“How drugs are like art?”
Well that’s just a provocative headline if I ever saw one.
Turns out, it’s true though – stay with be now.
The main reason is based on the fact that most markets for illegal drugs are a monopsony.
Said different, the illegal drug market, from farmer to local cartel, has only one buyer of the raw supply.
Since local farmers, simply looking to plant the most valuable crop, have only the local cartel to sell their raw product to, any large changes in supply, and therefore price, are pushed back on the farmer.
Because of this supply chain, changes in supply have very little impact on street prices.
It’s kind of like paint:
“Governments are approaching the cocaine market as if it were the chocolate market, in which a rise in the price of cocoa beans leads to a corresponding rise in the price of chocolate bars. In reality, it is more like the art market, in which the tiny cost of the raw materials is insignificant compared with the high price of the finished product. Attempts to raise the price of cocaine by forcing up the cost of coca leaves is a bit like trying to drive up the price of art by raising the cost of paint.”
–Tom Wainwright, How To Run A Drug Cartel
