POST 201 Lecture Notes - Lecture 8: United States Border Patrol, Marihuana Tax Act Of 1937, Mission Creep
13 Apr 2016
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2/4/16; tony payan: drug trafficking, organized crime, and the u. s. -mexican border. Worth examining where the border patrol is today. 1929 mexicans are required a visa to enter the united states. When you have a good that is prohibited, you drive the production, distribution, and consumption underground. That means that the price goes up because you have introduced risk. When there is risk, the product reflects it as a premium. The price of that good + the premium for risk = increased price. When you drive the price, you have yet another effect. You incentivize people to join the market and distribute. The profit is now so big that people enter the market to make money. You have now cartelized the production and distribution. Now you have cartels that make money from this distribution. The government now has to create a law enforcement apparatus to enforce the laws. That drives up the premiums for drugs / alcohol even more.
