They are economically rational. Credit National Archives

An interesting little study from the environs of London. Gangs, street gangs, aren’t about protection of social, geographic or racial turf these days. They’re about extracting the profits from the drugs trade. Good, that shows that Da Youf are economically rational. For there is a great deal of money in said drugs trade and armed might is the only way to protect said moolah. We may well not like what they’re doing, even prefer that the system didn’t tempt into doing it, but it’s a rational response to how the system is:

London’s gangs appear to be driven increasingly by a desire to profit from the illegal drugs market rather than a determination to protect their neighbourhoods from outsiders, a study has found.

The report on gang culture in Waltham Forest, in the north-east of the capital, also suggests visible signs of gang membership are being rejected on the grounds that they are bad for business.

The report, From Postcodes to Profit, was prepared by researchers at London South Bank University at the request of Waltham Forest council.

“The first major development is the emergence of a more organised and ruthless operating model focused on the drugs market and driven by a desire for profits,” its authors say.

“This new operating model rejects visible signs of gang membership as ‘bad for business’ because they attract unwanted attention from law enforcement agencies.

It’s a bit of a smack in the face to those who insist that people aren’t economically rational. Even that they’re not utility maximising – profit maximisation often being a useful proxy for that. For here are people being that and doing that.

If we want to stop all of this then we’ve got to change the system within which this is a rational response. The only way to do that is to remove the profits from the drug trade. Which we can only really do through drug legalisation. Give it a little time after we’ve done so and profits will sink to around about the average cost of capital, as they are in pretty much every other business in the country. Seems simple enough however much some recoil at the simplicity of the point.

Much the more fun observation though is that we’ve the bottom level of society here showing that they are indeed economically rational. So, when does the Labour Party start following suit?

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  1. Of course end the new Prohibition. It is absurd to hear politicians prattle on about the drug “crisis” (and especially “epidemic”) when the only thing making it a crisis is police action, and seizure of drugs until their street price rises to the level that will corrupt a critical mass of policemen.

    But ending Prohibition will not “stop all of this” as schoolyard gangs must have formed for additional reasons. Legalization will have them revert to the lesser level of lawbreaking they exhibited beforehand.

  2. I can well see someone in the Labour Party, probably their Shadow Treasurer, agreeing with you that the way to get rid of predators, be they gangs or capitalists, is to remove the ability to profit: Legalise drugs and nationalise everything.

    • Policing has failed because the PC has gone PC. Legalising the drug trade amounts to simply giving up. The horrors of drug addiction won’t go away. There will however be a reduction in the deaths of thugs fighting over market share. That makes it all worth it.

      • And you accused me of virtue-signalling over the weekend! You avoid discussing the effects of the Drug War (and even concede that the “horrors…won’t go away”) but claim that legalization means we are “giving up” (and we know we are stern and tough). No, legalizing sale and possession is not “legalizing the drug trade,” that is, endorsing the industry. The thuggery is caused by the illegality, ensuring that the only merchants have to be thugs.

  3. @ Quentin Vole
    The IRA was, in my youth, a quixotic organisation thast campaigned for a united Ireland by attacking army barracks in the UK, Aldershot being a favourite tareget. Then Brezhnev replaced Krushchev and someone persuaded him that the IRA could be infiltrated and used; theinfiltration was so thorough that the communists were able, by devious means, to gain control and became the “Official IRA” while those traditionalists who woke up split off to become the Provisional IRA or “Provos”. You may not have noticed that SinnFein has switched from being very right-wing in the 50s to being vey left-wing under Gerry Adams. The economic rationale was the money from Russia. Only after the fall of the Soviet regime did the IRA major on drugs.

    • Good analysis. I’d only add that the IRA always had a significant line in ‘smuggling’ across the border (which, of course, they didn’t recognise) – be it butter, diesel or drugs.

  4. @ Tim
    One of the “economic rationalisations” is that 7 years inside for murder is far cheaper (in those terms) than being murdered so there is an incentive to kill rivals as soon as their competition gets to the point where it will depress profits for the whole gang by more than one assassin’s share for seven years [assuming a 100% success rate for Inspector Lestrade because he is able to call on Mr Holmes for help].
    However many murder victims in London were “asking for it” by challenging other gangs,we NEED to remember that these gangs are accidentally killing innocent bystanders. If they are economically rational, the solution is to restore capital punishment