Wednesday, December 30, 2009

If You Can't Beat 'em, Buy 'em

All the stories about how opium grown in Afghanistan is funding the Taliban finally got me to wondering: why don't we just buy it up  and destroy it? Estimates that I have seen are that opium in Afghanistan is a $64 billion a year business, of which about a quarter goes to the growers. So, bidding above the current price to make sure we corner the market, we could still theoretically buy the entire crop for $20 billion or so, about the cost of 20,000 soldiers. This would have the additional benefit of reducing the world supply of heroin, at least in the short run, by 90%.

Like most things, this is not as easy as it sounds. A simple supply-and-demand analysis suggests the Taliban would still end up with some of the opium. But they would get less of it and at a higher price, a price that we would set. A further complication is that the Taliban have guns, and so do the warlords. But at a minimum, it greatly complicates their life, and drastically reduces their income.

This is not a Swiftian Modest Proposal; I'm quite serious. The possibilities seem even more dramatic in other places. Take Somalia, everyone's favorite example of a failed state, where we are worried about both Al Qaeda and piracy. This is a country of about 10 million people with a total GDP of around $5.5 billion. So for about 1% of the US military budget we could hire, well, the entire country. Realistically, it would probably be better to hire only a quarter or so of the population, so we're not stuck there forever, but this makes the costs even lower. Having hired them, we could then put them to work looking for foreign terrorists, building roads, building schools, digging wells, taking literacy classes, and so on. Presumably this would be better in the long run than just paying them to dig holes and fill them in, but even that would be a bargain.

I can't shake the feeling that this sounds like a joke, but someone will need to explain it to me.

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