Speaking in Virginia this week, FBI Director James B. Comey pointed to a classic anti-drug strategy to fight the current heroin epidemic: “Our job is to try to crack down on the supply, literally, to be very blunt, to drive up the price to make it less and less attractive for people who are addicted to pills to move to heroin,” he said alongside DEA Administrator Chuck Rosenberg.
This “supply-side” approach has been in place at the federal level since the dawn of the drug war: The federal drug budget has traditionally emphasized approaches like destroying plants, intercepting drug shipments and arresting the people who sell drugs. The logic is straightforward: You reduce the supply of drugs, those drugs become more expensive, and the higher prices drive down demand and use of the drugs. Economics 101, right?
In the real world, it hasn't quite worked out that way. Here, for instance, is data on federal spending on supply-side drug control going back to 1981. The numbers are adjusted for inflation to 2012 dollars.
In inflation-adjusted terms, federal supply-side anti-drug spending ballooned from $2.2 billion in 1981 to $15.3 billion in 2012. You can disregard that crater in 2002 — a temporary change to the drug spending calculation was made that year, resulting in a number of significant spending lines removed from it.
Now according to supply-side drug-control theory, increasing this spending should result in a concomitant increase in drug prices. But look what happened to heroin prices, in inflation-adjusted terms, over the same time period — they dropped like a rock.
The inflation-adjusted price per pure gram of heroin fell nearly tenfold, from $3,260 in 1981 to $465 in 2012. The more the feds spent on supply reduction, in other words, the cheaper heroin got (federal data shows that the prices of other drugs, like cocaine and methamphetamines, fell similarly during this period). That's the exact opposite of what's “supposed” to happen, and of what Comey says will happen if we crack down on the heroin supply further.
The relationship here may have some element of causality. For instance, federal supply-side pressures may have kept heroin just valuable enough to entice cartels and suppliers to keep devising new ways to push the drug into U.S. markets, driving prices down. “You get this filtering effect decade after decade where you end up artificially selecting or breeding super-traffickers,” Sanho Tree, a drug policy expert at the Institute for Policy Studies, told Vox earlier this year.
Moreover, supply restraints have never really been a problem for the U.S. heroin market, according to Ethan Nadelmann of the Drug Policy Alliance, a drug law reform group.
"All the heroin consumed in the US in a year could fit within something like one or two shipping containers," Nadelmann said. "If there were demand for 10 times as much heroin [in the U.S.], it would rapidly be supplied. The limitation is not really on the production side."
So why the continued focus on supply-side policies? Part of it is that after 40 years, a staunch, no-compromises anti-drug culture is firmly entrenched in places like Comey's FBI and Rosenberg's DEA. Also, substance abuse treatment doesn't fall within the portfolio of law enforcement agencies.
This isn't to suggest that supply-side drug-control approaches should be abandoned. Some experts, like the Brookings Institution's Vanda Felbab-Brown, believe attempts to reduce the supply of illegal drugs can be effective if they're implemented smartly. But crucially, she says, supply-side approaches must accompanied by robust substance abuse treatment programs to reduce demand for drugs.
The supply-and-demand realities of the drug trade are why reform groups, like the Drug Policy Alliance, say that federal funds would be better spent helping drug users, rather than cracking down on drug suppliers. You can take out a heroin dealer, but the addictions he's feeding will remain. Another dealer will happily step forward to serve those addictions as long as demand remains.
Returning to Comey's original point, federal authorities can go to war with the cartels and attempt to shut off the flow of cheap heroin all they want. But history suggests such efforts will amount to little if the demand for the drugs is still there.