Perhaps. But there are ample reasons to be skeptical. For example, even as coca production declines in Colombia, it is on the rise in neighboring Peru, which had been hailed as one of the “supply side” successes in the mid‐ and late 1990s. Moreover, there are signs of increased coca production in several of Colombia’s neighbors, such as Ecuador, Venezuela, and Brazil — countries that up to this time have not been major factors in the drug trade.
That raises the question of whether coca production overall has suffered a blow or whether the U.S.-sponsored efforts in Colombia have merely caused production to shift to other locations. It would hardly be the first time. In the early 1970s, the Nixon administration put intense pressure on the government of Turkey to eradicate the cultivation of opium poppies (the raw material for heroin). The effort seemed to be a success, as the quantity of heroin coming out of Turkey plunged. But Mexico promptly replaced Turkey as the leading supplier of heroin to the United States, and the amount of the drug coming into this country scarcely declined at all.
A similar pattern occurred again in the mid‐ and late 1970s when the United States pressured Mexico to crack down on the marijuana trade. That country soon ceased to be the leading source of marijuana to the American market. But Colombia immediately supplanted Mexico as the primary source, and there was never a marijuana shortage in the U.S. market. Furthermore, when the anti‐marijuana campaign in Mexico receded at the beginning of the 1980s, that country quickly resumed its status as the leading supplier to American customers.
Perhaps the most telling reason to view Washington’s latest claims of success with skepticism is the street price of cocaine in the United States. If the supply of the drug was truly being disrupted, there should be a major price spike. But nothing of the kind is happening. Instead, the price has remained steady — and low. In some places it can be bought for as little as $20 per gram, significantly less than what it was selling for just a few years ago. That confirms that supplies are plentiful.
Even within Colombia itself there is less to the supply‐side victory than it first appears. There have been two extremely unpleasant side effects. First, the crackdown on the growing of coca crops has driven thousands of Colombian farmers back into poverty. Farmers can earn up to 10 times as much growing coca as they can any other legal crop. Needless to say, they are not happy about having their source of income destroyed, and many show new sympathy for leftist guerrillas that are battling the government of President Alvaro Uribe.
The campaign against coca also has enabled a competing drug crop — opium poppies — to flourish. As the Colombian government responded to U.S. pressure to eradicate coca, aerial spraying campaigns against poppy fields declined. The result is a bumper crop of poppies. Colombia (along with Mexico) has now supplanted Asia as the leading source of heroin entering the United States. Once again, the street price underscores the failure of Washington’s anti‐drug policies. Retail heroin prices are generally lower than they were in the mid‐ and late 1990s.
The latest boasts of success coming out of Washington are likely to prove as unfounded as the previous ones. U.S. officials keep defying the most basic economic law: supply and demand. The reality is that as long as there is substantial demand in the United States (and other countries) for illegal drugs, there will always be potential suppliers willing to incur the risks entailed in reaping the lucrative black market premium. Supply side “victories,” therefore, will always be fleeting illusions.