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Mark Osler

Mark Osler

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Narcotics: Attack Capital, Not People

Posted: 05/10/11 05:09 PM ET

The war on drugs is over. Drugs won.

There seem to be two common answers as to what to do next. The political establishment (including the Obama administration) largely supports doing the same things we always have -- locking up lots of people who are selling, making or carrying drugs. Meanwhile, increasingly vocal groups of reformers on both the right and left support the legalization of narcotics.

They are all wrong. Supporters of the same tactics we have pursued for decades need to recognize the failure of that enterprise. Many drugs are cheaper, purer, and more widely available now than they were twenty years ago. Legalization proponents, meanwhile, ignore the dire social consequences of narcotics like crack cocaine and methamphetamine (they have a stronger argument in relation to marijuana). There simply is no ignoring the way hard drugs can rip apart the social fabric of a family or community -- especially in areas that are already economically vulnerable.

There is a third way, however, and it is worth pursuing in relation to hard drugs. Narcotics trafficking is a business, and we need to make that business fail. Our primary tactic thus far has been to try to deprive the traffickers of low-wage labor by incarcerating the street dealers, mules, and local managers within that business. No wonder it hasn't worked -- we have done this in an economy awash in available low-wage laborers who have few other opportunities. There is an endless line of replacements for the workers we incarcerate.

Instead of attacking labor, which is plentiful, we should attack the capital flow from the street to source countries. We don't have to grab all of the money in that stream -- just enough of it to exceed the profit margin. Say that a Mexican cocaine exporter is making a healthy 30% profit. If we interdict 31% of the cash flowing back to him over time, we will make him either close up shop or find other markets outside the United States. Unlike labor, capital is difficult for drug networks to find, as traditional loans are unavailable and they cannot sell stock or bonds to raise money. The importance of cash flow is magnified because of these restrictions, and thus more vulnerable.

The time is right for this new focus. Since 9/11, our intense work to de-fund terrorism has led to the development of new techniques and expertise in tracing sophisticated financial transactions. Taking the money out of the flow does not even require a criminal case; a civil forfeiture action will suffice. I'm not talking about the penny-ante forfeitures we pursue too often now, seizing a drug dealer's car here and a house there -- I want to directly attack and convert the millions of dollars streaming back to the source.

Taking the money rather than the people would be both simple and rewarding. We get to keep the money, of course, and narcotics enforcement could become self-financing rather than a drain on state and federal resources. It would take fewer investigators to employ this tactic, and another by-product would be greatly reduced prison costs.

Most importantly, this re-conception of fighting narcotics has a chance of actually working.

Without capital, there is no product -- there is no mule carrying drugs over the border, there is no dealer on the street corner, and there is no baby left alone while her mother buys meth. We are a nation that believes in freedom and markets, and we now need to use markets rather than prisons to solve this problem.