The Illicit Drug
in American Society, 5th, 6th, 7th, and 8th editions, Erich Goode, McGraw-Hill,
1999/2005/2008/2012. Chapter 13 and The Sociology of American
Drug Use, Faupel, Horowitz, and Weaver, 2004/2010, chapter 9)
I. Myths surrounding
the drug industry
- 1980s: $100
billion. Probably accurate
- 2000s: decline.
Price of Illicit Drugs: 1981-Second Quarter 2000;" $35 billion
on cocaine, $10 billion on heroin, $5.4 billion on methamphetamine, $10.5
billion on marijuana, and $2.4 billion on other drugs. Total: $65
billion. (estimate based on ADAM, NHSDUH, DAWN, UCR data). (local
- Prices down,
number-one drug based on money spent (2-4x that spent on heroin).
on money spent and volume of drug imported, cocaine use is down compared
to 10-15 years ago.
imports relatively constant, price down and purity up
although a narrowly defined user population, constitutes a "major
player" in the trade
tonnage is large, but market value comparable to heroin
yes, but varies from drug to drug
- Even for
the most organized trade, no "Mr. Big" and trend is increasing
structures may be highly centralized
dozens of suppliers, hundreds of distribution networks, and "multicultural"
- 2002 National
Drug Control Strategy report: cost to American society, $160 billion (not
including alcohol and tobacco)
health care costs and CJS costs are added to GDP.
- In 1992
Alcohol costs: $148 billion; tobacco costs (1995): $145 billion (drugs
for 1992 $98 billion) (Faupel, et al, 2004, page 281)
care costs: HIV and FAS, treatment.
(lost earnings): premature death, victimization, incarceration, crime
careers, impaired productivity
fire, traffic accidents, social welfare administration
- Costs paid
for by victims and their families (users and households: ~45%). Government
(taxpayers) 2/3's of rest. Remainder--non-using population (higher prices,
insurance premiums, etc.)
drug industry is an Industry: jobs, cash flow, investments, as
well as costs (Mexican
Drug Wars, 2010).
economy employs thousands, and generates revenue for legitimate business
- Market demand
and high profits (even down the chain). An integral part of many nation's
Economic Cost of Methamphetamine Use in the United States, 2005 (Rand
II. Where do
drugs come from?
a product, little processing
for decentralization (farmer as seller)
expertise on the production side
- Farm to
distributed production funneled through limited production facilities,
and then back to distributed distribution networks.
- Land, Air, and
- Depends on drug,
production source, etc.
- Wide range of
"actors." Sophisticated cartels as well as amateurs. "Mules,"
commercial vehicles, and "private services."
escalation to combat USA boarder patrols and the DEA.
(see Faupel, et al, 2004, page 289-291)
in quantity": focused on making money
"bundles" (about 25 street bags)
- Some at
this level sell pure enough for one additional "cut."
level dealer--street level, typically a user: "juggler." Sells
to support habit and provide some living expense.
- Will often
"help out" customers in withdrawal--buying on credit
- Lack of
by police ('flipping")--informants
- Most vulnerable
- Risks and
problems at this level similar to lower-level positions in legitimate
- Goldstein: Dealers
with reputation "righteous dope"
techniques: symbols, stamps, etc to distinguish their product
- Brand names--Goldstein
over 400 brands.
- One example
of distribution: Cocaine arrives in NYC airport, one of 10 or so "cells"
pick it up. Each "cell" has around 15-20 employees earning $2,500
to $7,000 a month. Each "cell" conducts around $25 million a month
business. Cells are autonomous, few have knowledge of all employees. Each
"cell" has a "head, bookkeeper, money handler, cocaine handler,
motor pool, and a 10-15 apartments serving as stash houses (Flynn, 1997, page
153, in Faupel, et al, 2004, page 289).
- Cocaine and
Heroin at this stage are relatively pure. Each link in the distribution chain
"steps on" the product (dilutes,
typically doubling the volume), and increases the price. Ends up with approximately
a 1,700% value added for cocaine, and a 3,000% value added for heroin (Faupel,
et al, 2004, page 289). Base price for a kilogram of cocaine: $610 and ends
up on the street at $110,000. Heroin: $90 to $290,000. (1997, World Drug Report,
table 1, chapter 4, page 126, in Faupel, 2004, page 289)
1990s Golden Triangle and Golden Crescent
- South America;
(1-3 kilo) loads
black tar on west coast
- Shifting back
to Golden Crescent/Golden Triangle?
looks like Goode (page 364 7th edition) is correct in that the DEA
reports the majority of the heroin consumed here in the USA comes
from Mexico and Latin America (2006-2007)
- 2005: Afghanistan
supplies 86% of world's heroin (up in 2006 and 2007).
highly organized networks (ethnic base) for distribution, loosely organized
within producing countries.
- At local
level--dependency on small farmers, who in turn are dependent on opium
production for their income.
- The farmers
can make 33-800% more growing poppies than other agricultural products
the farmers realize about 5-6% of the profit, major traffickers about
90% of profit.
- See, PBS Frontline "Opium Brides."
- Opium is converted
to morphine in local "refineries." Conversion of morphine to heroin:
5-stage process. Early years--in Marseilles, France or Hong Kong. Now relatively
Peru, or Bolivia: ancient practice
part of economy (10% GNP)
of dollars added to economy: consumer goods, land, and housing
for farmers not to produce (cost of land)
on other agriculture (lowland farmers move to take advantage of
down by one-half (600-300 metric tons, by 1999)
- Shift from
Columbian centralization and control to distributed networks relying on
Mexican transport in the 1990s.
- East coast:
Dominican distribution, west coast: Mexican (2/3)
- Most of the
product is funneled though a small number of wholesalers.
Crime in producing societies:
- Cocaine production
is typically carried out in laboratories close to the coca fields. Coca
leaves are soaked in chemicals--alcohol, sulfuric acid, etc. Sodium carbonate
is added to precipitate out cocaine hydrochloride, and then washed with
kerosene, or gasoline--basuco or coca paste (90% pure). (See, Faupel, et
al, 2004, page 288)
- One-half grown
domestically, one-quarter from Mexico (main source prior to 1969 and "Operation
Intercept), one-eighth from Columbia, and one-eighth from other sources.
- Canada (British
Columbia) a growing source
- Main producing
states: Indoor--CA, FL, OR, WA, WI; Outdoor: HI, CA, KY, and TN.
- $200,000 per
year from indoor, 5x10 foot plot.
of "self-regulating" gardens
- Hi-tech detection
- Drug most
likely to be produced by consumers
cannabis cultivation and trafficking. Chapter 12 of A
cannabis reader: global issues and local experiences, EMCDDA, Lisbon,
June 2008 (local
copy in .pdf).
production and Mexico
- Pre 1990s:
Biker gangs, now Mexican and independents
- 1994: 263
labs seized. 2000: 1,800 by DEA, 4,600 by local police
- 2004: Canada
and Southeast Asia getting into networks
- Western European
sources (Belgium and The Netherlands)
- Shipped through
Canada and Mexico
- A few labs
in USA (7 seized in 2000)
- Costs 25 to
50 cents to manufacture one tab, street price: $20-$30 (9 million tablets
seized in 2000)
- 10-20 labs
(CA and Pacific Northwest) supply most of USA (see, "The
sell LSD crystals to "trusted associates." These few sell to wholesaler.
- Crystals converted
to liquid: blotter acid, vials, "window pane."
seller to user Transactions
on the street: Bruce Johnson's work
and Ohlin (1960)--criminal, delinquent and retreatist gangs (not very
- Levitt and
Venkatesh (1998): records of a Black, inner-city gang
wage: $6 per hour, after 4 years: $11 (1995 dollars)
better pay (like any corporation, $32--over 4 years: $97)
wages tripled too, $2.50-$7.10)
value of membership, and promotion--leaders rule.
workers--access to legitimate jobs, yet stayed with gang as wages
- Bourgois, In
Search of Respect: Selling Crack in El Barrio. (1995) (study 1985-1990)
use and dealing: social marginalization and alienation
Puerto Rican, 40% African-American
poverty. 40% welfare benefits of some sort
declared no wages
benefits, but (and) unregulated by the state
of legitimate labor market--biased and dehumanizing
clashes (street vs. office)
life becomes alternative to marginalization
street culture provides alternative, yet make the necessity of
an alternative more pressing--participation further marginalizes
- Drug use
for Bourgois: epiphenomenon--racism, classism, and criminality are the
- Issue: legalization
as solution? Bourgois ignores alcohol and tobacco. Again we see enormous
profit, yet outside the local community.
- Class and ethnic
styles of dealing
- 50% of incarcerated
drug offenders, Black, yet drug use consistent across racial/ethnic groups
scrutiny (DWB) centered on minority status
racism versus overt CJS bias:
drug workers--more likely to be Black. Mid and upper-level dealers,
more likely to be white.
Johnson, et al (1994):
dealers: likely to be Black, public space, sell to strangers,
small quantities, high volume.
chance of violence
rate of detection and arrest
dealers: most likely to be white, steady customer base, private/indoor
setting, larger quantities, semi-periodic transactions, violence
probability of arrest
IV. Factors that
facilitate drug trade
demand and price inflation
- French Connection
(1972): opened up heroin marketplace in USA. Diversification and decentralization
- Collapse of
Soviet Union. Totalitarian/authoritarian political systems can control individual
- Free trade
of new centers for production
- Economic privatization
- Free trade
(China's port cities)
- Money Laundering
number of private banks
of global inequality: poor to grow the crops, poor to deal the drugs on
- Get rich
- Local Governments
(Mexico--pre 2000 and Vicente Fox)
Habit: Drug Abuse, Drug Trafficking, & Organized Crime, President's
Commission on Organized Crime, 1986.
Profits from Drugs (PBS)
Drugs, and the CIA (PBS)
Owner: Robert O. Keel email@example.com
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Wednesday, January 11, 2012 4:49 PM