Photo: Associated Press
The price of cocaine has dropped 80 per cent since 1982 and continues to fall because drug dealers have found better ways to produce and transport the drug.Brian Palmer of Slate.com attributes falling cocaine prices to economies of scale. As the business gets bigger, the model gets more efficient. While dealers had to use suitcases to smuggle the drug in the 1970s, they eventually upgraded to planes, submarines and cargo ships.
They also figured out how to spread risk: for a 10 per cent fee, seized drugs were replaced. Gun violence is down, whereas in 1990, 33 per cent of the cost was to compensate dealers for risk of violence.
In 2007, a gram of cocaine cost $140, Palmer reports. The price continues to fall even with the cost of stricter drug enforcement because the model is so much more efficient.
If the budget-strapped U.S. loosened up on enforcement, the price would tumble even more.
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