The illegal production and distribution of drugs has become a multibillion-dollar industry that has allowed criminal organizations to generate exorbitant profits while evading payment of taxes, thereby placing additional tax burdens on American citizens and legitimate business enterprises. Further, the illegal drug trade has taxed the resources of law-enforcement organizations at the local, state, and national levels and has forced many American businesses to spend considerable sums to combat the effects of drugs in the workplace.

Drug trafficking is not a new phenomenon in the United States. In the eighteenth and nineteenth centuries, narcotics such as opium and morphine were often-prescribed medications, and both legal and illegal networks were established to import these drugs from the Middle East and Asia. At that time, most Americans were unaware of the long-term ill effects of addiction and turned a blind eye to the establishment of opium dens and the widespread availability of morphine and other narcotics. By the early twentieth century, however, the public became alarmed at the dangers of addiction, and the U.S. government began taking serious steps to curb the importation and sale of narcotics.Drug trafficking

Congress passed the Harrison Act of 1914Harrison Act of 1914 and the Narcotic Drugs Import and Export Act of 1922Narcotic Drugs Import and Export Act of 1922 to regulate production and distribution of certain narcotic substances. In 1930, the Federal Bureau of Narcotics (FBN) was established to enforce laws regarding drug sales and use. Trafficking persisted, however, largely because enormous profits were available to those willing to risk penalties and jail time to supply a population addicted to substances such as opium, heroin, and morphine.

Although early traffickers were often loosely organized to facilitate the importation, distribution, and sales of illegal drugs, over time groups engaged in illegal trafficking developed more sophisticated models for managing the drug trade. Surprisingly, despite their involvement in protection rackets, prostitution, illegal gambling, and loan sharking, until the 1940’s most Italian Mafia leaders insisted that their outfits avoid dealing drugs. Organized crime;drugsA few, notably Charlie “Lucky” Luciano of New York, defied this prohibition and used their organizations to oust other gangs from the drug trade and develop sophisticated networks for importing and selling drugs in the United States. As a consequence, in some cities, drugs were readily available to ordinary working men and women whose habits had an impact on their effectiveness in the workplace.

During the early decades of the twentieth century, most businesses did not take steps to help rehabilitate drug users, preferring simply to assist law enforcement in dealing with users as criminals. During the 1930’s, some forward-looking companies such as Eastman Kodak and E. I. DuPont established employee-assistance programs designed to aid workers whose performance was being affected by drugs and alcohol. There was not widespread recognition, however, of the deleterious effect that an easily accessible supply of drugs was having on the workforce.

During World War II, drugs became less readily available in the United States, as traffickers found it exceedingly difficult to import drugs from overseas areas where conflict was raging. Almost immediately after the war ended, however, trafficking picked up again. At this time, the Mafia became the principal supplier of illegal drugs. Its extensive network, organized in a fashion similar to an American corporation, provided a means for smuggling drugs into the country through ports (and later air terminals), where it controlled many of the operations. The Mafia also developed an efficient system for distributing drugs to users and an effective, sometimes ruthless, method for collecting payments. Frequently, traffickers used legitimate businesses such as pizza parlors as “fronts” for the sale of their products. By 1970, the Mafia controlled 80 percent of the market.

The availability of illegal drugs made possible one of the most important revolutions in American lifestyle during the 1960’s, the creation of the “drug culture” associated with Vietnam WarVietnam War protests and with a general rebellion among young people against established social norms. In addition to illegal narcotics, users began experimenting with mind- and mood-altering substances such as amphetamines, barbiturates, and the hallucinogen lysergic acid diethylamide (LSD). The presence of more than a half-million Americans in Vietnam facilitated the establishment of a strong network between American traffickers and suppliers in the Golden Triangle–Thailand, Burma (later Myanmar), and Laos. At the same time, a movement to deal with drug users by employing a social-services model of treatment and rehabilitation began to gain favor across the country. The public began to recognize that the real criminals were traffickers, who were profiteering on the illicit sales of addictive substances.

In 1971, President Richard M. Nixon declared a War on DrugsWar on Drugs, and in 1973, the Drug Enforcement AdministrationDrug Enforcement Administration (DEA) was created by combining a number of federal agencies that had been involved in combating the sale and use of illicit substances, including the Federal Bureau of Narcotics. The need for interdiction was apparent: A 1977 study ofdrugs in the workplace revealed that substance abuse was responsible for lost productivity, increased medical and accident insurance expenses, and an increase in property crimes–both by employees who pilfered from their employers and by others who stole to generate money to support their habits. Neighborhoods known for heavy drug trafficking and use were seen as unsafe for many business operations. Under President Ronald Reagan, efforts to eradicate drug trafficking increased during the 1980’s, and the federal government began what became a multibillion-dollar investment in enforcement and education to deal with the problem. Both the DEA and the U.S. military began active operations in foreign countries to destroy crops from which illegal drugs could be manufactured.

During the 1970’s and 1980’s, as the federal government began a campaign to eliminate Mafia influence in the United States, new groups–mainly African American, Asian, and Latino gangs–took over the drug trade. Many of these groups received their drugs from Latin American countries via Mexico, although sources in Asia and the Middle East continued to supply American markets. As the Mafia had done in America decades earlier, supplier organizations in Latin America and Asia developed complex, hierarchical business structures that permitted those at the top to accumulate significant wealth, much of which was reinvested in legitimate businesses or used to buy protection from complicit government officials. In some developing nations, drug production was a means of generating income for much of the population, so participation in drug trafficking was often ignored or even quietly abetted by the government.

Between 1980 and 2000, a steady influx of drugs into the United States caused the price for many substances to fall. It thus became easier for users to support their habits, and the number of drug users increased, exacerbating the problem for law enforcement and, by extension, for American businesses. Although it is difficult to obtain precise figures, one 2000 estimate placed the value of worldwide drug trafficking at $400 billion. DEA estimates for 2005 suggested the value of illegal drugs sold in the United States was $64 billion.

While law-enforcement officials stepped up their attempts to curb trafficking, businesses became more aggressive in establishing programs to assist users. Pre-employment screening and random testing were introduced into the workplace at a number of companies. By 2000, nearly 90 percent of America’s larger firms were conducting some form of screening or testing. Substance-abuse treatment and counseling programs proliferated nationwide in response to the perceived epidemic of drug use, creating jobs for thousands in the social work field and generating millions of dollars in expenditures on cures and rehabilitation. Concurrently, during the last decades of the twentieth century, an increasing number of habitual users and traffickers–mostly low-level street dealers–were imprisoned, creating an additional drain on tax dollars but creating jobs as well in both state-run and privately managed prisons. Indeed, private prisons constituted a new industry that sprang up to deal with the country’s growing prison population, a population in which many inmates were guilty of drug-related offences.

• Battacharya, Gargi. Traffick: The Illicit Movement of People and Things. London: Pluto Press, 2005. Explains the relationship of drug trafficking in America to the worldwide network involved in promoting the growth, distribution, and sales of illegal substances.
• Bauder, Julia, ed. Drug Trafficking. New York: Greenhaven Press, 2008. Collection of essays examining the nature and ramifications of drug trafficking in the United States and other countries. Examines the economic impact of the drug trade and its relationship to international terrorism.
• Booth, Martin. Opium: A History. New York: Simon & Schuster, 1996. Includes a chapter on America’s century-long struggle to control drugs, as well as one on the business aspects of drug trafficking.
• Clutterbuck, Richard. Drugs, Crime, and Corruption: Thinking the Unthinkable. New York: New York University Press, 1995. Traces the history of drug trafficking worldwide. Examines the economic impact of that trade and efforts by the United States and other countries to thwart those engaged in it.
• Kopp, Pierre. Political Economy of Illegal Drugs. New York: Routledge, 2004. Concentrates on the economic impact of drug trafficking and consumption worldwide. Analyzes problems posed by this enterprise in the United States. Includes a bibliography of additional source materials.
• Lyman, Michael D., and Garry W. Potter. Organized Crime. Upper Saddle River, N.J.: Prentice-Hall, 1997. Includes a chapter on the involvement of organized crime in the sale of illicit drugs in the United States. Describes methods of importation, manufacture, and distribution and provides a history of the growth of illegal drug sales in America.
• Reppetto, Thomas A. Bringing Down the Mob: The War Against the American Mafia. New York: Henry Holt, 2006. Describes the Mafia’s involvement in the sale of illegal drugs. Explains how the drug trade exploded during the 1970’s and 1980’s and how the Mafia was displaced in drug trafficking activities by other crime groups.

Food and Drug Administration

U.S. Department of Justice

Organized crime

Pharmaceutical industry

Prohibition

Racketeer Influenced and Corrupt Organizations Act