Re:Is Legal Pot Crippling Mexican Drug Trafficking Organisat...
by tomrod on Monday January 15, 2018 @05:12PM
(#16153910)
> You can't just substitute things and expect them to keep the same market.
Of course not. What we face is an organized, unregulated, lawless group of dangerous criminals who find one of their primary income sources dwindling. I did not intend for my original point to debate foundations of economic theory, only to point out that they are likely to continue diversifying their product -- apparently they are switching to avocados and old-fashioned mob shakedowns, as per another comment on this thread.
Re:Is Legal Pot Crippling Mexican Drug Trafficking Organisat...
by lmm on Tuesday January 16, 2018 @06:03AM
(#16157301)
If those other activities are profitable, why wouldn't they be doing them already? Your post implies reducing their ability to sell cannabis will increase their other activities, which I see no reason to believe.
If a commodity can no longer be (near) monopolized into their share of the market, then demand does not magically grow for other commodities. Sure, they can pivot strategies (which costs significant amounts of money) and adapt new commodities and services to match market demands, but this does not mean that they have the same profits.
If they truly are already profit maximizing (to the best of their abilities), then they are already are servicing the markets with the highest demands. Which then if you remove their ability to service their market with the highest demand, you also remove the profit of that market. To generate their current revenue (with loss of the pot market) they would need to generate more demand in their other markets (advertising), find a new market with large enough demand (innovation), or service a lot of niche markets.
tldr:
- Demand exists for commodities.
- Different commodities have different demands.
- Shifting suppliers of a market does not generate new demand in different markets for the original supplier.