Tuesday, October 30, 2007

Which of our Global Wars Is More Important?

The War on Drugs or the (legitimate part of the) War on Terror? This recent post at Back Talk suggests that the Administration has placed the War on Drugs ahead of the War on Terror in Afghanistan. That sounds about right.

Of course, they'll tell you that in this case the two are intrinsically linked- by fighting the War on Drugs, they'll say, we're depriving the Taliban of their funding and thus fighting the War on Terror. But, as usual with the War on Drugs, this argument fails Econ 101. For the millionth time: drugs (especially opiates) have inelastic demand; this means that the more you restrict supply, the higher prices go- but with almost no effect on demand. When you have higher prices combined with high demand, you have what might be called a lucrative business opportunity. By fighting the War on Drugs in Afghanistan, all you are doing is increasing the profitability of the opium trade; since the Taliban appears to be getting more and more into that trade, you can pretty much rest assured that the reason they are doing so is because of the high profitability brought about by the War on Drugs. Moreover, the Taliban are already fighting a war to begin with, so fear of drug enforcement officers isn't exactly going to affect their willingness to engage in the opium trade (meaning that, over time, the Taliban will gain an increasing market share of the opium trade- not a good thing).

I know, I know, unintended consequences are a bitch.

(Hat Tip: To The People)