The Productivity of Crime in the United States: Drugs and Capital Accumulation

Under particular social and historical conditions crime represents—to dominant economic interests—a mechanism for capital accumulation that may be more advantageous and preferable to legal or licit capital formation. There are at least four reasons for this: illegal industry is often “growth industry”; these activities are unregulated, untaxed and characterized by high profit margins; significant structural linkages between illicit capital and profit on the one hand, productivity, capital formation and private accumulation on the other; and, the transformation of labor-market conditions that are increasingly favorable to the sale of illicit and illegal goods and services. These propositions are then illustrated by examining their applicability to the production and distribution of illegal drugs—primarily heroin—in the U.S.