Rare Frogs And Illegal Drugs - Palisades Hudson Financial Group

Colombian conservationist Ivan Lozano has hit on a brilliantly promising strategy to protect his country’s rare and endangered amphibians. His plan: Flood the market with them.

Lozano is not hunting rare frogs in Colombia’s Andean forests. He is raising them himself and selling them at prices designed to undercut poachers and smugglers. If he can raise the frogs cheaply enough, and in large enough numbers, he might manage to drive down the market price to the point that poachers no longer find it worthwhile to harvest and smuggle the creatures onto the black markets. Lozano told The Associated Press that his company also encourages collectors to breed their own frogs.

Picture yourself as a poacher. If the government toughens the legal penalties and steps up enforcement, you will shrug your shoulders; legal risks are a basic cost of doing business. Since the demand for your product already exists among foreign collectors and other buyers, tougher enforcement merely reduces supply and drives up the price – and thus your profits, as long as you either don’t get caught or bribe your way out of trouble when you do.

But a scheme like Lozano’s could actually put you out of business. You become the corner bodega when a super-big-box discount store opens across the street. The threat to poachers’ business is so real, in fact, that I worry about the safety of Lozano and anyone doing what he seeks to do in the same locales where smuggling now takes place. I was surprised when I read the Associated Press account of Lozano’s work, because it did not seem to make much effort to conceal his location. Possibly this was because it is no secret locally anyway.

This market-based approach to conservation might succeed when it comes to fast-breeding species like tree frogs. It will not be particularly useful when it comes to drying up illicit markets for elephant ivory or tiger penises. It may not even help curtail the market for shark fins, although perhaps someone can find a way to farm enough sharks to quell the global slaughter on the high seas.

But an area where we could definitely apply Economics 101 – which is all Lozano is doing – is the eternally futile battle against illegal drugs. All we need to do is understand that the big problem is not the drugs, but their illegality.

We have had decades to recognize that nothing about U.S. federal drug policy makes any sense or does very much good. The same is true of many of the policies followed at the state level and in other countries. Much of the U.S. epidemic of drug-overdose deaths is due to the unregulated provenance and purity of the product that addicts crave. While prescription opioid overdoses are still higher than in past years, illicitly manufactured fentanyl and other synthetic opioids have driven deaths higher since 2013. Some drug users resort to theft, prostitution and other forms of crime to fund their addiction. Outsize profits can lure underprivileged young people out of school and into the streets. Then those youths grow into adults who often end up incarcerated and saddled with criminal records before their lives even have a real chance to begin.

The money produced by the illegal drug trade taints everything it does not destroy outright. The latter category includes civil societies in drug-producing and transit corridors. In those places, gang violence and civil corruption have been major factors in producing the flood of refugees streaming to our southern border. More stealthily, money from the drug trade has also corrupted policymaking in this country, where an enormous industry has grown up in enforcing drug laws, imprisoning who violate those laws, and seizing the property involved (or merely allegedly involved) in the drug trade for the enrichment of law enforcement agencies and the advancement of their personnel.

None of this is new. None of it even originated with the “war on drugs” when President Richard Nixon coined that phrase in 1971. All the same ills were evident in the Prohibition era in the early 20th century. Things got so far askew that the U.S. government actually introduced poison into the supply of industrial alcohol, which was often stolen and resold by bootleggers. The government hoped to deter illegal drinking by killing people who consumed the product. This strategy sounds bizarre to us now, but otherwise reasonable people were willing to implement it. I suspect our own drug policies will strike future generations as similarly outrageous.

Consider, for example, that in Canada – where cannabis has been legal nationwide since last year – people engaged in a legal industry have been advised by American authorities that they will “generally” be admitted to the United States if they travel for reasons “unrelated” to the marijuana business. But if they come to our country to, say, give testimony or an interview about their experiences, they might face a lifetime ban if some immigration-crat decides this is travel that is “related” to the business. Heaven forbid they open or answer a work email while at Walt Disney World.

Then there is the fact that marijuana is illegal everywhere in the U.S., for all purposes, under federal law. At the same time, 33 states plus the District of Columbia have claimed to make it legal for medicinal or recreational purposes, or both. Yet federal law is supreme, so marijuana is illegal even where it is legal. This is simply absurd.

You will note that I have been writing about illegal drugs generally, not only marijuana. This is because the logic of the marketplace applies to all products. Yes, heroin, cocaine, MDMA (often called ecstasy or molly), methamphetamine and opioid painkillers are all dangerous. If they are legal and freely available, people will die from abusing them – just as people die from smoking cigarettes or abusing alcohol. But those deaths will be fewer, as we learned when alcoholism spiked during Prohibition. And most of the collateral damage, which is far greater than the direct consequences of drug abuse, would disappear. Of course there are still black markets for tobacco products and booze in this country – every high school keg party is proof of that. But the societal side effects of these legal but regulated products are minuscule compared to the results of the illicit drug trade.

Even so, we can’t even bring ourselves to legalize marijuana at the federal level, let alone contemplate making so-called “hard” drugs available to adults in clinically pure, appropriately measured and labeled dosages. Merely bringing up the idea is a form of civic apostasy. This would be fine if the current state of law actually prevented many people from taking these drugs. Our real-world experience proves otherwise.

So we continue to pursue fruitless and destructive drug policies, despite everything we know about how to curtail an illegal business by replacing it with a legal one. At least we can probably save some frogs. That’s better than nothing.

Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s book, Looking Ahead: Life, Family, Wealth and Business After 55. His contributions include Chapter 1, “Looking Ahead When Youth Is Behind Us” and Chapter 4, “The Family Business."

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