Executive Pay: The Curious Case of Carlos Ghosn’s Arrest
February 12, 2025
Globalization gone too far? Many experts believe that the pace of globalization had accelerated so much in the period starting from 1990 to 2007 that the global economic crisis that happened in 2008 revealed the drawbacks of too much integration, interconnection, and interdependence. This is seen by many as the inevitable consequence of globalization going […]
How Automation Benefits the Logistics Sector through Efficiencies and Synergies Automation benefits the logistics sector in many ways. Right from order booking and package handling in warehouses, including transit and shipment that is enabled by automated modes, and tracking and delivering the materials, automation can increase the efficiencies and synergies of the entire supply chain. […]
Enter Low and Middle End Segments of the Market It has been found that many multinationals find their sweet spot in emerging markets when they cater to the lower and the middle end of the market segments. In other words contrary to popular perception, multinationals find that selling to these segments is much better than […]
In any Supply Chain, Inventory Management and Warehousing form a part of operations intensive function and is one of the key building blocks in the entire chain. Most of the inventory is held at the warehouses as compared to the pipeline, and the efficiency of the warehouse operations will determine the further supply chain efficiency. […]
The costing module is one of the important controlling modules which enables effective internal cost control and accounting. All functionalities regarding cost analysis and cost allocations are provided by this module. The cost accounting module is highly integrated with budget and general ledger modules as well as draws input and provides output to various logistics […]
Drugs have been a moral menace to many societies for many years. Right from the time, the British East India Company corrupted an entire Chinese generation to the modern world where this epidemic is destroying South American nations, the curse of drugs is causing mayhem. This has led many governments in the past as well as the present to outlaw drugs and pass laws which completely prohibit their usage. If economic history is any proof, the effects have been anything but satisfactory.
The scourge of drugs has only increased in nations where strict prohibition laws were enacted. Stricter laws only turned the common man into smugglers since more scrutiny meant a higher price and therefore a bigger incentive to break the law.
Drug prohibition only makes the business more lucrative. Firstly, the government has to spend an enormous amount of money in building infrastructure to prevent drug usage. This is economic wastage as the resources being utilized here could be put to better use for more productive purpose within the country.
Moreover, law enforcement just leads to more corruption. Drug smugglers just bribe their way into the system. More law enforcement expenses lead to a higher price for the drug. As profits soar, more and more people get involved in the drug trade. Many economists like Milton Friedman have explained why an all-out war on drugs can be counterproductive and may end up increasing the drug menace.
Economies, where drug production and consumption is on a high, are also prone to excessive violence. Most of this violence occurs in the young age group who are capable of working, In the absence of such violence, these people would be working and hence the Gross Domestic Product of the nation would be higher. This would translate into higher tax revenue and hence more prosperity for the nation.
A war on drugs leads to an exponential rise in violence as can be seen from the case of countries like Columbia. A higher homicide rate is an economic detriment for the state as businesses do not want to invest in such places and hence investments are lower.
A war on drugs means smuggling drugs becomes increasingly difficult. As a result, the safety and the standard of the drugs keep on deteriorating. This has an adverse effect on the drug users. Since the users are addicted to the drug, they do not reduce consumption of the drug. Instead, they maintain their normal consumption level. As a result, medical emergencies increase. Once again the resources of the state as well as of the people are redirected towards wasteful expenditure.
Countries facing drug menace also have a lot of people in jail. This is the result of law enforcement expenses that we discussed earlier in this article. However, once people are incarcerated, the expenditure only increases. Maintaining a huge crowd of violent prisoners is an expensive affair. This has led many countries like the United States to privatize their prisons. Countries like Holland where many drugs have been legalized pay a far smaller number of their taxpayer dollars to maintain prisons. It needs to be understood that state cannot control people’s activities for better or for worse. If people choose to get addicted after knowing the dangers and tribulations, then it simply is their own choice.
Drug problems do not strike out of the blue. There is clear cut economic signals that precede the rising of a narco-state. The first and most obvious sign are rising poverty and unemployment. The youth of any country need to be gainfully engaged in the economic world. If such opportunities are not present, then it is highly likely that such youth would turn to criminal enterprises.
Hence, a better way to wage war on drugs would be to wage war on unemployment. Without the foot-soldiers who move drugs on a day to day basis, the system would simply collapse. Market forces are stronger than government decree in eradicating the drug problem.
The state proclaims that eradicating drugs is their number one priority. However, in many cases, law enforcement officers are making huge sums of money from this corruption. The last thing they want to do is get rid of the drugs. Since they do not have any incentive to eradicate the drug problem, it makes more sense for them to prolong the crisis and earn as much money from it as they can. This creates a bizarre scenario wherein, on the one hand, the government claims it wants to eradicate drugs and on the other hand, their own officers behave in a contradictory manner.
Countries have found that rehabilitating drug users is a much cheaper and much better way. Only people who are disappointed with their lives and have no purpose get habituated to drugs. Countries, where these people were provided a loving environment and a purpose to their life, have seen a massive drop in the drug usage rates. All this without any threat of violence or without redirecting economic resources to make this the government’s number one priority.
Your email address will not be published. Required fields are marked *