all, crime rates were pretty high already in the late 1970s before the crack cocaine wave took off. The big surge in contemporary (post-Depression) crime rates in America came in the early 1960s to the mid-1970s (see charts).

    Maybe it's just my folk understanding of cultural history, but it seems implausible that the run-up from 1963 to 1974 was due to cocaine. Heroin, maybe? But the central point being made here isn't so much whether cocaine, or drugs in general, were exclusively responsible for the run-up and subsequent decline in violent crime; it is that the role played by cocaine prices in causing crime may be the reverse of what the criminal-justice system has assumed. As Mr Hinkes-Jones writes, "one of the DEA's stated objectives for the War on Drugs was to make drugs more expensive and therefore harder to access for the individual user." It has clearly failed at that task, and if Mr Hinkes-Jones is right, that's a good thing.

    Source: http://www.economist.com/blogs/democracyinamerica/2011/11/crime-and-drugs


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