The money used in illegal drug trading is one of the only truly liquid forms of capital, this makes that money an important aspect of the global economy, so how much do governments, banks and businesses continue the war on drugs with only prohibition.
Illegal drugs however may be a fundamental part of the economy and the war on drugs is to maintain the trade, not to destroy it.
Alcohol and tobacco are both regulated drugs and there are heavy taxes put on them, illicit drugs however are unregulated, this makes them more dangerous and profitable, as all the money made from the sales of these substances goes to the producer.
Illegal drug trade plays a massive role in the global economy, international laws and money laundering, move the illegal drug economy forward, while banks and governments do play a role in the stream of illegal drug money and its effects on the economy.
The way a capital economy works is that in order for it to grow, money needs to be moved around within the system, illegal drug trade perfectly fits this system as money is always changing hands from the producer to the mule, courier dealer and eventually consumer, this movement of money is very fast and it is easy as hard cash is the most liquid asset that can exist.
The entire global economy is continuing to benefit from illegal drug trade, this keeps drug producing countries and “narco states” in a vicious economic cycle, forcing them to continue to produce drugs to keep their economy running.
This displays the big flaws in our economic system, the way to end illegal drug smuggling is to establish an economic system that is not dependent on illegal and black cash when normal function fails. A sustainable economy must not be based on unsustainable exploitation of weaker nations and illegal practices.
Year 11 MHS Economics 2020 