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Demand for cocaine by affluent people is a straightforward economic problem: remove the regulatory constraints on its supply. Bernard Keane. As the Reserve Bank meets to consider how much damage it has inflicted on the economy in unnecessary and ideologically motivated interest rate hikes, and whether more futile harm is warranted, other policymakers are dealing with a very specific sticky inflation problem. Like the Reserve Bank, however, policymakers and the media are blaming high prices on consumer demand instead of supply and competition. Only Saudi Arabia, where a drug conviction will get you beheaded, has higher prices for illicit drugs. Unlike housing, however, Nine is happy to blame consumers for the high price of cocaine. Celebrities and football players were also to blame. It is also likely to be about as effective. As we know, the primary cause of the high price of cocaine is government regulation, which forces supply chains to operate through illegal, and therefore much more expensive and unreliable, channels, and leaves distribution and retailing in the hands of a market that must conduct its own form of regulation in the absence of government regulation. Rather than scolding and abusing consumers, removing the regulatory impediments to supply is the most effective way to bring cocaine prices down and minimise the negative externalities of the product. Importation, distribution and retailing could then be undertaken by legitimate companies that can be regulated and taxed in a way that is currently unavailable. Ever since cannabis was cultivated 10, years ago, humanity has consumed psychoactive drugs, for a variety of reasons. In 21st-century Western economies — marked by economic precarity, intergenerational inequity, lack of access to housing, the political and economic dominance of corporations and a refusal of the governing class to seriously address the climate catastrophe — the consumption of drugs is more than ever a rational choice to deal with the psychological toll of living under a deeply flawed economic and political system. Bernard Keane uses codeine, caffeine and alcohol. He has, sadly, never used cocaine or any other illicit drug. Politics Editor BernardKeane. Bernard Keane is Crikey' s political editor. Before that he was Crikey' s Canberra press gallery correspondent, covering politics, national security and economics. Crikey is committed to hosting lively discussions. Help us keep the conversation useful, interesting and welcoming. The Crikey comment section is members-only content. Please subscribe to leave a comment. Please login to leave a comment. Search Log In. Newsletters Got a tip? Scroll to top. Back to Crikey. Want some assistance? Contact us on: support crikey. Bernard Keane Mar 18, A depiction of two lines of cocaine Image: Adobe As the Reserve Bank meets to consider how much damage it has inflicted on the economy in unnecessary and ideologically motivated interest rate hikes, and whether more futile harm is warranted, other policymakers are dealing with a very specific sticky inflation problem. About the Author. Topics cocaine competition cost of living crime drug abuse drugs inflation. Related articles. Send it! Copy link.