Again what would stop those countries or even companies here from outsourcing to the cartels.
Transaction costs, productivity, quality.
Cartels do not just sell drugs, they are not the illegal drug version of Anheuser-Busch.
You are correct! Due to the illegality, they are far more "active" (in regards to process management) than Anheuser-Busch. Cartels are also less likely to follow the law:wow:
The vast majority of times stolen and illegal goods are much cheaper than their legal counterparts. Here in the US a preban machine can get expensive due to availability, however those bans do not exist to criminals organizations and in certain countries.
This is a constant aspect of criminality. Sometimes it is cigarettes, other times it is jewelry. But just so it is clear; there is still theft in illegal drug markets. I am going to assume the current "black market" level exceeds a legal and regulated level. Why? Calling the police to report stolen cocaine receives only a negative response.
And it will continue to be their significant source of income.
Agreed. Now there will be less "traffic" in prisons, courtrooms, and squad cars. More police available (because they are no longer looking to bust minor drug sales) to address theft. Not just for the theft in hard drugs, but everything that is stolen. To claim theft will increase in proportion to the drug industry is impossible to support.
Is the government going to grow the stuff and hand it out for free or for a dirt cheap price?
Why would it? They can however tax it (being ever so careful not to tax it back into black markets).
Yes they would.Unless the federal government is growing and making the stuff themselves and handing it out for free or for a dirt cheap price the cartels are still going to make lots of money. Because the price of those drugs are not going to magically drop,so there is still lots of money to be made from it. Did the price of pot magically drop in states with legalized medicinal marijuana? From what I understand it didn't.
The cartels will be phased out (long term) via innovation and new equilibrium pricing schedules (supply determinant). One of the current issues is purity; people really do not know what they are getting. A regulated industry would eliminate the majority of these instances (reducing overdose, poisoning, hospital visits) through competition. The cost of producing an ounce of pure heroin is nowhere near its illicit market price (greater than $2k/oz). Sheer competition will bring down these profit margins. Other cost aspects such as intercontinental trafficking (soldiers, subs, airplanes) would phase out in favor of less costly, and more efficient means.
Tell me what business you know of has a 1000% profit margin.
The violence here in the US usually only affects those who deal with the stuff so I am not worried about it.
Yet you complain about taxes. The war on drugs (and the violence associated) cost more than $20 billion last year. With great results signaling money well spent. So yes, you are paying for it one way or another.