From Coca to Capital: Free Trade Cocaine

By John Barker, 15 December 2010
Image: Mexican paramilitaries patrol the Sinaloa mountains

The War on Drugs, together with unequal free trade legislation, have provided first world junkie-capitalism with the liquidity and 'bio-tools' it needs to drive its delusional and unsustainable growth  – writes John Barker


In 2009, the British Observer newspaper reported the assertion made by the United Nations illegal drugs 'czar', Antonio Maria Costa, that he had seen evidence that the proceeds of crime were the 'only liquid investment capital' available to some banks on the edge of Credit Crunch collapse, and that a majority of the estimated $315 billion drugs profits had been absorbed into the legitimate financial system.1 He was, needless to say, coy about which banks had benefited, revealing only that the evidence came from intelligence sources and state prosecutors. But what he did do was blow away the myth that drugs profits are laundered solely through 'dodgy' offshore concerns.2 Ben Ehrenreich reminds us that such coyness is unnecessary: writing of the Mexican drugs business he notes that,

Investigations in the USA and Mexico have implicated Wells Fargo, Bank of America, Citigroup, HSBC and Santander (among others) in cartel-related money-laundering. Sr. Costa's observations as to the significance of criminal money to the global economy also does not prevent him from being a hard-line exponent of the 'War on Drugs', a 'war' without which those profits would not be realised and ready for use as that 'liquid investment capital.'

Cocaine is now the illegal drug industry's most financially significant commodity subject to this 'war'. At the same time the dynamics of the very capitalism which has recently needed that injection of liquid capital, regardless of its origins, create the conditions that make coca growing the most rational economic choice for many small-scale Andean farmers, while it is also these farmers who are most penalised by this 'war without end'. Instead, cocaine is not just functional to the creation of private capital, but the war against it is useful ideologically, and for the selective repression it requires and entails both internationally and internally. This involves notions of 'backwardness' in the case of small-scale farming, and of racial character defects of particular consumers. In the USA specifically it has played a large part in creating a self-perpetuating, and racist, 'prison-industrial complex'.3

The drug is also functional to capital as an aid to the 'productivity' of certain kinds of labour in what are called the creative and financial industries. The capacity of cocaine for both a promiscuous enthusiasm and controlled perseverance is especially suited to such project-defined work. In recent years the demand has increased still further as other areas of work demand worker performance.4 This reality, however, cannot be given any official or academic recognition.

The 16th century pragmatism of the Spanish King Philip on the matter of coca, when he overturned the Catholic church's ban on it in the name of labour productivity, is ideologically impossible now, except within the indigenous peasant movement in Bolivia which has fought to make it legal.5 The Bolivians, unlike the king, are fighting for the recognition of its cultural significance and a properly scientific appreciation of its qualities.

Image: Founded as a mining town, Potosí became one of the largest cities in the Americas in the 17th century

Bring Forth the Backward

It is hardly coincidental that the major producers of the war-targeted cocaine, heroin, marijuana and cannabis, are countries designated as 'under-developed', or what have also been called 'backward' areas of the world. In most periods of colonialism words like 'savages' depicted ideologies of racial superiority. After the Second World War, a new language emerged, articulated in the Inauguration Speech of US President Harry Truman in 1949, and reasserted in John F. Kennedy's Alliance for Progress. The institutional context of Truman's speech was the birth of the United Nations and the Bretton Woods institutions. In it the 'moral' and 'civilisational' superiority of the USA which previous presidents had proclaimed was now manifested as its science and technology.6 Referring to peoples of the world whose 'economic life is primitive and stagnant', he said:

we must embark on a bold new program for making the benefits of our scientific advances and industrial progress available for the improvement and growth of underdeveloped areas.


It is from here on that 'underdeveloped' becomes part of the language of political economy and, at this time, it is uniquely American technology that will 'develop' these others. Truman again:

The United States is pre-eminent among nations in the development of industrial and scientific techniques. The material resources which we can afford to use for the assistance of other peoples are limited. But our imponderable resources in technical knowledge are constantly growing and are inexhaustible.


Just a year later in 1950, one Howard Fonda, a banker and President of the US Pharmaceutical Association, lead a UN Commission to study coca. His study of Aymara and Quechua people (with one translator) concluded that coca chewing was the cause of poverty in the Andean countries because it lowered the capacity to work, which was in flat contradiction to the seriously concerned opinions of the Conquistador exploiters of silver mines. Apart from its denigration of two 'backward cultures', Fonda's report was clearly self-interested and unscientific, 'plagued by prejudices, unfounded speculation and third-hand sources.'7

This did not prevent it being ratified by the World Health Authority in 1952, and the power of this self-interested prejudice became ever clearer with a refreshed version of the Truman rhetoric, namely President John F. Kennedy's Alliance for Progress. Its existence was proclaimed in 1961, and in the same year the United Nations' Geneva Convention on Drugs outlawed coca except as a flavouring agent. In the Alliance's charter, 'peace-loving peoples' were specifically those who promoted 'the conditions that will encourage the flow of foreign investments' to the region. In Latin America, in the interval between Truman and Kennedy, such conditions had to be enforced by the Eisenhower Administration with a coup in Guatemala to the benefit of the United Fruit Company.8 Since then, a whole array of enforcement measures have been devoted to highly selective versions of free trade and the free flow of capital.

Despite its powers of enforcement, capitalism cannot tolerate other socio-economic modes of living. They are an affront. And in the case of opium and coca, the fact that they have been traditionally and uniquely produced in 'backward' areas makes them inherently bad. In this narrative we don't hear that cocaine was actually synthesised by a European using those very same 'industrial and scientific techniques' Harry Truman boasted of. The affront is that its production still depends on the coca leaf. Equally, the 1961 Geneva Convention On Drugs (which proclaimed that the total prohibition, and therefore eradication, of chewing coca should be completed in 25 years and made cocaine Public Enemy Number One), had a get out clause. According to Article 27 'it is allowed to plant, transport, market and possess coca leaf in the quantity necessary for the production of flavouring agents.'9 This, as Jorge Hurtado describes, was solely in the interests of the Coca Cola Corporation.10


 Image: United Fruit Company in Guatemala in the early 1950s

At this time 'wars' were monopolised by the Cold War. 1961 however, marked the beginning of what in our age has become one of many thematically-defined Wars: on Drugs, and subsequently on Terrorism, and now - grotesquely - on Poverty and on Cancer. It is ironic that when Realpolitik intellectuals routinely talk of a 'new Middle Ages' in the context of 'underdeveloped' countries, their masters talk not just of wars, but pitch drug czars against drug Barons.11 A minority of academics and various people who have worked in drug enforcement agencies have talked of the ineffectiveness of this 'war', and the many ways in which it is counter-productive.12 Why then its continuation, which depends on the continued illegal status of cocaine, and which has not altered the demand for the drug in a performance-oriented world of capitalist work?

The Prison-Industrial Complex

The 'war' against drugs is then partly ideological, of the type that used to be called 'cultural imperialism', that is, a racist association of drugs deemed to be illegal with peoples considered to be inferior and in a state of 'backwardness'. Built on this there has developed a War on Drugs industry which is a perfect representation of Marx's mordantly witty riff on the productivity of the criminal - 'Apologist Conception of the Productivity of All Professions.'13

This edifice of jobs and 'technical' developments has been built up around the world but, as in many other instances, the USA has been the pioneer. The Drug Enforcement Agency, established in 1973, is the neo-colonial arm of the War on Drugs, and yet it is but part of one of 12 government counter-drugs policies agencies; agencies now estimated to have a budget of $30bn a year.14 Such an edifice of interests requires first of all an overestimation of 'the problem' in the interests of all the bureaucracies involved. At the height of the Vietnam War when heroin was perceived to be the main problem, President Nixon told Congress that 'drug abuse' was 'America's Public Enemy Number One' and in the process kicked off the language of war.15 It also requires ideological input from those Armchair Spartans of the US 'Power Elite' who see decadence in their own citizens, or rather certain groups of citizens.16 Decadence in this case is both a mirror of 'backwardness' but also a perceived threat to 'morality' and 'authority'. Back then, in 1975, and despite the heroin 'scare', the prison population of the USA stood at 380,000, but this was set to change.17 In 1973 Governor Rockefeller of New York, who had ordered the massacre at Attica prison two years earlier, proposed life sentences without parole for all hard drug dealers and set the tone for what would happen when Ronald Reagan took power in 1980.

It is the unprecedented increase in the numbers of people in American prisons which really tells the War on Drugs story. It has involved far greater levels of public expenditure, but at the same time is a considerable source of corporate profit. Between 1975 and 1985 it had more or less doubled to 740,000 prisoners. This was five years into the life of the Reagan Administration during which the USA's interest in Latin America involved stepping up its training of local military and police torturers.18 The Cold War was still the context, but it is one in which neoliberal political-economic policies also demanded an increase in internal repression, one portrayed as a 'culture war'.19

In this period it was not just Reagan upping the ante, the Congressional Democrats were also competing over who could be the toughest. The Anti-Drug Abuse Act of 1986 is ascribed to their Senate leader Tip O'Neil wanting the party to take control of the Senate in upcoming elections with the support of current Vice President Joe Biden. Twenty-six new drug crimes with mandatory minimum sentences were included and prosecutors given the right to appeal against sentences considered to be lenient. It coincided - 15 years into the War on Drugs - with an increase in drug-related violence and the rapid growth of crack cocaine, a form of free-basing for the poor; and with the first stage in American de-industrialisation and attacks on the welfare system. It is at this time that the War becomes what the celebrated novelist Toni Morrison called an attack on and extreme marginalisation of black men; and what Jerome Miller called the American Gulag. More specifically, this was an attack on black men and, as it transpires, black women blinkered by a 'culture of poverty'. All this when to be poor for psychologising neoliberalism is characterised as a character defect.

Image: Police officers identify dead bodies at Attica prison, 1971

This is made clear when, at the change over from Reagan to George Bush Sr., a prototype Armchair Spartan with a nicotine addiction, William Bennett, moved from being Education Secretary to head the Office of the National Drug Policy Control as 'czar'. The agenda he and his team brought with them meant, as Dan Baum points out, that the notion of drugs as a health-problem was ditched.20 This was in part because this approach raised the problem of why and how corporate controlled tobacco and alcohol could be legal. Instead, the real issue was 'character', a notion of selectively defined decadence combined with the trademark psychologising of neoliberalism. Its flip-side was the assertion of authority. The 'Stern White Man' must be seen to be in control and morally entitled to be so. Baum describes how cocaine - plus heroin and marijuana - were subject to a tautology: that they were immoral because they were illegal, and illegal because immoral. He goes on to cite Bennett himself saying that 'the drug crisis is a crisis of authority, in every sense of the word "authority"'. This could mean only one thing: 'a massive wave of arrests is a top priority for the War on Drugs.'

In 1995, after a further ten years, the prison population had more than doubled again to 1.6 million; that is, it had quadrupled in the 20 years since 1971. In the 1996 presidential election, the candidates Bill Clinton and Bob Dole outbid each other on just how tough they were going to be in the 'War'. The prison population now stands at around 2.2 million, with 5 million either on probation or parole, and the state corrections budget stands at $50 billion annually.21 The racial divide figures also show that Toni Morrison was definitely not being rhetorical. In 2005, there were 4,789 black males in prison per 100,000 American men, as against 786 white males. For black men between 25 and 29 it's 11,695. In parts of Detroit, that icon of US de-industrialisation, 1 in 16 black males is under correctional control. Speaking some 35 years after Governor Rockefeller pioneered ever-heavier drug possession sentencing in New York State, the New York Civil Liberty's Union talked of them as the Jim Crow laws of the 21st century, pointing out that in addition to the racial disparity, 40 percent of imprisonment in the previous decade had been for drug offences.22

An A to B connection between de-industrialisation and an increase in drug convictions is impossible to make, but this increase has accompanied the imposition of insecure and under-paid jobs, as well as the 're-structuring' of the social welfare system to make it more punitive. What is much clearer is how this huge arrest-and-conviction pool has a symbiotic relation with the prison business. As Eric Schlosser explains,

What was once a niche business for a handful of companies has become a multi-billion dollar industry with its own trade shows and conventions, its own websites, mail order catalogues and direct marketing companies [...] it now includes some of the nation's largest architecture and construction firms, Wall St. investment banks that handle prison bond issues and invest in private prisons, plumbing supply companies, food service companies [...] companies that sell everything from bullet-resistant security cameras to padded cells available in a vast colour selection [...] and now has its own trade paper, Correctional Building News.23


In the case of state prisons, the construction boom has involved a process of geo-social engineering, bringing jobs and income to highly selective locations. Malone, North Country New York, is the example spotlit by Lynne Duke.24 It was a town in decline, with factories shut or downsized, and dairy farming had collapsed. Now it boasts three prisons, which has brought in 1,600 well-paid jobs and the employment that will service those incomes. 'Military Keynsianism' has been rightly identified as the dirty secret of free-market capitalism. 'Prison Keynsianism' is a lesser version, but its expansion in an era of tighter social budgets is no less real. And to a considerable degree this whole edifice is built on having made the products of plants, grown by small-scale farmers in 'backward' countries, illegal.

'An Unfortunate Style of Crop Diversification'

It's not hard to see that there are powerful interests at work in the maintenance of this particular war without end. More than that, globalised capitalism creates and re-creates the conditions which make the growing of coca and transportation of cocaine the only rational options for people in the poorest parts of the world. 'Rational' in the neoliberal sense, as in individualised and calculating; how 'human nature' is, and ought to be. The emphasis on the virtues of international 'free trade' has increased both the necessity and opportunity for different peoples to become involved in the cocaine business. The explosion of opportunity is obvious: exponential growth in international trade, proclaimed as an absolute virtue, with its millions of containers, air flights, penetration of new markets and so on, has created many more possibilities for the transportation of cocaine across borders. At the same time other distinctive characteristics of 'global capitalism' have provided motivation both for growers and transporters:

*Its intolerance of anything but itself, and of particular indigenous, non-capitalist cultures means, materially, an intolerance of non-capitalist agriculture whether it involves communal land or peasant (campesino) farming.25


*International trade is not free. The assumption of equal power amongst market participants is an obvious lie, and especially so in agriculture. While the West preaches, it has consistently used subsidies, export credits and import quotas to serve its own interests. Combined with an imposition of its version of free trade and its version of development as monoculture crops for export, it has destroyed a whole class of small farmers producing food for their own markets. This has been most spectacular in the case of Mexico since the imposition of NAFTA; something clearly foreseen and opposed by the Zapatista movement.


*Risk-taking by capital, as creating the optimum allocation of resources, has been its self-proclaimed virtue. The banking crisis of the present period has made a mockery of this claim, and the risk has been passed on to the people of the world at large. This has been the experience in agriculture for far longer. The power of wholesale oligopolies, and increasingly of supermarkets, has shifted the risks of small-scale farming for export still further onto the farmer. Already faced with the vagaries of the climate, and the possibilities of interest rate and fertiliser price increases, there are now systems of Supply Chain Management made possible by IT developments, which give all power to the buyer.


*Where quotas favourable to small-scale producers did exist, corporate lobbying - in this case by Chiquita - has undermined them so as to boost its own levels of exploitation in the plantations of Ecuador. This follows a pattern started in the Reagan-Bush era of undermining commodity price agreements which offered some security to farmers. At the same time, in the case of sugar for example - produced in Bolivia, Peru, and Colombia as well as the Caribbean - the USA imposed import quotas. It prompted US Congressman Thomas J. Downey to write an incredibly frank letter to The New York Times on 20 September 1989 which addressed this matter. Just as President George Bush Sr. was announcing an $8 billion solution to the 'drug problem' , the Congressman pointed out that in the period 1983-9 imports of 200,000 tons of sugar from these countries fell to less than 85,000.26 The trend was already apparent in 1987 when he notes that State Department officials writing in the Washington Monthly warned that this would lead to 'an unfortunate style of crop diversification.'


Trade Routes

Links then between coca production and the politico-economic realities of the capitalist world are not paranoid fantasy. On the other hand, I do not intend to make anything of the well-known US green light to cocaine smuggling at the time of the Contra war of destabilisation in Nicaragua; nor to claim that these links are always Cause A and an inevitable Result B. As a major cocaine trade route associated with extraordinary levels of violence, Mexico has to deal with its location, history and experience of politically controlled smuggling. But the business has seen an exponential increase since the imposition of NAFTA (North American Free Trade Agreement). This 'free trade' agreement meant, in practice, that smuggling became easier due to the increase in cross-border trade transport. The de-regulation of the Mexican financial system also made money laundering that much easier. As subsidised American corn flooded the market, over a million small farmers and another 1.4 million dependent on the agricultural sector lost their livelihoods. Monthly incomes for self-employed farmers fell by 90 percent between 1991 and 2003.27 Ehrenreich notes that in Bandiraguarto, people 'have little choice but to become narcos because there is so little other work, and with a government that largely doesn't care and a formal economy that takes pity on no one.'28

Image: Mexican coca farmers

Mexico's history made it an ever more important trading route following increased drug police activity in the Caribbean, which had previously been such an important entrepôt with links to marketing in the US itself. In the Caribbean too, its location and a history of political gang violence preceded the cocaine business, but it was also preceded by shifts in the political economy of both sugar and bananas. In their case, effective lobbying from Chiquita via the Americans at the WTO forced the EU to cap its preferential trade terms for Jamaican bananas. Its markets are now full of subsidised American produce that local farmers cannot compete with. It leaves Jamaica and other islands with the choice of tourism or cocaine. To repeat, these are not A-to-B explanations as to why it became such an important place in the transnational drugs business, but it is important to make the link when the capitalist ideological apparatus is focused on its own forms of 'de-linkage' by which it is able to selectively moralise or produce psycho-social explanations of its own as with the 'failed state' label. The Nicaraguan Miskito coast has also emerged as a perfect entrepôt between the Northern Colombian coast and Mexico. Here too specific government neglect and the experience that must have been gained in the period when Miskito communities supported the Contras in the 1980s destabilisation war made it a natural place to make drug business connections. But it is also a place of deep poverty and high unemployment, and this in a country where banana pickers are the lowest-paid of all in Latin America.

West Africa has now emerged as a main entrepôt for the transportation of cocaine into Europe. Guinea-Bissau, was a favourite in the circles of 'failed state' discourse and voyeuristic-moralising journalism. It has since been replaced as a favourite for cocaine transporters by Senegal with its advantage of better roads and telecommunications. 3,120kg of cocaine were seized off its seaboard in 2009. Again both its geographical location, and a history of satellite-equipped canoes ('pirogues') were being used to smuggle human beings into Europe, until that business moved further South. 29 However, there is also an element of 'failed state' theory in Western accounts, 'unmonitored coasts, poorly paid officials, porous borders and booming informal markets.'30 No reference is made to the destruction of local fishing by bottom trawl net fishing - in which around 75 percent of the catch is discarded dead - as well as un-regulated factory ships which, flying 'flags of convenience', enforce slave-like crew conditions.31 The real historical context is that Senegal's most prosperous year was 30 years ago.

Coca, the Safest Bet

Coca just grows, it's a weed. Farmers don't have to worry about markets and diseases. It always gets a good price.


- Liliana Ayalde, USAID 2004


The very first mission from the post-war western world, following Truman's development of the backward speech, was Colombia. Headed by Lauchlin Currie, it was the first World Bank 'comprehensive economic survey mission' and began on 30 June 1949. On 19 August the country received the first World Bank funding, which was an agricultural machinery project loan. This perfectly reflected Truman's promise to bring technological skills to the backward. Further World Bank credits followed in 1954 and then again in 1966, this time to foster large-scale cattle ranching. Nowhere was attention given to the chronic shortage of land for small farmers in a country where 60 percent of agricultural land is owned by 0.5 percent of the population.

Image: US funded Colombian paramilitaries sent to curb drug smuggling and combat left wing insurgencies

Then, as Héctor Mondragón describes at the time of the Clinton Presidency, and after years of FARC activity, 'the World Bank granted an induction credit of $1.82 million to fund pilot projects and a Technical Unit, with the goal of "preparing" a complete support project for "market-based agrarian reform"'.32 This 'reform' is an object lesson in the dangers of becoming indebted. Mondragón describes it as such:

Here's the paradox: the beneficiary of the subsidy program for land purchases (in the original scheme) becomes a real 'loser' who receives an unpayable credit that leads him to lose the land and to be registered in the data bases listing people who are in arrears. In addition to no longer having land, he can no longer receive any kind of credit.


In the hands of the Pastraña government as of 1998, 'it didn't seek to strengthen the campesino (peasant farmer) economy but rather sought the subordination of campesinos and the handing over of their property to large farms.' With a sleight of hand characteristic of contemporary capitalism, those whose 'development' policy entails the 'maintenance and consolidation of large rural properties', dismiss real land redistribution as 'obsolete' or 'antiquated'. And this, Mondragón argues, has pushed campesinos beyond the 'agricultural frontier' and into the jungle to grow illicit crops. These circumstances have been further augmented by the dynamics of 'neoliberal' capitalist globalisation.33

In 1990 Colombia's food imports accounted for just six percent of GDP. By 2004 it had amounted to 46 percent, with an emphasis instead on large-scale production of African palm, pineapples and cocoa. Given the history of coffee production, and indeed of many instances of export monocultures in the 'backward' world, this is likely to end in tears. In 1997 the price of organic coffee was $1.34 a kilo and by April 2004 it was down to $0.89.34 It was a process that started with the July 1989 dissolution of the International Coffee Agreement (ICA) negotiated in 1975; a period when the articulated possibility of a New International Economic Order on the back of OPEC's success, was sidelined by the politico-economic bulldozer of neoliberal policy for which such commodity price agreements, which had given producers some security of income, were denounced as 'ideological'.

President George Bush Sr. talked awareness-talk on the coffee-coca nexus at the very same time as Congressman Downey was explicitly linking coca growing to US sugar policy. On 28 September 1989, with a team including drug 'czar' William Bennett, he met with Colombia's President Barca to praise him for his 'heroic fight' against the drug trade and said he was prepared to resolve problems with the now hobbled coffee agreement. In fact he did not resolve it, so that by 2003 Gabriel Silva the President of the National Federation of Coffee Growers of Colombia was saying, 'we've seen some marginal areas of the Colombian coffee region farmers switching to illegal crops.'35 By this time the breaking of the Agreement had been cemented by the power of the coffee-buyer oligopoly (consisting of Sara Lee; Kraft; Procter & Gamble; and Nestle). This is part of a trend where risk is imposed still further on the farmer. In this instance the ICA was replaced by the supplier-managed inventory (SMI) system whereby the supplier becomes responsible for maintaining the stocks used by the purchasing firm even if the stocks are held at a port in that firm's country or its own storage.36

In the case of sugar, US import quotas were what might be called the final straw in the matter of risk being thrust down the agricultural ladder. The Peruvian coup of 1968 and subsequent agrarian reform, which involved the nationalisation of the largest sugar plantations on the coast, was blamed by the defenders of US quotas as the real cause of the industry's decline there. But it did not benefit Peru's small farmers either. The APRA corporatist union continued to influence the sugar unions and the leadership of the co-operatives in such a way that casual labourers, nearby smallholders and tenants as well as landless migrants from the highlands working seasonally were excluded from the 'cooperatives'. Their lives became less secure.

The history of sugar production in the Santa Cruz area of Bolivia followed a similar pattern. It was kick-started by an American mission, the State Department's Bohan Plan of 1942, which did not challenge the local oligarchy's right to control the sugar mills but involved the importing of Altiplano campesinos to the underpopulated Santa Cruz territory in the 1950s. It was they who had all the risk-taking thrust upon them: of over-production and a fall in price while faced with a discriminatory quota system, and a need for fertiliser and the debts that this involved. It meant that they - including former miners from Potosí - gave up and became labourers on sugar farms or became more of those pioneers into virgin forest.


Image: Bolivian President Evo Morales chews a coca leaf at a United Nations drug summit

In all these circumstances the obvious irony is that the crop with least income risk is the illegal one, coca, and this despite long periods of murderous repression in all three producing countries. 'It has a secure market that guarantees a steady flow of income to the individual peasant households. This is coca's basic advantage.'37 In Bolivia too, the collapse of the coffee price had a crippling effect on the farmers, and put paid to one element of the UN's Fund for Drug Abuse Control's AGRO YUNGAS programme that began in 1986. Described by Noam Lupu, it tells an exemplary security/insecurity-of-income story augmented by the arrogant, wishful thinking of UN officers bringing with them what Harry Truman had called 'the benefits of our scientific advances.'38 In the case of the Yungas area of Bolivia - the traditional coca growing-and-chewing, and coffee growing valley in La Paz province - the deal was to introduce four high-yield coffee plant varieties from Brazil and Colombia. These required a 'technical package' of fertiliser and insecticides. Several years later only half the plants were in good condition and then a massive infestation of Broca disease destroyed 90 percent of coffee crops, including the local Creole variety. It's like a morality tale of arrogant 'development' added to by wishful thinking. There was no alternative plan when the coffee price fell (60 percent in the period 1986-90).39

Herbert Klein notes that what was special is that coca was overwhelmingly produced on small farms which were grouped into colonies or large peasant unions that were an effective voice for them.40 Adding insult to injury:

grown in combination with food crops it requires less investment and attention than other crops once it has been planted and will only require manual labor and no special skills [...] Also the production of cocaine is not a very elaborate or difficult process [...] the manufacturing process is not capital intensive, does not have large economies of scale, does not require large amounts of skilled labor, and uses production processes that are relatively easy to organize.41


In short, there is no place for the inputs of corporate capital. No capitalist boasts about efficiency. No small farmer indebtedness. And, finally, as Klein puts it, 'for the first time in modern Bolivian history, a primary export product was dominated by small peasant producers.'


This crucial security of income for the coca farmer depends, naturally enough, on the steady demand for cocaine. The evidence that there is such a steady demand in the richer world is well known, and has sometimes prompted under-fire politicians of coca producing countries to tell the richer world that it's their problem. But 'problem' is the most overused word in the vocabulary, and it is rather the case that cocaine is a means of production or, more specifically, a component of the reproduction of certain kinds of labour in this richer world paid for by the person doing the labour. With the growth of the 'white-collar' economy in the late 19th century a new kind of intensity of labour was required and cocaine came into its own. Familiar names like Merck, Parke Davies, and Burrough Wellcome advertised it as both a performance and happy drug. Marek Kohn's comprehensive Cocaine Girls goes on to describe how a mixture of sexual, racial and military-discipline paranoias lead to its outlawing, but that in the meantime:

the [drug using] individuals believed to be particularly at risk from the pressures of modern life were those with the most refined and sensitive nervous systems, those who worked by brain rather than hand; professional men, businessmen and 'new women' [...] trying to make their own way in the world.42


In the present period there has been a revolution of 'brain work' prompted especially by the IT revolution, with a whole section of the population engaged in different forms of the 'digital economy'. This includes both the hitherto burgeoning financial sector and a whole range of the 'creative economy'. It is no longer an 'elite' drug, though one imagines that its relative purity is still class-income based, and there are horror stories. When free-basing was simplified to crack the evidence of its effect on US city ghettos was well documented, though less so that it is a younger ghetto generation who have fought back against the drug and its effect in their neighbourhoods. In the streets of London it is truly depressing to see a 'crack-head' early in the morning making speeches in the street without socks and in a puffa jacket whose zip has broken long ago.

Image: Ricky 'the Hitman' Hatton's coke binge

But this is a small section of the market. Even when it is a dance club drug - it's likely to be used by those in the IT/media/financial worlds given that there is so much sociological evidence of the blurring of work and not-work time. Cocaine is especially suited to work in these worlds because it can create indiscriminate but focused enthusiasm, by which I mean that the most banal piece of advertising or TV trailer can be felt as truly important. Unlike amphetamine whose sense of excitement tends to have a serially digressive effect, cocaine will allow you to stay single-mindedly on the task in hand for long hours.43 It is also especially well suited to a world of overtime and short-term contracts. You are only as good as your last performance, while at the same time you may find your next job while having a line or two socially.

Yet how galling that a drug that is not just illegal but depends on 'backward' farmers working communally (the 'authentic' always preferred to synthetic cocaine) is such an important bio-tool for the 'cutting-edge' economy. Its productive use cannot be admitted. There is, for example, not a single reference to it in Richard Florida's once-iconic book The Rise of the Creative Class. Similarly there has been no reference made to its use in the 'financial sector' in this period, when unrestrained, over-confident risk-taking caused an unprecedented financial crisis which we, the non-bankers of the world, are now paying for. It has not even been mentioned as a possible causative factor, though in the 1990s there were frequent newspaper articles on City of London cocaine use. In coded language they warned that its confidence-boosting quality might become dysfunctional when combined with a 'masters of the universe' view of the world.

A post-crash report by Thomas Penny and Stephanie Baker also concentrates on city traders who are now 'clean' or trying to be 'clean' and makes reference to how:

Professionals in the detox business say bankers have swamped them with calls since the financial crisis widened a year ago...some bankers are questioning whether the diminished rewards of the City are worth sacrificing their health for.44

Given that the 'sacrifice' of health refers to cocaine use, it's clear that it is functional to banking 'labour' but only if the rewards are as astronomical as they have been, and are becoming again; more than enough to buy as much of the best flake as desired at any given time. There is no mention in Baker and Penny's article of any possible link to the financial crash, but rather a highlighting of that macho 14 and 16 hour working day which bankers have long used to justify their fabulous incomes.


Image: When cocaine was good for you

'Fair Trade Cocaine', the Politics of Legalisation

It seems, then, all too fitting that $315 billion worth of illegal drug profits should have been used, as claimed by the UN's drug 'czar', as 'the only liquid capital' available to some banks on the brink of collapse in 2008. To get some idea of the significance of this amount, the IMF estimated that US and European banks losses between June 2007 and September 2009 amounted to $1 trillion. Señor Costa has no need to big-up this phenomenon, the very existence of the War on Drugs and its media support means his organisation will continue to be well-financed. Instead, what his revelation does is to demistify 'money laundering'. There are plenty of accounts of the micro-business of laundering. Selective concern has been prompted by the other endless war, that against Terror. A typical report by AML-CFT might concentrate on the manoeuvring of a Chilean Exchange Bureau, while others would focus on notorious offshore locations. What Costa's assertion suggests is the significance of drug money as capital, i.e. of realised profit to the mainstream banking world and, as Ehrenreich says of the Mexican case, 'The cartels are not revolutionary cells so much as organizations of global capital.'45

Figures extrapolated by Feiling suggest that just one percent of the retail price of cocaine in the USA goes to the Colombian coca farmer; four percent to its processors and 20 percent to its smugglers.46 75 percent therefore is realised in the rich world and, unless some of it can be claimed on corporate expenses, it will be a part of the reproduction of labour power borne by the worker however privileged their job may be. In this way it can honestly be said that a large portion of the consumer price (that which is not spent by smugglers and dealers) will be realised as 'laundered capital'. Other estimates reckon that people working in jungle labs are paid 75 cents a kilo. These disparities and the creation of usable capital on a large scale arise because of a self-interested, ideological, and vindictive War on Drugs; drugs whose production have been made into an underpaid but relatively secure income for peasant farmers by the dynamics of global capitalism.

The mayhem and waste of resources caused by the War on Drugs demands however that we open a debate on the political economy of legalisation. This might start with a comparison with cocoa bean farmers in Ghana who get around seven percent of the price of a chocolate bar. The government of Ghana take a larger share in the form of tax. This is at the very least nominally accountable; some of the profits at least will go into public health and education facilities. As the position of such farmers in Côte d'Ivoire shows there is no guarantee of such a redistribution, but at least decisions over how cocoa income is distributed are nominally open to public input.47

There are no guarantees that coca legalisation wouldn't simply mean the development of corporate cocaine oligopolies and high levels of tax in the consuming countries. It should also be remembered that although coca is also consumed by its producers, it is a cash crop. So far it has been grown alongside farmer-consumed food crops. Might this change, and the dangers associated with monoculture develop were it legalised? Might it also become a substitute for the redistribution of land in favour of the campesinos which is what really matters in Colombia. Bolivia, since the election of Evo Morales, the legalisation of coca and the subsequent removal of the Drug Enforcement Administration from its territory, is a 'test case'. I have heard worries from some Bolivian indigenous people that although cocaine is still illegal, some people have got more involved in it as a business and that this will destroy local communities. The hope is that the coalition which brought Morales to power is too experienced, and too mindful of the value of all its natural resources, for legalisation to turn Bolivia into a mono-crop exporter.

 Image: Andreas Gursky, New York Mercantile Exchange, 2000

As things stand, there is no public space to even ask these questions. World-wide consumption of cocaine has not been dented, and eradication campaigns produce only what is called the 'balloon' effect, an increase of production in other areas and improved coca crop varieties. Peru has recently taken up the slack. All the evidence points to the failure of the War on Drugs, but it is too useful to the dynamics of global capital accumulation and its need for social and neo-colonial discipline to be abandoned. These disciplines involve imprisonment for potentially subversive populations, and interventions, both military and financial, in countries on the geopolitical map. US policy in Colombia and Mexico are visible examples. At the same time the importance of 'laundered money' as capital - money that the official banking system has the power to use - has hovered close to the surface of official recognition. However, there are only ever hints at the real use of this laundered money, and legal proceedings that never quite make such recognition. What is clear is that the imposition of free trade and structural adjustment policies have contributed to the people in the cocaine business -growers, processors and smugglers - taking to it as the most rational form of economic activity. At the same time financial liberalisation has made money laundering that much easier. These consequences are so easy to see, but when it comes to cause and effect, capitalism is always highly selective.

John Barker <harrier AT> works as an indexer

1 Rajeev Sayal, 'Drug money saved banks in global crisis, claims UN advisor', The Observer, 13 October 2009.

2 Ben Ehrenreich, 'A Lucrative War', London Review of Books, 21 October 2010, p.16.

3 Drug Policy News, Drug Policy Education Group, Vol 2 No 1 Spring/Summer 2001.

4 John Barker, 'Intensities of Labour: from Amphetamine to Cocaine', Mute 2006,

5 The shift of attitude during the Potosí silver boom in Bolivia - a boom that was an important kick-start to European capitalist dynamics - began with the Eccelsiastical Council in Lima condemning coca as the Devil Amulet in 1551, and the Holy Inquisition was charged with enforcing it in 1567. But by 1573 silver mine production was so badly affected that King Philip of Spain abolished the prohibition. Just as in the present capitalist crisis, the cost of the reproduction of labour-power was pushed on to the labourers themselves: Coca was taxed. Anthony Henman in 'Mama Coca' estimated the coca market in 17th century Potosí had twice the turnover of food and clothing.

6 For example, US President Taft at the beginning of the 20th century, claimed: 'The whole hemisphere will be ours in fact as, by the superiority of our race, it is already ours morally.' Sentiments later echoed by Theodore Roosevelt.

7 Silvia Rivera Cusicanqui, 'An Indigenous Commodity and its Paradoxes - Coca Leaf in a Globalised World, Indigenous Affairs Journal 1-2 2007, p.62.

8 Main players in the Truman and Eisenhower Administrations included John Moore Cabot, Henry Cabot Lodge and Bedell Smith who all had interests in the company.

9Eeven though heroin was the scare at the time. The relationship between this trend and the Vietnam War was exhaustively described by Alfred W. McCoy at the time.

10 Jorge Hurtado Gumucio, 'Cocaine the Legend', pp. 55-8. He goes on to describe how cocaine is mis-named as a narcotic, to give it place in the 'lazy native' discourse.

11 The 'Drug Czar' title was first coined by current US Vice-President, Joe Biden in October 1982.

12 Academics like Ransalaaer Lee, Eve Bertram and Jeffrey A. Miron; ex-law enforcement officers like Leigh Maddox and Jack Cole; politicians like ex-Baltimore Mayor Kurt Schmoke, Gilberto Gil ex-Culture Minister of Brazil and now ex-President Vicente Fox.

13See Karl Marx, Economic Manuscripts of 1861-63, Part 3, 'Relative Surplus Value', 'The criminal produces not only crimes but also criminal law and with this the professor who gives lectures on criminal law ...The criminal moreover produces the whole of the police and of criminal justice, constables, hangmen, juries etc.'

14 Tom Feiling, The Candy Machine: How Cocaine took over the World, Penguin 2009.

15 Max Singer described how the numbers bump worked (or 'duking the stats' as it is now) in the case of New York City heroin statistics in his article, 'The Vitality of Mythical Numbers', The Public Interest, 1971.

16 See John Barker, 'Armchair Spartans and the "D" Word', Variant, Number 24, Winter 2005.

17 Loic Wacquant, 'From Welfare State to Prison State: Imprisoning the American Poor', Le Monde Diplomatique, July 1998.

18 When the USA was engaged in a not-so-secret destabilisation war against the Nicaraguan government and in the process helped the Contra rebels smuggle cocaine into the USA.

19 Bill Piper of the Drug Policy Alliance misunderstands neoliberal capitalism when he says 'drug policy was one of the few areas where Reagan strayed from his conservative philosophy by expanding the power of the government and undermining the Constitution.'

20 Dan Baum, Smoke and Mirrors, Little Brown, 1997.

21 Pew Center on the Sates, Prison Count 2010,

22 New York Civil Liberties Union, 'The Rockerfeller Drug Laws: Unjust, Irrational, Ineffective',

23Eric Schlosser, 'The Prison Industrial Complex', . The Wall Street outfits with an interest included Merrill Lynch, Sheason Lehman and American Express

24 Lynne Duke, 'Building a Boom Behind Bars', Washington Post, 8 September 2000.

25 This can be seen in several phenomena, such as the leasing and buying of large tracts of land in Africa by the capitalist corporations either on their own or with sovereign wealth funds; the concentration of capital in the biotechnology sector; the development of 'terminator' seeds. There is push by large capital to control all the basic necessities of life.

26 Import quotas in favour of domestic production saw sugar imports in general fall by 80 percent between 1975 and the early 90s.

27 Marceline White, et al., Women's Edge Coalition, 'NAFTA and the FTAA: A Gender Analysis of Employment and Poverty Impacts in Agriculture', Trade Impact Review: Mexico Case Study, Washington DC, 2003 p iii.

28 Ben Ehreenreich, op. cit,. P18.

29 Christoher Thompson, 'Fears for stability in west Africa as cartels move in', The Guardian, 10 March 2009.

30 Ibid

31 For descriptions of this dirty business see publications of the Environmental Justice Network.

32 Héctor Mondragón, 'Colombia: Agrarian Reform, Fake and Genuine',, 5 September 2005.

33 Colombia does have its own specific historical characteristics, though it is hard to know the weight of their significance. Francisco Thoumi points to the deligitimisation of the state which precedes the more general trend in this direction in other underdeveloped countries. While in 'The Political Economy of the Drug Industry of Colombia' Menno Vellinga talks of a 'production-speculation mentality with little investment in long-term equipment, a focus on commerce, quick turn-over and high short-term profit as conducive to the illegal drug industry.' Since this sounds rather like the UK it's hard to know how distinctive this makes Colombia.

34 In an instance described by Gary Marx, campesino-coffee bean selling entailed a five hour mule journey to the point of sale, Chicago Tribune,19 April 2003.


3636 Thomas Lines cites Oxfam on the loose arrangement in export horticulture for example, 'Agreements are often verbal, so there is no written contract to break [...] Such informality gives buyers flexibility to delay payments, break programmes, or cancel orders, forcing suppliers to find last-minute alternatives.' See Making Poverty, Zed Books, 2008, p.105.

37 Menno Vellinga, The Political Economy of the Drug Industry, University of Florida Press 2004, p.4

38 Development Policy Review 2004 22 (4) 405-21

39 Lupu's scathing account talks of a 'counterproductive conditionality on credits, a narrow vision and emphasis on short-term success, blind adherence to pure economic competition model, inadequate market appraisal of viable alternative crops, and paternalistic attitudes. Dominic Streatfield also mentions how the one instance of an Agro Yungas success, a soya project, brought down the wrath of US soya farmers.

40 Herbert S. Klein, A Concise History of Bolivia, Cambridge University Press, 2003, p. 246-8.

41 Vellinga, op cit, p.5

42 Marek Kohn, "Cocaine Girls", Lawrence and Wishart 1992 p.106

43 There is a perverse mirroring here where crack users have spoken of the pleasure they get from 'running about' and 'being on a mission'. Desribed in Alex Harocopos et al., 'On the Rocks: A Follow-Up Study of Crack Users in London', Criminal Policy Research Unit, South Bank University, 2003.

44 Stephanie Baker and Thomas Penny, 'Cocaine Survivors Losing London Bonus See End to Bubble's Binge',, 8October 2009.

45 Ben Ehrenreich, op. cit., p.18.

46 Tom Feiling, The Candy Machine: How Cocaine Took Over the World, Penguin 2009 pg.177

47 For details see Orla Ryan, Chocolate Nations, Zed Books 2010 (forthcoming).

A version of this text first appeared as 'NOID - The Long Memory of Cocaine' in The Long Memory of Cocaine  research group journal Vol.1 No.1, co-published by Max Jorge Hinderer and Museo de la Coca/Coca Museum La Paz, on occasion of the exhibition Principio Potosí, MNCARS Madrid/HKW Berlin/MNA La Paz, 2010-2011.