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. 

 

So what does this price difference mean? First, we should examine the failed “War on Drugs” we experience here in the United States. Started by President Richard Nixon in 1972, it aimed to reduce illegal drug trade through policies condemning the production, distribution and consumption of illicit drugs. A fruitless idea believed that if the prices continued to increase, domestic drug use would not be affordable and therefore suffer a major blow. Therefore, today the US Drug Enforcement Agency tries to raise the street value of illicit drugs by targeting those involved in the drug trade, namely domestic suppliers and consumers. 

They have been very effective in this pursuit of the arresting of dealers and users. In 2010, of the 211,000 inmates in federal prisons, 51% of them had been incarcerated for drug related crimes. These prison sentences are not short. A drug related prison sentence can run from a year, to life in prison.

However, consumption in the United States has not declined. Despite the War on Drugs' $15.1 billion dollar budget, the United States still leads the world in drug abuse. In 2010, 43% of Americans admitted to using marijuana at least once in their lifetime and 16% had used cocaine. The Center for Disease Control estimates that nearly 9% of the American population has used illicit drugs in the past month.

In Germany however, there is a different trend. Similar to other countries’ decriminalization of drugs in the Netherlands or Portugal, Germany’s drug policy is much more progressive than that we experience in the United States. In common cases in Germany, drug addiction is not a crime. In 2001, Germany’s drug policy provided a provision allowing for safe injection sites. In 2009, after the results praising the favorable results of heroin-assisted treatment, treatment for addicts was managed as a service into Germany’s mandatory health care system. Yet, amongst the lack of penalty for users and relatively affordable prices, only a small percentage of Germans have tried drugs in comparison to the US. Only 17% of Germans have used marijuana and less than 2% of Germans admitted to ever trying cocaine.

This paints a clear argument that decriminalization and treatment is more effective than incarceration in deterring  drug use. The War on Drugs’ record of accomplishment has shown that it has been more effective at incarcerating its citizens than preventing them from using. So why not decriminalize drugs and focus on treatment here in the United States?

Well, decriminalizing certain narcotics is much easier said than done. We now have entire industries that benefit from the prohibition of drugs. As California remains on the fence about the decriminalization of marijuana, the three largest lobbyists against decriminalization have been working around the clock. The California Beer and Beverage Distributors see their competitive advantage as legal substitute to drug use being threatened. More so, the groups Public Safety First (police union) and the California Correctional Peace Officers Association (prison guard union) have been lobbying to assure that they will continue to have jobs catching and incarcerating people for drug use.

It appears that the German and American policies have taken nearly opposite approaches to deterring drug use, and in turn experienced opposite results. Germany has taken the route of treatment rather than prosecution and relative to the US, their drug problems are laughable. Meanwhile, as an effect of poorly constructed policies and an inability to change, drug abuse and incarceration in the US remains horrendously high (no pun intended). The tide seems to be changing however, as  now close to 50% of Americans favor all out legalization of marijuana. Let’s just hope the US policy makers can wise up soon.