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Friday, January 14, 2022

Narco Submarines and the Strange Economics of Cocaine Smuggling


Simon uses 'street value' of the drugs to show how much money is being made. If we figure 100% markup at each stage of distribution and you figure 6 or 7 levels of distribution between the producers and the street dealers, then the producers are getting like 1% of the street value, packers and loaders get 2%, shippers get 4%, receivers and national wholesale distributors get 8%, regional distributors get 16% and local distributors and street dealers can fight over the remaining 70%. The last group may be getting the lion's share of the money, but there are zillions of them, their individual volumes are small so each one isn't making all that much money. There is a lot of competition at the retail end of the business which might be why the homicide rate is so high in big cities. I mean, if you have a dispute with another drug dealer, you can't very well complain to the police, can you?



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