The Economics of Drug Sales On the Dark Web

HughPickens.com writes: Allison Schrager has an interesting article about how marketplaces for contraband drugs have only existed for about four years on the dark web, but they've made inroads fast. About 10%-15% of drug users in the U.K., U.S., and Australia [are believed to have] bought drugs off the net. According to Schrager, these marketplaces look remarkably similar to normal online marketplaces. Users leave detailed reviews on the quality of a vendor's product, speed of delivery, and how secure the shipping method was. There's information on where vendors are located and where they'll ship to. Some even post their refund and exchange policies. Purchasing meth from a dealer in the Netherlands feels as familiar and mundane as buying sheets from Macy's. The dark web makes transactions safer.

All the same, there are risks that Macy's customers don't run. Because there's no legal protection for illegal purchases, the bitcoin payments sit in escrow until the goods have been delivered and both parties are satisfied. That exposes the seller to exchange-rate risk, because bitcoin is an extremely volatile currency. And there is one other big source of risk: the point where the virtual world of the dark web and the world of physical reality intersect. In other words, getting drugs delivered. Certain drugs like MDMA and LSD may move mostly online. And the web may become the preferred source for affluent users and small-time pot dealers.

Comments

Re:The War On Drugs is a War On Sick People

[drinkypoo]

You don't really want crack to become legal do you?

It's not that expensive to produce, so if it were legal, there would be much less incentive to commit crimes since it would be much less expensive. The same argument applies to basically all drugs. The only reason people traffic them in spite of the often significant risk is because making them illegal has driven up the prices and the rewards are also significant.

If you give addicts enough drugs to OD on, then eventually they will either do that or find a level of addiction which they can manage, or even improve their lives and eventually kick the habit. Regardless, for the really dangerous drugs, drug addiction tends to be a self-limiting problem if you're not busy exacerbating it. When we make them illegal we simply create vicious cycles which lead to more drug use and more crime. How does that help? The best way to reduce drug use is to treat addicts like they have a health problem, not to treat them like criminals. That helps prevent them from becoming criminals in the first place.

How we treat criminals is also unfortunate, but probably outside the scope of this conversation — suffice to say, it's doing nothing to help us "win the war on drugs".