Monday, April 16, 2012

The Illicit Drug Market: What the US can learn from Germany

"Drugs have taught an entire generation of American kids the metric system."  ~P.J. O'Rourke

According to Havocscope, a database that chronicles global black market trends and statistics, illicit drugs in Germany are much cheaper than they are in the United States. In 2011, the combined average price per gram of cocaine, marijuana, and heroin in the United States equaled $357, which is more than double the $149 it costs to purchase in Germany. An extreme but valid example of price discrepancy lies in the cost of MDMA tablets, otherwise known as ecstasy, in which American prices are 350% more expensive than the $7 street valued tablets found in Germany. 

Interestingly enough, this goes against all logic provided from an “economies of scale” standpoint. As you can see in the image below provided by the United Nations in regards to the flow of cocaine, the United States has a larger consumer base than Germany as well as the larger and relatively dependable processing, supply, and distribution networks coming from nearby countries in South America. One would think that mere proximity to the Americas would result in a price much lower than one required to travel from South America, transatlantic through Africa and into the EU. However, the opposite appears to be the case as German users pay half as much as Americans do for illicit drugs.