The Ugly American and Trying to Violate the Law of Supply and Demand

“To err is human, to blame takes a politician.”
Hubert H. Humphrey

When I went off to college I took some basic economics classes. A lot of that content has faded from memory but one thing that has stuck with me is the Law of Supply and Demand. When there is a demand, there will be a supply and when demand exceeds supply, the price of the commodity goes up. Unfortunately, there is a huge demand for illegal narcotics in the US. And unfortunately, there are various nefarious entities who have arisen to meet that demand. These entities range from local sellers and meth manufacturers to international crime cartels who rule parts of the countries from which they are based. Fentanyl is mostly manufactured in Mexico using precursor chemicals sourced mainly from China. Chinese suppliers ship these chemicals to Mexico, where cartels synthesize fentanyl and smuggle it across the U.S. border. Cocaine generally originates in South America (Colombia, Peru, Bolivia), but Mexican cartels control its smuggling into the U.S. Heroin is largely produced in Mexico and trafficked north. Almost all methamphetamine entering the U.S. is produced in Mexico in large-scale labs operated by cartels.

Given all of that, I am confused about our recent saber rattling around the country of Venezuela. I have learned that apparently Venezuela DOES play a role in supplying cocaine to the US, but it is not a major producer of cocaine. Instead, Venezuela acts primarily as a transit hub for cocaine originating in Colombia, which is the world’s largest producer of the drug. But while Venezuela is significant for shipping cocaine, its role is minor compared to Colombia, Mexico, and Central American countries like Guatemala, which handle much larger volumes. Well now things make a little more sense. But really, threatening an invasion of the country? We are not threatening to invade Mexico or Columbia or China. What’s up?

President Trump and others accuse Venezuelan President Nicolás Maduro and his military of being “narco-terrorists” and for allegedly being directly involved in cocaine smuggling. Venezuela is portrayed as an authoritarian regime that Washington does not recognize as legitimate. Targeting Maduro serves both foreign policy goals (getting rid of somebody we don’t like) and domestic political optics, appealing to voters who don’t like “leftist governments” and are demanding that something be done with our narcotics problems. Colombia and Mexico at least pretend to help with the problem. China is a global power, so a war with them over narcotics is not likely, especially since that would be a nuclear war. Venezuela, by contrast, is isolated and vulnerable, making it an easy, low-risk target for harassment. Well, if all of that is true, I guess I don’t necessarily like it, but I understand it.

About the same time, I was taking Econ 101 and Econ 102, I learned about a concept called the “Ugly American”. I would hear the term “Ugly American” tossed around by those who were protesting the US involvement in Viet Nam. I later learned that the term “Ugly American” came from a 1958 novel by William Lederer and Eugene Burdick. It painted Americans as being arrogant, culturally insensitive, and oblivious to the impact of their actions in foreign countries. As I think about what we are doing in Venezuela, I guess I would add one more trait – we want to blame somebody else for our problems.

I feel very blessed that I have never acquired a narcotics habit. Thank the Lord, for I know my willpower, I don’t think I could escape its grip. But the hard truth is that if Americans stopped paying massive amounts of money to purchase narcotics, every cartel, every drug dealer, every drug producer would go out of business. For we would have reduced the demand, and following that immutable economic law, the supply and all of its associated infrastructure would fade as well. Of course, we have found that reducing the demand is a very difficult task. But I am struck by the hubris, the hutzpah, the unbridled arrogance that we exhibit by bombing another country whose people are simply trying to meet our demand. We want to imply that THEY ARE THE BAD GUYS. OUR PEOPLE ARE TOTALLY INNOCENT.

I’m sorry, we can continue to spend the billions of dollars that we are spending with the Drug Enforcement Agency (DEA), and we can bomb Venezuela. But as long as Americans want to buy massive amounts of illegal narcotics, SOMEBODY IS GOING TO SUPPLY THEM. But in our arrogance and denial, we want to make OUR problem THEIR problem, simply because we CAN. What if we spent just HALF of the dollars spent with the military, the DEA and the myriad of other federal, state and local drug agencies, on addressing the root causes of this epidemic? What if we really tried to reduce the demand? That will be hard, apparently too hard for our leaders to attempt. It’s much easier for the Ugly American to try to fool people into thinking that we can violate the Law of Supply and Demand and that our problems come from somewhere other than ourselves.