The End of Drugs

He looked around forlornly at the empty warehouse. What had once contained fifty million dollars worth of high-grade, street-ready drugs, and a state of the art laboratory, now sat idle, strewn with empty cartons and nothing more. “Globalization”, Gino said, shaking his head.

It had seemed like a good idea at the time. The drug business was risky, dangerous, and horribly inefficient. The Deal promised to make it easy, even respectable. The big players would all get together, agree on prices and territories, and buy together from the farmers and syndicates in Colombia, Afghanistan, Burma, and the other producing countries. No more wars, bloodshed, or flooding the market with cheap product. No more haggling with the producers — at the wholesale level, the Syndicate would be the only game in town, and they would buy only in tonnes, at a price just high enough to keep the producers in business, but not high enough that they could afford to get out of line. With their global reach and depth, the Syndicate could play producers off against each other, buy from the cheapest country, and hence reduce costs and increase ‘productivity’ every year.

It worked for awhile. The deals they struck cut allowed them to cut street prices in half while actually increasing the Syndicate’s margins. And the quality and consistency of the product got so good that business picked up, and the government slacked off a bit. Then someone had the idea of going to the government and making a deal with them: The Syndicate would be ‘licensed’ to carry on their business, would pay the feds a license fee and agree to maximum quantities of each drug in each city. They would also guarantee product quality and to keep the retailers on the street in line — no violence, no turf wars, no criminal sideline activities, no gouging the strung-out customer. In return there would be no prosecution and no harassment — they’d be as legit as the corner liquor store. Despite the huge mutual distrust and the outrage of conservatives, it seemed like a no-brainer, and The Deal was struck.

But then things started to unravel. It turned out controlling the guys on the front line wasn’t so easy. With the wholesale price halved, it was just too tempting for the retailer to keep some of his cost savings, and prices started to rise again. That caused some price wars which led to renewed violence. A lot of the pushers bailed out of the business entirely — no thrills, and no respect just being a dumb middleman told exactly what you could sell at what price and to whom. Might as well work in Silicon Valley, where you got the same deal with air conditioning and a pension.

At the other end of the supply chain and the globe, things were also going awry. The suppliers, squeezed by the Syndicate on price, were either starving or cheating. They sold to the crime lords from struggling nations for 50% above Syndicate prices, and soon the Syndicate was facing new competition from rough, disorganized, and extremely violent gangs. Most of these gang members were illegals, outcasts from their own families and countries, strung out on their own product, with nothing left to lose. True desperados. Dealing with them was more dangerous for the Syndicate than dealing with their former competitors, or even with the narcs.

What was worse, with profits constrained, the producers were limiting what they produced to what they know they could sell — there was no place to sell surplus product, so surpluses were eliminated as the producers turned their land and labour to other products that were not so price-constrained.

And then the government started to get pushy. They wanted the Syndicate to reduce supply each year, develop less addictive products, even counsel their customers about the dangers of their product. License ‘fees’ rose. Big Pharma lobbied and won licenses to produce equivalent synthetic products to those the Syndicate’s suppliers produced, creating a whole new set of competitors with retail outlets and marketing budgets the Syndicate couldn’t match.

Then the retailers started to organize. They formed their own buying group and negotiated better prices from the Syndicate, and began to run other, illegal, coordinated businesses using different front men. The feds demanded the Syndicate crack down on them. The Syndicate insisted ‘their’ people were all legit and playing by the rules. Violence, tempers and arrests flared up again.

And, as the conservatives warned, the increase in supply created an increase in demand, and soon addiction rates soared. The government was pressured to renege on The Deal, but instead mounted a propaganda campaign to lay the blame on the Syndicate and justify some spectacular busts, well-covered by the media, that changed nothing but made the government look like it was managing things, and made the Syndicate feel used.

More and more of the world’s struggling nations, desperate to find a cash crop that could compete with the huge North American and European agricultural subsidies, switched their fields from food to drug crops and, by employing children to harvest them, undercut the traditional supplying nations while making food so prohibitively expensive for their own people that starvation, malnutrition and disease rates ballooned. The Deal was affecting much more than the availability and cost of drugs.

Then just as everyone thought the situation could not get any worse, it did. The Fungus hit the crops all over the world almost simultaneously. Because of low prices, and desperation, producers were planting and then neglecting poor quality stock in even poorer, contaminated soils. Some of the stock was infiltrated by sterile, genetically manufactured strains. The entire system became extremely vulnerable, with only just enough produced to meet current cut-price orders. When The Fungus hit, supply fell suddenly to 10% of street demand.

For everyone in the ‘industry’, this was something new. The whole world believed in the market economy, the law of supply and demand. And now that drugs had been legitimized and brought under the forces of the market, surely the supply would always be there? But as global warming whipped up sandstorms in dry nations and monsoons in wet ones, drought and The Fungus combined to reduce supplies to the point most producers just gave up and abandoned their emaciated crops. Big Pharma was already operating at capacity, and the synthetics were more expensive and produced an inferior high to the ‘natural’ products. And the synthetics, full of the by-products of the chemistry lab, also had far more side-effects, and their long-term toxicity was not really known.

So suddenly the streets erupted in rage, as desperate addicts attacked their suppliers, convulsed with the symptoms of withdrawal, and sought out any alternative concoctions to numb the agony. There were huge increases in poisonings, suicides, murders of family members and complete strangers, heart attacks and other diseases that plague weakened and stressed-out bodies. Gun violence became so common it was no longer even reported. Hospitals, filled beyond capacity, refused to admit patients suffering from drug- or gun-related injuries or diseases. The entire life, health and liability insurance insurance industry went bankrupt, creating enormous misery for millions. Police forces collapsed from lack of recruits and were replaced by private security forces — for those who could afford them. Without liability insurance, the Big Pharma industry collapsed, despite attempts by governments to shield it from litigation, prop it up, and finally nationalize it. As farmers in affluent nations scrambled to meet the shortfall in supply of drugs by switching from food crops, and despite ever-growing government subsidies, the cost of food in these nations septupled — and then The Fungus wiped out the drug crops in these nations as well.

Who could have imagined such consequences of just trying to introduce a little market discipline, a little efficiency, into the world’s second-biggest (after war) industry? — an industry that wasn’t even acknowledged to exist as such because no one wanted to admit that a sector that preyed on human weakness, depression, and desperation for escape from reality could be so huge and so prosperous. Who could have imagined the global economy was so fragile? With markets, commerce and supply chains collapsing worldwide, with civil order degenerating into anarchy, with governments and corporations falling like dominoes, what could be done now to put things back on an even keel?

“I know what we need to do”, Gino said to himself quietly. “We need to go high-tech. No crops — everything made in the lab. Instead of making drugs from plants, with all the hassle and shipping and vulnerability, we need to make them out of oil.”

There is more to this story, of course, than meets the eye. It’s not a cautionary story about drugs at all, but a parable about a market economy that is fragile, grossly distorted by political interests and the abuse of money and power, increasingly dysfunctional, utterly unsustainable, and hugely vulnerable to inevitable shortages of key resources.

And in case you still think this story is about drugs, please read this earlier article.