Comment by jbackus | Hacker News Reader

Comment by jbackus | Hacker News Reader

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You can use digital black markets like the silk road as an analogue for legalization though. Forget how the vendors obtain the drugs for a second and just analyze the differences in distribution and consumption between offline and online drug trade.

Offline there is: - competition via violence - political narcoterrorism - profit maximization by product dilution - profit maximization by product deception (most street MDMA is amphetamine+nBOME mixture)

Online there is: - competition via quality, price (violence impossible in anonymous marketplace) - political separation via anonymity - drastically reduced product dilution (people do reviews with sources like ecstasydata.org) - drastically reduced product deception (see "The LSD Avengers" for example)

When you contrast these aspects you see that the online marketplaces do operate like a free market with the biggest difference being the incentives associated with deceptive vending. I think thats valuable just because it provides a real world simulation for what variables of legalization would look like without forcing any one country to take the initial plunge by themselves.

Violence amongst end user drug dealers is very rare and confined to specific, very poor, areas. Wholesale is the only place where you start to see significant amounts of cash, and hence most of the problems, and that has zero differences between offline and on. There is no 'political narcoterrorism' between the guys selling 8ths of coke in the neighborhood. You're also mischaracterizing the drug trade with regards to consumer habits. Drug users communicate about dealers and products the same way people communicate about every other local business. The internet has greatly expanded and enhanced this ability, but prior to the Internet, local businesses, just like local drug dealers, operated by word of mouth and competed in many facets of service. We know this as drug quality has gone up and up over the years.

Remember, the vast majority of offline drug deals do not consist of driving to the hood to pick up something from a gangster. I think this mis-perception clouds a lot of the analysis of operations like the Silk Road.

It's also a mis-perception to assume the hood is where all the gangsters are, a block outside the poverty stricken areas here the gangsters are suburban kids from affluent neighborhoods who are just as violent when it comes to protection rackets, extortion and taxing minor dealers.

Anybody running a small delivery line is almost always carrying an illegal gun, and willing to shoot competitors over peddling 8ths of coke.

Additionally, although many street dealers operate in areas you'd probably associate with being high-crime, the drug gangs are pretty aware that customers need some sense of safety when buying product and don't have any more reason to see their customers robbed or assaulted than any legit shop owner.

If you're interested in an observed account of a drug gang, there is a book called "Gang Leader for a Day" where the author spent a lot of time in a housing project, with the guy who ran that faction of the gang. It has its flaws but it was an interesting read:

http://www.amazon.com/Gang-Leader-Day-Sudhir-Venkatesh-ebook...

The majority of personal use sales are not conducted with a "gangster", true, but the small-time college ecstasy or coke dealer conducting those personal use sales IS making regular trips to the hood, purchasing from people who are hardened criminals. They expose themselves to a lot of risk in doing this.

You don't have to move far up the chain before you see some serious violence. Personal use weed dealer? Probably not going to get killed. But robbed? Yes, definitely, seen it happen many times. Personal use coke, ecstasy, heroin dealer? Much more likely to experience violence. The dealer one level above, supplying the personal use dealers? They get killed all the time, despite not being drug kingpins in any sense. It only costs 1000$-2000$ to have someone killed in many parts of the US, so that should say something about the chance of violence that small-time dealers face.

Silk Road was more than personal use sales, I'd bet the majority of its revenue came from pounds and half pounds of weed, sheets of LSD, and orders of 500+ ecstasy pills. Heroin and coke haven't caught on as much yet in the online scene, with prices still a little above what well-connected users can get on the streets, but give it time. Also keep in mind that the online drug scene is more than just SR/BMR/Sheep and that there are private forums that deal strictly in wholesale.

> violence impossible in anonymous marketplace

if you read the report about the 1st silk road, you'll see that's not true

Alright. Let's assume the massive difference in quantity of violence is substantial. We're talking 10s of thousands dead via cartel trade vs. 2 alleged attempted hits on the silk road. Even then that was the operator of the marketplace defending users, it wasn't a vendor killing another vendor to gain a competitive advantage.

But your analysis specifically excluded the source of all of this violence, the wholesale procurement of the drugs by the end user dealers. None of that is different with the Silk Road.

That's the locus of the violence. The source of the violence (and of most of the other harms) is the prohibition.

Alcohol and tobbacco dealers aren't involved in shootings in the streets - instead we find them in their shops, carefully following laws and doing business peacefully. Nor are their customers suffering from adulterated goods, or committing robberies to afford black-market prices.

Yep, exactly. The Zetas cartel for example, do not necessarily import & export themselves. They are simply a gang of thugs who move into an area already teeming with drug smugglers/dealers, and extort them for taxes. Since these drug dealers can't go to the police for protection since they are doing something illegal they either pay up or the streets turn into a bloodbath. If you notice the Zetas are mainly concentrated in Northern Mexico where the major smuggling routes into the US are. By controlling those they can siphon off 20-30% of all drug shipments from every other cartel into the US and never have to touch drugs themselves, so are unlikely to be caught. They are just parasites off other people's hard work of manufacturing, smuggling and building sales networks. This business model will only work under prohibition.

Zetas do not hold up trucks full of tequilla and beer going into the US for extortion because they would be arrested. When your business is legal the solution for dealing with thugs is simple: call the cops or sue them. When you are gray area/illegal your only negotiation is to pay them or pick up a gun creating an all out war.

During the prohibition this was a bit different.

It depends on the drugs. There are a lot of cases of producers selling on these market places. Look at a lot of the marijuana vendors, the vetted LSD vendors, the mushroom vendors, etc. Beyond that, there is violence involved in later steps of the drug trade: smuggling, gang turf wars.

{I am strongly in favour of legalising all drugs}

There are problems with some of the manufacture of cannabis. Criminal gangs use trafficked workers, forcing them to work in cannabis farms.

If I was a criminal gang using slaves to grow cannabis I think I'd market it as some home grown organic low yield crop with images of open fields and nice trees.

Just like eggs from caged hens don't show battery farms, but happy chickens walking in green fields. http://www.ecolovers.co.uk/wordpress/labelling-matters-the-r... etc.

Maybe in Mexico they do this. Here there are investors who buy up a dozen houses through shell corps and hire one grower who sets everything up, and is paid a lot of money. The grower then hires people to maintain and protect the grow usually for pretty good money as well. http://www.cannabisculture.com/articles/3268.html

> Maybe in Mexico they do this.

It happens in England.

Silk Road was not an anonymous marketplace. Buyers had to provide some identity and address to sellers in order to receive shipment. There are obvious geographic limitations with how anonymous a person could be while still receiving the goods they want.

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