ECONOMICS OF EVERYTHING

SECTION A

• What is your topic? We are covering the economics of the black market of narcotics / the war on drugs.
• Why did you choose it? We chose this topic because it is very important and it is very easy to compare it with our economic knowledge.
• Why is it significant? Drugs have a large and widespread affect on the world. From the poor to the rich and north to south, every nation has been affected by drugs somehow

SECTION B

• Drugs are just commodities, the drug trade is a multinational industry and therefor is subject to the same economic concepts as a legal market
• Supply: Various different groups supply narcotics to the west for profit
• Demand: Drugs are a commodity, both developed and developing nations consume a lot of drugs.
• Utility: Both the supplier and consumer/demand gain utility. The supplier gain utility from his/her profits and the consumer/demand derive utility from the drug and feed their habits
• Cost benefit analysis: the people supplying and selling narcotics value the money they are getting more than the drugs they are selling. The "consumers" value the narcotics over there money .

SECTION C

• The underground drug market runs on austrian economic principles. All drug supplying/selling "businesses" are privately run and they don't get taxed. The government interferes with the market (ie. drug busts) but can't regulate it the same way it like any other market.

SECTION D

• Most narcotics are illegal in most countries, however the drug trade still thrives underground. Regulation is put in place against narcotics to address the market failure of negative externalities. Drugs can have terrible and lasting effects on people and communities.
• The war on drugs creates more negative externalities then the drugs themselves in most cases
• Technology has undoubtedly made production and distributions of narcotics much easier as machines help cultivate and preserve the supply and enhancements also improve the modes of transportation

SECTION E

• The underground drug trade, like any other market, goes through periods of booms, bubbles and busts for various different reasons
• As the world goes through times of economic downturn (Great Depression, Great Recession) consumers spend less money on commodities, including narcotics, decreasing demand in the commodity market as more people put their money towards essentials. During an economic boom, people are more willing to spend their money on commodities, increasing demand.

SECTION F

• It has a big role in the global economy especially in developing countries with little to no infrastructure and easy access to raw drug materials
• Trade/travel with narcotics is highly illegal and global trade has only made it more readily available
• Definitely, a lot of developing countries make a larger income off narcotics, whether its production or sale, some base their life off this income. Those in developed countries are generally the ones consuming and abusing narcotics as they have enough freedom to do so

SECTION G

• Economic knowledge has made it much easier to break down the topic, it has made it much easier comparing and contrasting the different variables and their impacts and roles when it comes to the Black Market of narcotics

BIBLIOGRAPHY

• “Drug Economies of the Americas.” NACLA, nacla.org/article/drug-economies-americas.
• Humphreys, Adrian. “Black-Market Economics: Why Traffickers Will Risk Everything to Smuggle Drugs into Canada.” National Post, 25 Jan. 2015, nationalpost.com/news/canada/black-market-economics-why-traffickers-will-ri....
• Muggeridge, Paul. “This Is How Illegal Drugs Flow Around The Worldj.” Weforum.org, www.weforum.org/agenda/2015/06/this-is-how-illegal-drugs-flow-around-the-wo....