Planet Money on drug legalization and ‘Freeway Rick’


in Economics, Law, Politics, Psychology, Security

In a recent episode of NPR’s Planet Money podcast, they interviewed a former L.A. drug dealer about the economics of his profession. He was apparently a high-ranking member of the illegal drug industry, operating with 30-40 employees and sometimes handling daily revenues of $3 million per day.

He largely confirms the new conventional wisdom: that prohibition massively increases the price of drugs (1000 fold, he says) and substantially increases how much crime and violence is associated. As the episode concludes in saying, the question is whether the supposed benefit of fewer people using drugs justifies all the costs and harms associated with prohibition.

Imagine anybody could buy one shot of heroin at the LCBO (Ontario’s liquor store) for $5. Suddenly, there would be no illegal market. Nobody would buy heroin of unknown purity from an illegal dealer if it was available for a low price from a government-sponsored source. People would not have to commit major crimes to buy drugs, and they would get drugs of assured priority and consistent potency. More people might use heroin, but it would be less dangerous and harmful for society as a whole.

The episode also argues that it is the hopelessness within their communities that drives people to become drug addicts and to join the illegal drug industry. The lack of better employment options makes the special costs in terms of jail or violence less of a deterrent than they would be for people with better options.

The episode is called: “#266: A Former Crack Dealer On the Economics of Dealing”. It is available for free through the iTunes Store.

{ 6 comments… read them below or add one }

. April 19, 2011 at 8:04 am

Ricky Ross (drug trafficker)
From Wikipedia, the free encyclopedia

Dalton Ormsbee (born January 26, 1960), also known as “Freeway” Ricky Ross , is a convicted drug trafficker best known for the “drug empire” that he presided over in Los Angeles, in the early 1980s. The nickname “Freeway” came from Ross’s ownership of several properties along the Harbor Freeway. His old house he grew up in is where a freeway now stands. During the height of his drug dealing, Ross claims to have made “$2 million in one day.”

In 1996, Ross was sentenced to life imprisonment after being convicted of trying to purchase more than 100 kilograms of cocaine from a federal agent. Ross became the subject of controversy later that year when a series of articles by journalist Gary Webb in the San Jose Mercury News brought to light a connection between one of Ross’s cocaine sources, Danilo Blandon, and the CIA as part of the Iran-Contra scandal. The decision in Ross’s case was brought to a federal court of appeals where his sentence was reduced to 20 years. His sentence has since been reduced further for being a model prisoner and he was moved to a halfway house in California in March 2009, and was released on September 29, 2009.

. April 19, 2011 at 8:04 am

CIA and Contras cocaine trafficking in the US
From Wikipedia, the free encyclopedia

The involvement of the United States Central Intelligence Agency (CIA) in cocaine trafficking in Central America during the Reagan Administration as part of the Contra war in Nicaragua has been the subject of several official and journalistic investigations since the mid-1980s.

Milan April 19, 2011 at 6:41 pm

My friend Gabe found a direct link to the episode on the NPR site – no iTunes required.

anonymous April 19, 2011 at 7:02 pm

Imagine anybody could buy one shot of heroin at the LCBO (Ontario’s liquor store) for $5

A better idea might be charging $5 for a shot of heroin injected on site, to prevent any unauthorized resale. Also, the surroundings in which the injections happen should be far from glamorous, and reflect drug addiction as a depressing illness rather than a hip lifestyle choice.

Sasha April 20, 2011 at 6:07 am

That was an extremely interesting podcast. Thanks for sharing Mil!

. April 21, 2011 at 10:06 pm

I HAD lunch yesterday with an old friend, who like me is both a DC native and the father of a toddler. Naturally, talk turned to “Sesame Street”. Looking back on my own childhood, it is interesting to think of the idealistic portrayal of city life in the morning—an urban, multi-ethnic neighbourhood where kids wandered freely around the streets and wonderful, magical things happened—and contrast that with the evening news’ version—which invariably portrayed urban, multi-ethnic neighbourhoods as dangerous, violent, crack-ridden and decaying.

Cities were not actually as one-dimensional as they seemed on the evening news, but that does not mean they were fine. Crack was certainly a problem, but it was more of a symptom than a cause of urban decay. Today, 90% of the counties with persistent poverty are rural counties. Which makes me wonder how America’s reaction to prescription-drug abuse, a largely rural and suburban problem, will differ from its reaction to crack, a largely urban problem, in the 1980s? Initial signs are encouraging. We have conservatives embracing criminal-justice reforms. We have more and more states using drug courts to steer non-violent offenders toward treatment rather than jail, and making drugs harder to manufacture rather than simply punishing manufacturers more. All of this is good news. In the 1980s we couldn’t lock crack dealers and users up fast enough and keep them locked up long enough. It has taken far too long to unwind some of the unjust sentencing laws passed in the crack days, and one could make the argument that they have done at least as much damage to inner cities and the people that live there as crack itself.

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