This is the Cato Daily Podcast for Wednesday, March 2nd, 2016.

I'm Caleb Brown.

In his new book, Narkanomics, Tom Wainwright examines the incentives, the competitive pressures, and the government

impediments faced by drug cartels.

In doing so, he reveals that they follow the same economic rules that govern businesses in

any other field. We spoke today.

It seems like the worm has begun to turn when it comes to the war on drugs in the United States a little bit but definitely when it comes to

international efforts to try to shut down drug trafficking and the production of narcotics overseas.

For those people who still believe, which I hear occasionally, we really haven't, we just really haven't tried we haven't tried

hard enough to eliminate the drug trade what what do you tell those people well I

think what I tell them is that if you look at the economics of the business it's fairly clear that it's not just a question of pushing harder on the same thing

it's the problem is that we're really pushing in the wrong area and specifically I think the mistake that we've made for many years now

is to focus very heavily on the supply side of this business when in fact I think if

we're to maintain prohibition then the demand side would actually be the more effective

place to push.

And if you look at the business of cocaine, for instance, what you see there is that

what we're trying to do is raise the price of cochleif in South America.

The idea is that by raising the price of cokeleif the price of cocaine will go up and so people

will consume less of it in the United States and in Europe and other consumer countries.

But when you look at the economics of the business, it's fairly clear that that's not

going to happen. The cost of all the leaf that you need to make a kilo of

cocaine is about four $400 in Colombia.

...