Saturday 23 February 2008

Drugs and oil

Global oil production 80 million barrels per day x £50 a barrel = £1,500 billion per annum (about the same as the UK's GDP). Let's double that for taxes, refining costs, profits etc, call it £3,000 billion a year, globally.

Number of heroin addicts in UK (estimate) 300,000 out of population 60 million, average daily spend £15 (half a gram) = £1.6 billion. The UK is only 1% of world population - but clearly we are richer so pay more for heroin. Let's times that by 50 then, assuming average world street price is only half what it is in the UK = £80 billion, globally. Let's double that to include other drugs, £160 billion. But most drug users fund themselves with crime; to raise £15 they have to commit a crime that 'costs' society five times that (people scared to go on streets, repairing broken windows, higher insurance bills, police time, prison places etc) = £800 billion.

So, yes, global oil trade is more important that global drugs trade in £-s-d, but it's only four times as big.

* A few years ago I read that the global drugs and oil trades were roughly of equal value, bearing in mind that the oil price has more than doubled, and the street price of heroin has halved in the last five years, this seems 'about right' within a fair margin of error.

3 comments:

Simon Fawthrop said...

Mark, your numbers aren't going to be out be an order of magnitude so the do give a fair reflection of the state of the economics.

It really is hard to see why our lords and masters can't get this through their thick skulls and ignore the shrieks from the control freaks.

PS - thanks for the nod in the other post.

The Linden Row said...

Great blog! And great post! As an American in the middle of a hotly contested Predidential Election season, a look across the pond at a different political reality is the perfect mental sorbet.

The Sage of Muswell Hill said...

gs

"It really is hard to see why our lords and masters can't get this through their thick skulls and ignore the shrieks from the control freaks."

But our lords and masters are the control freaks