Thursday 1 July 2021

Supply chains in illicit markets

Credibly certifying that a product's supply chain meets particular standards is not the easiest thing in the world. 

Every supplier all the way back in the chain needs to be so-certified, and there will always be fun boundary questions in how far back things need to go. For something like a t-shirt there's the factory that makes them, the factories that makes the thread and the cloth, the places that make the dyes, the sources of the raw materials and the chemical components that go into the dyes, the people who make the machines that extract the raw materials, the company that makes the fuel for the machines and the electricity suppliers. Maybe also the companies that supply morning tea for the workers and back through that chain as well? It gets messy. 

Anyway - certification is possible, but setting it all up in the first place has to have been hard. It requires that those at the end of the chain can trust that the next one back in the chain is also certified, which requires that they can trust the next steps back, and so on. Knowing that your certified supplier is legit requires either having some centralised repository of who is certified maintained by the certification provider, or the ability to see the certifications all the way through. Encouraging any one supplier to be certified requires that they all expect to see the increase in value from being able to cell through verified certified chains, so there are network issues to overcome too. 

It seems the kind of thing that would be close to impossible in cocaine markets. But:

Brits looking to ease their conscience over their involvement in bloody drug wars overseas are now being targeted by cynical dealers selling what they claim is "ethically sourced" cocaine.

Users have revealed a high demand for the so-called "woke coke" at posh dinner parties across the UK.

Drug policy expert Neil Woods told the Daily Mirror: "I have been shown ads for 'environmentally friendly sniff' but it's nothing but a very clever marketing ploy.

He revealed that users were paying through the nose for the gimmick.

The article quotes someone as saying it's impossible to produce ethical cocaine. 

That seems wrong, at least in principle. 

But imagine if you did have some perfectly ethical way of producing cocaine. How could you possibly credibly convey that through the many steps between you and the final consumer in London? At every step, someone could be mixing your product with someone else's cheaper and less ethical product. Any mechanisms you might put in place for verifying the authentic source of the delivered cocaine is a mechanism by which you might be prosecuted. Even if you ran it pseudonymously, it increases the risk you're running if the pseudonym gets tied to a real identity. 

I'd love to know how the cocaine dealers in London are trying to demonstrate that their product is actually the ethical real deal. It could be that the customers don't actually care and they just want the warm glow of feeling like they do care. But suppose there were an actual real market with people willing to pay a real premium for ethical cocaine. Could that market be supplied? Or does it just fall apart with lemons problems? 

In any case, ethical supply will be easier in legal than in illegal markets, so another case for legalisation. 

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