Druggies or businessmen?

When looking at the facts and variables that are associated with drug deals, most people wouldn't consider it a legitimate business. However, through Chris Wilikins' article in the journal Contemporary Drug Problems (ProQuest database), I was able to see that drug dealers share some shocking similarities to legitimate businessmen.

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Drug markets are outdoor public markets where anyone with cash can purchase illicit drugs on demand  A street drug market typically involves a drug dealer standing on a street corner selling drugs to people who approach requesting a sale. Street drug transactions are generally conducted between strangers or near-strangers, whereas private drug transactions are more likely to be conducted between friends and social acquaintances.

The illicit drugs most commonly sold from street-level markets are heroin and crack cocaine, although many other drug types are also sold in this way  The strong addictive qualities of heroin and crack may explain why they are widely sold from street markets Heroin and crack users will often require immediate access to drug sales, and they are the least able to maintain personal supplies without consuming them.

Street-level drug markets have been described as the least prestigious and most dangerous markets in which to buy and sell illicit drugs (Jacobs, 1999). Sellers are at the bottom of the distribution chain, selling low-quality drugs in low-value transactions, and are fully exposed to police patrols and the local criminal fraternity (Jacobs, 1999). Buyers are often addicts who have no regular means of income apart from welfare payments, and "rip-offs," "burns," and "con games" are reportedly common in these markets (Jacobs, 1999).

I think that its quite interesting to see that there are different levels and kinds of drug transactions. It is pretty funny to see the irony when considering that street-level drug markets are looked down upon in the business world of drug dealing because normal people would look down upon any kind of drug sale.  At the same time this gives a nice comparison to legitimate business, in the fact that there are varying degrees in which businesses are run.  Street-level markets are more like small business while private transactions deal with more goods and are similar to corporations it seems like.  To me, it is cool to see the different factors that can affect a drug deal and the profit margins involved.  For example, street-level markets seem to thrive off and depend on the addictive qualities of the products that they provide.  While private drug transactions thrive off of having two reliable parties that want to complete a fair deal.

Physical retaliation is an effective deterrent to cheating only when exchange parties have clear information about each other's capacity to retaliate. Exchange parties in street-level drug markets meet only very briefly to conduct quick transactions and consequently have very limited information about each other's ability and willingness to use violence . Some drug dealers are ready practitioners of violence, while others restrict their activities more exclusively to selling (Jacobs, 1999). Drug users suffering from drug withdrawal can be vulnerable to cheating and violence in one instance and be desperate perpetrators of cheating and violence in another situation (Jacobs, 1999).

The collective-vengeance ethic would be a factor only if a transaction was conducted by a gang member or an organized-crime figure. The governance role that street gangs and organized-crime groups play in illicit-drug markets has been overstated in the past . There is little evidence to suggest that organized crime groups such as the Mafia regularly provide arbitration services to exchange parties in retail illicit-drug markets (Reuter, 1983). Open competition and opportunism continue to reign even among sellers with the same gang affiliations (Jacobs, 1999).

Participants in street-level drug markets do not appear to hold any strong ethical beliefs against cheating on drug transactions. Indeed, the literature suggests that self-interest and opportunism are accepted street norms (see Goldstein, 1989; Jacobs, 1999). Personal reputations for integrity would be difficult to disseminate in short-lived street markets populated by relative strangers.

The speed and furtive nature of street-level drug transactions limit the opportunities to examine drugs and verify money before exchange is complete. Transactions typically involve sly "hand-offs" disguised as hugs, hand slaps and "high fives" (Jacobs, 1999).

Despite having some similarities to legitimate business, illegal drug markets have some defining factors.  In a normal business, transactions are done under a set of terms and must follow the law; however, when drug deals occur, there is no need to follow the rules.  Morals don’t exist and that means that things, like violence and scams, can actually help when trying to maximize profit.  

However, each party must recognize certain things about each other before attempting this.  The buyer maybe a heavy addict, meaning that they would be quite vulnerable to an attack and potentially get there money stolen.  Another thing to consider is gang affiliations.  Drug dealers that have friendly gang affiliations or are simply apart of the same gang are similar to legitimate businesses because they create competition due to certain factors.  Supply and demand are a given here; however, there are other unique factors to consider.  Buyers may consider the safety of the transaction or even the quality of the drug provided.  

FUTURE RESEARCH: More about types of goods sold (land, physical capital).  More about the hierarchy of drug dealers.