Illicit goods: Market of the Disconnected

A Challenge for Natural Capitalism

Scan: ìAfghan Route to Prosperity: Growing Poppies,î by Amy Waldman, New York Times, 10 Apr, p. A1.

Disconnected states often rely on the export of a single crucial raw material, like oil in the Middle East. The most disconnected states are those that market illicit goods, like drugs, because they need to stay off the networks by and large to avoid serious prosecution. Afghanistan, one of the great disconnected states of the last several decadesóhell, centuriesóis back in the business of selling the world heroin big time.

This rebound in drug trade is a serious threat to the government because of the corruptive element it introduces to politics. The problem for the American-backed government is, many of the guys in this trade are the same friends we made to take down the Taliban, which itself was deeply involved in the trade as a means of financing its terroristic regime. As fragile as the security rule set is in Afghanistan today, the government and the American military supporting it are wary of starting conflicts with what we used to call the ìnorthern alliance.î

Problem is, this is a vicious cycle: Afghanistan canít join the world on any significant level if heroin continues to account for roughly half its GDPóit just wonít work. But until Afghanistan joins the world, itís hard to see how its society can elevate itself much from what it remains today: too poor and too uneducated and too disconnected from economic opportunity to do anything but grow poppies.

In this global war on terrorism, this rebound in Afghanistanís drug production is a very bad MOE, or measure of effectiveness.