which was the first government report to approach marijuana as a commodity and totreat the marijuana trade as a market. It was a wonderfully numerate report: the firstgovernment report to estimate the size of the marijuana market and its black marketvalue, just as it was the first to estimate the cost of drug law enforcement. Mysection ‘History By Numbers’, and my approach in general, owes much to theCleeland Report.
Likewise Clement and Daryal (1999), whose work,
The Economics of MarijuanaConsumption,
is the only other model of the Australian cannabis market, base their model upon Cleeland too. Our models, which were developed independently andcontemporaneously, have as many differences as similarities, but we both agree onCleeland as the point of departure. I explain the two different models in ‘History By Numbers’, and demonstrate how, with minor adjustments, Clements and Daryal’smodel approximates my own. By modifying Clements and Daryal (1999) in thisway, I demonstrate two different, yet compatible, ways of estimating the size of theAustralian cannabis market.
In many ways, ‘History By Numbers’ is simply the Cleeland Report extendedover a 25 year period. Its various sections estimate the size and value of themarijuana market, the cost of drug law enforcement, and the price of marijuana inthe period from 1973 to 1998. My original contribution lies in the concept of the‘regime of prohibition’ – which is my way of measuring the amount of drug lawrepression per smoker – which is the voodoo number linking price, seizure percentages, and offences in my model. My aim is to build an historic model of theAustralian marijuana market, so be warned! In these sections you will need your calculator handy!To free myself from the blindfold of ideology, I have adopted an empirical,scientific approach; and in ‘History By Numbers’, I propose and test three ‘laws’ of the illicit cannabis market:1. The price of pot varies with the regime of prohibition;2. The percentage of pot seized varies with the regime of prohibition; and3. The regime of corruption varies with the regime of prohibition.Stripped of the jargon, Propositions 1 and 2 simply assert that as governments press down, as the number of drug offences rises, price goes up, and the amount of pot seized will increase proportionally. Propositions 3 is simply an outcome of Proposition 1. Because price rises with government crackdowns, the value of the black market rises proportionally, and the amount of money available from the black market to fuel corruption increases proportionally with the ‘regime of prohibition’.Every dollar spent on drug law enforcement acts as a multiplier for the black market. Consequently, those who benefit most from prohibition are organised crime