This article is from Dollars & Sense: Real World Economics, available at http://www.dollarsandsense.org
This article is from the January/February 2021 issue.
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The idea that drugs are indispensable to the global capitalist economic system is more apparent today than it would been have less than a year ago. Much of the world’s population today waits, scared and isolated, for the global drug economy to deliver us from the Covid-19 pandemic. Remdesivir, ivermectin, hydroxychloroquine, heparin, dexamethasone, azithromycin, lopinavir-ritonavir, ribavirin, and interferon-beta, among other drugs, are currently being touted in various quarters as effective treatments for the illness caused by the SARS-CoV-2 virus. The global race to produce an effective vaccine has proceeded at a breathtaking pace, with multiple vaccines currently authorized for emergency use in different countries around the world. At this particular moment it is easier than usual to see the tight relationships between drugs and global capitalism. Even as vaccine distribution begins, workers still cannot work as they did before, consumers cannot consume as they did before, some factories cannot produce as much as they did before because of collapsed demand, while others cannot produce enough to meet surging demand, ships cannot dock and warehouses are either too empty or too full, and financial markets move up and down with the latest news about vaccines and drug trials.
Yet the data suggest that even in times when the world is not wrestling with a global pandemic, drugs play central and critical roles in relation to global capitalism. Generally, the relationship between drugs and capitalism takes two major forms. First, drugs are a source of wealth and income. Drug revenues stem not only from direct drug production and sales, but also from other, more indirect pathways. Second, drugs act as a kind of insurance that help manage and mitigate the damage capitalist dynamics do to human and other beings, as well as social and ecological systems. Of course, these two points overlap, as this drug “insurance” works to allow continued profit making and accumulation. The discussion below is not a comprehensive one, for there are too many important connections between drugs and capitalism for one article to exhaust. Rather, I clarify and highlight a series of these relationships that I think are the most salient.
Direct Drug Revenues
The global drug market is absolutely enormous and represents a sizeable proportion of global economic activity. “Drugs” in modern societies have come to be understood largely as black-market products that are addictive and “personality destroying” (cocaine, heroin, amphetamines, and the like). The term—“drugs”—thus carries some legalistic and moralistic baggage that interferes with one’s ability to observe drug markets clearly. One major consequence of categorizing drugs in the typical way is to minimize their apparent size and relative importance in the global economy, for when “drug” market figures are quoted they typically include only a handful of the great many substances that rightfully qualify as such. In fact, there is a really broad array of products that seem to be drugs even though we do not often call them by that name. The question “what is a drug?” is thus an important one for research purposes, and there is no clear answer to it. What is clear, though, is that toying with the category of “drugs” makes hidden features of the global drug economy more visible, opening up new avenues for research.
The drug-market figures typically quoted in the news are of two types: black-market drugs and prescription drugs. The last years for which figures are available indicates that global illegal drug markets were about $425 billion in 2014, while the global pharmaceutical and medicine market was roughly $1.2 trillion in 2018. Yet, by my rough accounting, this accounts for little more than half of the global drug market. If we add to this tally global markets in alcohol and tobacco products and in caffeinated beverages like coffee, tea, and soda, the sum grows very large indeed. I also added U.S. markets in other kinds of drugs like vitamin supplements, over-the-counter medications, and veterinary drugs, for which data are readily available (the U.S. market is the largest globally in these products). Of course, there are other substances that I do not provide figures for that could and probably should be included (e.g., khat and betel nut are widely consumed around the world, but the data are pretty spotty), and then still others that might be included with some controversy (e.g., sugar and corn syrup). These back-of-the-envelope calculations thus represent only a portion of the actual global drug economy, but even so, the figure is enormous—almost $3 trillion—as indicated in the table below.
To put this figure into perspective, the World Bank estimates that in 2018, world GDP was about $80.7 trillion, meaning that the global drug economy accounted for, at a minimum, 3.5% of global GDP that year. This is more than six times the size of recent estimates of the illegal drug market, and almost double the market size that one might figure by simply summing together illegal and pharmaceutical drug markets. Based on 2017 GDP data from the World Bank, the chunk of the global drug economy tallied in the table is about 15% of the size of the U.S. economy, more than twice the size of the economy of Australia, and more than four times the size of the economy of Saudi Arabia.
It was about five times larger than the semiconductor and electronics industry in 2018, according to IBIS World data (i.e., industry revenues for semiconductor and electronic parts manufacturers). It is more than $600 billion larger than the global revenues of commercial banks in 2018 (according to IBIS World). And the global drug economy is about 25% larger than total global revenues in 2018 from oil and gas exploration and production (according to IBIS World, in 2018 global oil and gas exploration and production revenues were roughly $2.28 trillion).
Moreover, market growth in one corner of the drug market can boost growth in other corners. In other words, individual drug products do not always substitute for one another, but rather complement each other such that the sales of one drug can help boost the sales of others. For example, one recent study finds that while alcohol consumption is often negatively related to crack-cocaine consumption, it is positively associated with powder cocaine use. When people consume cocaine, they also typically increase their consumption of alcohol, such that profits in one drug domain result in profits in another. As another example, many drugs cause side effects that make consumers uncomfortable or ill or may put them in danger. Other drugs are often prescribed by physicians to manage these side effects, for example, anti-nausea drugs used to mitigate the side effects of chemotherapy treatments or laxatives used to treat constipation among patients treated with opioids. In some cases, the very same company that produces and markets a drug that causes harm to consumers also produces other drugs that mitigate that harm. Purdue Pharma, the manufacturer of OxyContin, also produces and markets buprenorphine, the opioid drug used to treat opioid addiction in the context of medically assisted therapy.
Indirect Drug Profits
Activity in global drug markets also facilitates indirect profit making. One of the best examples of these indirect effects comes from drug-market regulation, and specifically how the War on Drugs in the United States and abroad allows for capital accumulation and concentration. Dawn Paley, in her book Drug War Capitalism, focuses on the imperial dimensions of the drug war, arguing that efforts to crack down on drug production in Latin America helps to clear people and agricultural production from the land, “freeing” it up to be used for other purposes, like mining and extraction by multinational conglomerates. And many volumes have been written, (for example, Michelle Alexander’s The New Jim Crow) on the ways that the drug war in the United States enriches participants in the prison-industrial complex and other law enforcement arenas, to the detriment, especially, of people of color and the poor.
Profits also flow from patterns of drug consumption and its impacts on human physical and mental states. Occupational drug consumption is in many cases associated with more productive workers, for example with workers who partake of central nervous system (CNS) stimulants like caffeine and amphetamines. CNS stimulants are deeply intertwined with the history of capitalism, and especially with the lives of workers. The birth of factory work changed the way people labored and the conditions in which they labored, generating massive demand for drugs like coffee and tea—stimulants that traders readily exported from plantations across the Global South, worked by slaves and indentured servants, into imperial centers across the global North. Political economist Raj Patel deftly connects capitalist prerogatives in Britain during the early Industrial Revolution with the physiological effects of CNS stimulants on the bodies and minds of workers, contrasting the effects of stimulants with those of beer, a CNS depressant:
The demise of beer’s place in everyday life does, however, show how traders in tea and sugar were able to ride, and further cause, changes in centuries-old tastes, reduce levels of nutrition and get a more caffeinated workforce for the ‘workshop of the world’ as a result. This, then, is the genealogy of the can of Red Bull. Tea was the original Jolt. It was a drink high in basic stimulants and carbohydrates, sweet and perky.
Like other CNS stimulants, caffeinated beverages like coffee, tea, and Red Bull work to improve productivity by improving energy, focus, and concentration, and reducing appetite/hunger. The implicit subsidy to the employer conferred by rampant worker consumption of stimulants should be squarely noted. With CNS stimulants reducing worker appetites, workers’ need for breaks is also minimized, and the low wages paid to workers are made more tolerable by reducing worker food expenditures. On this point, Patel links the practice of female factory workers drinking tea with milk and sugar in early industrial Britain to slaves on plantations across the Global South chewing sugar cane—both provide much needed energy and calories to workers quickly and cheaply on the job site, with minimal interruption or cost to employers.
The central importance of stimulants for work under capitalism is partly indicated by the simple fact that employers often readily supply their employees with such drugs for the explicit purpose of improving their performance. One of the more well-known examples of this pattern is the widespread dispensation of amphetamines to troops during World War II, on both the Allied and Axis sides of the conflict. Nicolas Rasmussen’s excellent history of this episode indicates that Germany was first to provide methamphetamines to its troops:
Indeed, April through June 1940, the peak of the Blitz, corresponds to the wartime peak in the German military’s consumption of amphetamines. According to Steinkamp, the Wehrmacht used 35 million 3mg methamphetamine tablets for these three months alone, and much less thereafter. In both the United States and Britain, top-level scientific advisory bodies devoted to the military problems of “fatigue” earnestly began studying the effects of the drugs and their military utility.
When American troops landed in North Africa in 1942, U.S. General Dwight D. Eisenhower ordered half a million doses of Benzedrine sulfate for soldiers on this front of the war. And British troops received 20 milligrams of Benzedrine daily prior to a battle in Egypt that same year.
As with certain kinds of military occupations, there are some jobs for which stimulant use is practically endemic to the occupation itself. Notably, workers in occupations that require long shifts and/or night work often consume CNS stimulants to complete their assigned tasks.
That human bodies do not perform optimally at night provides even more fuel for stimulant demand, with CNS stimulants often utilized by laborers who work night shifts to help them overcome the fatigue and confusion associated with interrupting their body’s circadian rhythm. For example, a 2019 study of drug consumption among long-haul truckers around the world found that more than 20% of truckers use amphetamines at work, while 2.2% use cocaine (most of the studies reviewed for this meta-study were done about truckers working in the Americas, but all six inhabitable continents were represented, and were conducted via questionnaire). The study’s authors note, “It appears that truck-drivers choose stimulant substances as a form of performance enhancing drug, in order to increase productivity.”
And, of course, when soldiers are injured or traumatized in battle, or when truckers have an accident on the road late at night, we partly turn to drugs to try to put their bodies and minds back together again, so they can work another day. Veterans of the U.S. conflicts in Iraq and Afghanistan, for example, were often heavily dosed with zolpidem (Ambien), a powerful sedative/hypnotic, to help them with insomnia. In fact, the way drugs are used to enhance workforce productivity—variously used to boost productivity and then also to treat work-related trauma, illness, and injury—is not all that different from the way in which industrial meat producers utilize antibiotics and other drugs to ensure profitability in the context of concentrated animal feeding operations that can often make animals sick.
Drugs as Insurance for Capitalism
As most critical observers of capitalism have noted, this is a volatile and often-brutal system that wreaks havoc on individuals and communities, on other species, and on the Earth itself. The damage that capitalism causes can to some extent be mitigated or covered up by drug consumption. A few examples help to illustrate this point.
For at least 200 years, observers have noted that capitalism is prone to economic and financial crisis. In the Marxist tradition, this is understood as a consequence of systematic overproduction and underconsumption that leads to imbalances. In the Keynesian tradition, this is understood as a consequence of poorly regulated financial markets that subject the economy to boom-bust cycles. Whatever the cause, economic crises have historically catalyzed massive upheavals and social unrest. Drugs figure in here as insurance in at least two ways. On the macroeconomic level, some drug markets appear to move countercyclically, with drug market revenues remaining stable or even increasing as general economic conditions deteriorate. This exerts a stabilizing force on the macroeconomy during times of crisis. For example, in the 1980s, Colombia was faced with an economic crisis in which they were short on the foreign exchange necessary to pay off dollar-denominated debts. But, unlike many other countries that defaulted on their debts during this period, Colombia did not default and did not require International Monetary Fund or World Bank structural-adjustment loans. Why? Cocaine exports generated a flow of dollars into Colombia that officials bought with local currency in black foreign exchange markets. Some of the dollars were then used to pay foreign debts and stave off default.
That individual consumers often increase drug consumption during times of economic crisis and hardship is also fairly well documented in the medical literature. Economic crises generate hardship and suffering, owing to loss of income, unemployment, and housing problems. Drug consumers, on average, consume more drugs under such conditions. For example, in a 2018 study, researchers surveyed 180 European drug consumers about their consumption during the previous economic crisis and found that almost 60% of those surveyed had increased drug consumption during the crisis, compared to only about 25% who reported decreased consumption. Researchers found that, “The main reason given for increasing drug use was greater amount of free time available. Other important reasons were greater substance availability during this period, more stress at work and seeking comfort in response to the loss of a stable source of income, social status and/or family.” In another example here in the United States persistently high levels of unemployment among certain demographic groups have contributed to the opioid epidemic.
Not only did drugs thus help “dull the pain,” so to speak, associated with stress and suffering during the Great Recession in Europe, but it also provided a way for unemployed people to use their free time. To the extent that drugs co-opt proletarian time and reduce perceptions of suffering among the populace, this works to maintain the status quo and preempt protest, opposition, and civil unrest. This dynamic is just as visible today as it was in the 19th century when the British “pacified” the population of China with opium, thereby mitigating the pushback against British imperialism. Indeed, in Denver, Colo., where I live and work, our mayor quickly and conspicuously reversed his decision to stop marijuana and liquor sales when we locked down for the coronavirus in March. As The Independent reported: “According to local reports, the administration had to change its course after residents flocked to the shops to panic-buy alcohol and marijuana the night before the lockdown came into force.”
Onward
Drugs are an integral feature of capitalist economies. They are a source of direct revenue and income, accounting for at least 4% of world GDP in recent years (and likely much more). Drugs are also a source of indirect revenue and income that stem not only from the regulation of the global drug economy, but also from the close integration of drugs into working life. Drugs also provide insurance services of a sort that help to insulate capitalism from the pushback and fallout that often results from its volatile and brutal operations. Put differently, in much the same way that debt permits consumption beyond the limits posed by income, so, too, do drugs permit labor and suffering beyond the limits posed by biology and mental health.
These insights open up a variety of avenues for future research and exploration. One key set of questions involves occupational drug consumption. How prolific is occupational drug consumption? In what kinds of occupations? What kinds of drugs are consumed? By whom? Why? How? Under what conditions? Do employers provide these drugs? And so on. My travels through the drug economy have left me with the suspicion that, in the United States at least, occupational drug use is rampant and occurs in a variety of settings that we would not necessarily expect. For example, I am a university professor, and the sparce data available indicate that university faculty consume certain kinds of drugs at levels well above the national average, including anti-anxiety and anti-depressant drugs. What is it about this occupation that seemingly facilitates above-average consumption of these particular drugs? Is this relatively high level of consumption related to the nature of the work itself and the conditions in which professors labor? Or is it related to structural changes in the academic labor market? Another key set of questions involves the insurance function that drugs play in relation to global capitalism. In a sense, drug consumption is perhaps usefully considered as a signal or a marker of risk in capitalist systems. In some contexts, economic risks partly cause drug consumption, as in the example above of consumption in response to economic shock, and then the drug consumption itself works to mitigate another set of risks that are largely political and social (e.g., unemployed people with lots of free time). Many empirical questions arise here, especially about the relationship between social structures and individual behavior. Do individual drug behaviors, and changes in those behaviors, relate in any way to broader structural and systemic economic conditions? How and why? Are there stable and predictable relationships between drug consumption on the one hand, and structural economic conditions on the other? In what contexts? In other words, to roughly paraphrase Hunter S. Thompson, is it true that the brutal reality of capitalism is intolerable without drugs?
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