Competing for the U.S. Market: Assessing Heroin Industries in the Western Hemisphere

According to historical samples obtained through the Drug Enforcement Agency’s “Domestic Monitor Program”, in 1986 Colombian and Mexican produced heroin constituted 32% of the U.S. heroin market. Despite decades of aggressive political rhetoric and the commitment of billions of dollars to the ‘War on Drugs”, in 2007 Colombian and Mexican Drug Trafficking Organizations produced 98% of all heroin available within the United States. In just over 20 years heroin produced in the Western Hemisphere rose from a niche market in the Western United States to the dominant product available to U.S. consumers. What factors contributed to this change in the U.S. market? Where was heroin available to the U.S. being produced during that same time period and what happened to it? The purpose of this thesis is to identify the economic and political factors that explain the entrance into and domination of the U.S. heroin market by Colombian and Mexican sourced heroin. In this thesis, I seek to answer the question How did drug trafficking organizations in Colombia and Mexico successfully remove Asian produced heroin from the U.S. market? This feat can be recognized as especially impressive when placed in proper historical context. While Mexican and Colombian sourced heroin was aggressively increasing its share of the U.S. heroin market, the U.S. government was committing unprecedented resources to the reduction in flow of illicit drugs from Colombia and Mexico. My thesis seeks to address the aforementioned research question and provide insight into the history of U.S. – Latin American relations through the study of heroin. Heroin is a plant-based narcotic that undergoes a simple production process before it is ready for market. It is a commodity that connects sustenance farmers in ungoverned corners of the globe to consumers in the world’s most developed countries. My research aims to explain heroin as a commodity and analyze its role in an illicit commodity chain. This thesis concludes that heroin is unique as an illicit commodity because from 1986 to 2012 it required less economic input for production than other drugs, was transported from point of origin to U.S. markets with minimal coordination or resources, and it remained profitable in U.S. markets with no considerable increases in price thanks to the formation of new markets. These characteristics make it an ideal commodity for drug trafficking organizations facing state intervention. The Counter-Narcotics policies of the United States, Mexico, and Colombia from 1986 to 2012 aimed at arresting the leaders of large drug trafficking organizations and intercepting large shipments of drugs. In response to these challenges, drug trafficking organizations have been forced to adopt tactics that decentralize their operations and decrease the size of their shipments. By analyzing heroin as a commodity, my thesis will provide ample evidence to explain the following contradictory phenomenon; as central governments have increased their efforts to dismantle drug trafficking organizations and curtail the flow of drugs across international borders, Colombian and Mexican produced heroin has increased in volume and come to dominate the U.S. heroin market