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Key Points
The war on drugs is a critical issue for many countries, and it is often discussed from medical and legal perspectives. However, in his article, Wainwright (2016) addressed it from the economic point of view. The author focused on such key points as supply, demand, elasticity, and production cost. The drug problem became more crucial than ever at the end of the 20th century and remains on the same level today. Even though narcotics are illegal, they turn out to be a part of a “$300 billion worldwide business” (Wainwright, 2016, para. 1). Wainwright (2016) considers that the situation fails to improve because the governments fail to recognize it as a market problem.
While dealing with the drug issue, the representatives of the government focus on the supply restriction. As a result of these actions, it turns out to be more difficult to prepare a product and deliver it to customers (drug addicts, in this case). The reduced amount of narcotics makes them more expensive while demand remains the same or even increases because addicts are ready to do everything to get substances they need. The government believes that such initiatives lead to the condition when fewer people become able to buy the product, as its price increases. However, these changes make addicts conduct more crimes to obtain drugs or cause their deaths. Thus, it can be concluded that elasticity of the demand for drugs is hardly observed.
The consumption of narcotics experiences no substantial changes to claim that the restriction of supply is a good initiative that can be used in the war on drugs. In this way, when the government increases the prices for narcotics, the value of this market only increases. A number of drugs sold by dealers do not reduce much, while their costs become high. On the basis of this information, it can be presupposed that the reduction of demand is the best way to overcome the drug issue. What is more, the cost of drug production is often much cheaper than the cost of the very product. Focusing on those interventions that are targeted at the minimalizing of demand, the government is likely to obtain an opportunity to save costs, because they tend to be cheaper than those connected with supply.
As drugs are sold by numerous dealers, they can be discussed in the framework of perfect competition, which presupposes that this market can be easily expanded. Making the entrance more difficult, it is possible to lead to those forms of competition that presuppose the existence of a few dealers. Even though it is not yet a way out, it is much easier to control a couple of drug sellers than thousands of them (Hayes, 2017).
Application of an Economic Concept
The war on narcotics should not stop because this issue worsens people’s well-being. In this framework, it seems to be beneficial to focus on the reasons people start using drugs. In many cases, addiction turns out to be an outcome of unemployment. Losing their jobs, the representatives of the general public face difficulties in life. They feel frustrated because of the inability to maintain a normal way of living and try to comfort themselves in different ways. Unfortunately, a lot of them resort to drugs in this case. What is more, some individuals start looking for those jobs that are highly paid and are not demanding to the employees. As a result, they start selling or delivering drugs. In a similar way, people lend money from those who are involved in the drug business and soon become engaged in it as well. Like many other people who are connected with such affairs, they start using drugs themselves due to the environment and relative simplicity of getting a dose. Moreover, those people who begin using narcotics tend to lose their jobs. They become not able to cope with their duties anymore, as they are physically and mentally affected by harmful substances.
The research study conducted by Compon, Gfroerer, Conway, and Finger (2014) proves that “the higher rates of past month tobacco and illicit drug use, heavy alcohol use, and past-year drug or alcohol abuse/dependence were found among the unemployed” (p. 350). In this way, the fact both demand and supply of illegal drugs are mainly formed by the market of unemployed individuals. The government should develop initiatives to minimalize drug consumption focusing on these people. The reduction of unemployment is likely to minimalize the use of narcotics and almost close this business. Reduced demand and supply will affect elasticity as well. Providing people with jobs, the government can ensure that they do not try producing or selling drugs, which prevents the development of the business.
The concept of unemployment is significant for the US economy because it affects individuals, society, and the country. People can hardly meet the standard of living because of serious financial troubles. With the course of time, an erosion of skills can be observed, and the USA will not have enough talents. The gap between the representatives of the general public will affect immigration and will make the country less attractive for the tourists, which is a wide-spread industry in the USA. Increased unemployment rates will make the government provide more benefits for deprived populations, which presupposes higher taxes.
Thus, the information provided in the economic article is true to life and should be supported. Drug addiction is an issue that affects various spheres of life, and it should be addressed from all possible perspectives. Discussing it as a market that has particular issues, the government can reduce demand for narcotics, ending their usage and minimalizing unemployment rates.
References
Compon, W., Gfroerer, J., Conway, K., & Finger, M. (2014). Unemployment and substance outcomes in the United States 2002-2010. Drug and Alcohol Dependence, 1, 350-353.
Hayes, A. (2017). Economic basics: Competition, monopoly and oligopoly. Web.
Wainwright, T. (2016). How economists would wage the war on drugs.The Wall Street Journal. Web.
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