M A M A    C O C A
Mama Coca Home

The Economy of Narco-Dollars: From Production to Recycling of Earnings

Pierre Salama[*]

Published in International Journal of Politics, Culture and Society. Vol. 14, No 1, 2000

For an economist, the problems presented by the production, sale, and, use of drugs both reveal the limits of his discipline and strongly encourage the study of such problems, The object of study is poorly defined, its measurement is to say the least, difficult and often 'folkloric', the behavior of the dealers is relatively unknown, and their possible change in status is difficult to determine.

The object of study is poorly defined precisely because its definition depends on a prohibition that varies according to the country and period of time. The consumption of coca leaf is authorized in certain countries, but forbidden in most. Trafficking is prohibited in certain countries, while the use of drugs is not repressed in others. The amount of variation is considerable and little is known about its modalities: the differentiation can be horizontal or vertical, according to the kind of products and above all to the degree of purity, which itself varies according to the forms of repression and the fluctuation in prices. Quality therefore is difficult to assess, the variation not being defined before the act of sale by the dealers. Likewise, little is known about substitution in products, which depends upon the differentiated change in prices, the amount of dependency, and the changes in the cultural context. The rapid rise of synthetic products-new chemical cocktails-is significant; their use has substituted in part for the use of natural drugs, which are made from plants converted by the help of chemicals, and they are often mixed with these natural forms. The distinction between what is medicinal(thus legal because administered by prescription) and what is not, is not always an easy one, especially if these substances help increase performance, such as speed and endurance. The professionalization of sports and the extraordinary commodification of this domain leads naturally to the "doping" of athletes, Drugs become, therefore, a part of the reproduction of the workforce of athletes. The strong inflow of these substances is revealing of profound societal problerns, but also of the difficulties that arise in defining what is a drug and what is a medicine and of the limits and often arbitrariness of the law. These represent old problems since they were encountered many times during the international discussions concerning legalization at the end of the last century ( concerning opium primarily) and at the beginning of this one. But there are also new problems in this debate, since it is now a question of synthetic substances the short- and long-terms effects of which are difficult to determine on the health of those who try multiple cocktails composed of more or less mysterious substances.

Measurement is imperfect mainly because it is a question of substances whose production, conversion, and commercialization are illegal and whose estimates, as we will see, are often "folkloric," These estimates are all the more arduous to make, since the organizational structures of commercialization, in its different stages, are formed within the networks of informal activities that act as their support, and they themselves take on the aspect of changing and diverse networks-far from the image given by the press when it evokes this or that cartel. Paradoxically, we can obtain an estimation, or more precisely a macro-economic range, which is credible in regard to the production of drugs and its value, On the other hand, the estimation of sums that are repatriated and directly attributable to the se criminal activities is more problematic.

The behavior of drug dealers is difficult to define and to judge. The increasing opening up of economies, as much at the level of the ex change of merchandise as at that of the movement of capital, facilitates the exportation of illegal substances and makes the laundering of money apparently easier. Paradoxically, however, it also raises their cost, as we shall see. The beginning of deep crises in numerous ex-socialist economies "in transition towards capitalism" (what used to be called "emergent economies"), the maintenance of quasi-autocracies of certain Asiatic regions (be it in countries like Burma or regions grouping several countries together), apart from the nature of the illicit commerce itself, tend to multiply the supply precisely when the demand in some of the most developed and important countries tends either to stagnate, to regress, or to diversify towards more synthetic substances, and when the efficiency of repression seems to increase at the level of confiscation, This behavior is even more difficult to assess when it is a question of determining the amount of money repatriated into the countries of production, At what level in the chain of commercialization (wholesale, semi-wholesale, retail) does this behavior cease? This is a thorny question, since we know there are multiple factors that increase the particularly high prices between the cost at the production, wholesale at embarkation, semi-wholesale and retail levels. At precisely which point in the equation does arbitrariness begin to enter, when we posit a hypothesis that the prices upon which we will base our estimation of possible repatriation are the wholesale prices at arrival for cocaine, whereas we rely on the wholesale prices at departure for heroin, for Colombian drug dealers? Finally, beyond this question, what constitutes this repatriation?

The techniques of laundering, as sophisticated as they are, cannot circumvent one essential question, that of the status of this money. What legitimizes the possession of large sums of clean money? The response to this question is fundamental and outlines the limits of the search for "notability" by drug dealers, To the extent that it seems easier in many countries with lax legislation to "legitimate clean money" when it is used in construction, building speculation, or land purchase, we understand the preference the drug dealers have for these activities and these countries-but also the difficulties they have in transforming themselves into "bourgeois industrialists," The first purpose of this article is to outline the problems raised by the commercialization of illicit "natural substances," Secondly, it is to present the different techniques that permit the repatriation of dirty money and its laundering, and then to assess the importance of these acts of repatriation of funds from a macro-economic point of view. Lastly, the article proposes to analyze the behavior of the Mafia entrepreneurs.

[*] Profesor, University Paris XIII, Greitd-Cedi (salama@seg.univ-paris13.fr). 

Favor compartir esta información y ayudarnos a divulgarla citando a Mama Coca

Mama Coca Home Contra la Guerra Química y Biológica Enlaces Contáctenos