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Methamphetamine (Ice, Speed, Crystal Meth, etc.) has quickly emerged as one of Australia’s most consumed illicit goods, labelling the surge in its use in the early 2000s as an ‘ice epidemic’. With lofty social, economic, and health related costs, the Australian government acted swiftly to wage war on the methamphetamine market, which is shaped by both domestic demand and transnational supply. Australia is often viewed as an ideal market for the distribution of the drug, as it has some of the highest global retail prices and rising markup costs, modelling it as particularly attractive to international traffickers and dealers. This essay argues and explains how the trends of methamphetamine in Australia are explained by concepts of globalisation and illicit markets. Globalisation facilitates the multinational movement of illegal goods (drugs, weapons, information, money, etc.), whilst illicit markets, both physical and digital (darknet crypto markets), explain how demand fluctuates and operates in an illegal goods market and why supply persists despite prohibition. With the integration of historical, criminological, economic, and sociological perspectives, and with the implementation of theories such as the criminogenic asymmetries, balloon theory, and the iron law of prohibition, this essay will highlight the resilience of illicit markets, limitations of law enforcement and prohibition based interventions and crackdowns.

Globalisation, Production, and Trafficking

The creation of modern day transnational illicit markets is mainly due to globalisation. Substances labelled currently as illicit, such as coca, cannabis, and opium, were harvested and consumed locally for millennia before globalisation opened the door to international trade and expanded distribution (Inkster & Comolli, 2012). A clear demonstration of how illicit markets grow and thrive when influential actors leverage and manipulate demand and prohibition would be the nineteenth century opium wars in China, which created international trade flows and routes that persist to this current day. The criminogenic asymmetries theory highlights the division of labour in modern drug trades and syndicates, and it portrays developed Western nations as consumers and demanders of substances, less developed non-Western nations as producers and suppliers and geographically strategic nations as transit routes and flows (Naím, 2011). A prevalent example of this is South American nations like Colombia, Bolivia, and Peru, which account for around 80% of the world’s cocaine production, while Mexico serves as a strategic transit nation for a slew of drugs, including methamphetamine and cocaine, which are destined for Canada and the United States (Moreno-Sanchez, Kraybill & Thompson, 2003). Though multiple attempts to halt the production of substances such as coca and Meth have occurred through interventions and prohibitions, they have been met with overwhelming failure. Plans such as the global war on drugs and the American ‘Plan Colombia, ’ which was an initiative aimed at combating the increasing trafficking of cocaine into the United States through the use of spy technology. These plans ultimately led to the ‘balloon effect’, meaning that while the production of the substance in some areas subsided, cultivation intensified in other areas (Moreno-Sanchez, Kraybill & Thompson, 2003). This theory spotlights how global demand for illicit substances influences not only the market but also the resilience and persistence of the supply chain, and although prohibition increases risk, that affects the prices along the distribution chain rather than the supply, which adapts quickly (Caulkins & Reuter, 1998). Furthermore, trading, and trafficking routes have reformed from stiff and rigid systems such as the Silk Roads and the South American ‘cocaine corridor’ to flexible, hard to penetrate and virtually digital (Natarajan, 2006). As a consequence, increased globalisation evidently enhances not only the potential profitability but also the resilience of illicit markets, therefore rendering prohibition a weaker control strategy.

Limitations, Prohibitions, Resilience, and Domestic Harm

Domestic prohibitions have reshaped all sorts of illicit markets in ways that often increase risk and harm but also boost resilience and innovation. The iron law of prohibition was initially observed in the United States during the prohibition and the increased laws surrounding alcohol. After the introduction of heavy limitations linked to alcohol, it was observed that more potent substances entered circulation (Thornton & Oerther, 1993). When this dynamic is applied to the case of the methamphetamine market, the transition is evident, from meth in its powdered form (“speed”) to its crystallised hard form (“ice”), it has become not only more potent, but easier to conceal and more profitable. Domestically, the availability of methamphetamine in all forms has sharply escalated since the early 2000s (Chrzanowska et al, 2024), thus correspondingly increasing harm indicators despite prohibition, heavy law enforcement and increased research like the creation of the National Drug and Alcohol Research Centre (NDARC). Moreover, the differentiation of illicit market types further complicates prohibition; ‘open air drug markets and street dealers are amongst the most vulnerable to drug related violence and intervention from law enforcement, compared to ‘semi-open’ or ‘closed’ drug markets, such as digital crypto and darknet markets, which are protected via encryption; alongside physical markets that rely on social connections, such as suppliers at events including festival, parties, etc. (May, & Hough, 2004). The varied market forms portray how prohibition does not terminate the trade of illicit substances, but rather increases the risk factor. Due to this increased factor, buyers are in danger of consuming adulterated or ‘laced’ substances with uncertain potency, potentially ending in increased health harms and fatal outcomes.

Darknet, Digital and Crypto Markets

The emergence of dark and crypto illicit markets has overhauled the supply chain and trade systems through the utilisation of anonymity often guaranteed by technology. Crypto markets are online forum markets where users trade and make purchases under fake aliases and online names, employ advanced encryption systems and exploit mailing services to ensure safe passage and avoid interference by law enforcement (Martin, 2014). Australia has been an early and leading embracer of crypto drug exchanges, with a high online vendor activity level (Martin et al, 2018). Digital markets are rapidly gaining popularity and experiencing a surge in the user base. Virtual markets appeal to consumers and sellers alike, as they eliminate the previously risky process of the final financial exchange, leading to a reduction in the traditional price, decreasing drug related violence, minimising reliance on organised groups such as cartels and mafias and ensuring an overall increase in product quality. Interviews and surveys of vendors and consumers carried out showed that an overwhelming majority perceive crypto and digital markets as safer, cleaner, easier to navigate and more profitable. Respondents expressed a reduced risk or threat of violence, freedom from organised crime groups and hierarchical systems, and a sense of comfort not found in an open-air market (Moyle, Childs, Coomber, & Barratt, 2019). Also, prioritising digital markets helps vendors cater towards the demands of the customer more clearly as they experience a simpler time gathering data related to the wants of their customer base. This evolution of drug dealing and trafficking displays the adaptation illicit markets undergo to keep pace with changing world events and increasing law enforcement.

Organised Crime Groups and Syndicates

Organised crime groups are essential to the existence and operation of illicit markets. Crime groups provide logistics, create routes and distribution channels, and provide protection. Crime groups such as La Cosa Nostra and the Sinaloa cartel are often described as a pyramid-based hierarchical system with a leader or multiple leaders at the top, then layers of members coordinating every phase of the drug trade. However, methamphetamine supply chains are uniquely structured, as a flexible and decentralised series of networks rather than a solid hierarchical system (Natarajan, 2006)(Malm and Bichler 2011), and actors are appointed a multitude of roles rather than a single one. Organised group crimes in Australia that engage in the substance trade and trafficking tend to prioritise the three main drug types, including cannabis, cocaine, and methamphetamine, as they are seen as the most profitable by Groups such as Asian syndicates, European groups, and motorcycle gangs, which are all prevalent examples of organised groups that operate within Australia. Methamphetamine’s high value-to-weight ratio and price markup are due to increased trafficking risk as Australian border patrol are stationed and ready to engage and bust drug syndicates. Furthermore, organised syndicates amplify the balloon effect when they embed themselves into global supply chains, and when a route or part of the group is busted, they move quickly to adapt and exploit the next best alternative or create one. These groups are solely motivated by profit and look to maximise potential earnings whenever possible, thus sustaining the iron law of prohibition, as whenever possible, groups choose cheaper quality material or increase potency to aim for higher returns on investment, which leads to an increase in the harm and danger to the consumers.

Law Enforcement and Policy Response

The illicit substance markets have been proven to be a real challenge for law enforcement. Customs and postal services experience a vast volume of goods moved through the global trade daily and cannot conceivably inspect each shipment; this signifies that most small shipments of substances go undetected (UNODC, 2019). Gathering sufficient amounts of evidence to investigate drug trafficking takes a significant amount of time, and small seizures often lead to low-level possession charges rather than targeting and dismantling large syndicates and supply chains. Cyber investigations and sting operations often yield the best results. Operation Onymous was a successful cyber operation launched with the aim of tackling and closing the largest crypto market at the time, ‘Silk Road 2’, although a slew of similar websites opened for business shortly after (ABC News, 2014). The flexibility, decentralisation, and simple barriers of entry into digital crypto and darknet illicit markets mean enforcement is costly and reactive or often ineffective. Furthermore, prohibitions placed by governmental bodies and agencies are limited, and public support in Australia is steadily moving towards reducing potential harm and danger through health-based approaches, such as injection rooms and testing stations, rather than criminalisation (NDARC, 2020). Using evidence from prior prohibition periods, such as the aforementioned United States prohibition on alcohol, it is clear that while use may be temporarily reduced through heavy criminalisation and limitation, it leads to long-term health risks, increased violence and violent crime levels, corruption, and organised crime. Therefore, a perfect median must be found to strike a balance between enforcement and risking public health; without these shifts, we risk a repetitive cycle of displacement, systematic harm, stigma, and violence.

Illicit substance and drug markets portray the interconnectedness between prohibition, globalisation, organised crime, and enforcement. From the first steps of production to the sale of the illicit good, these processes always adapt and display resilience. Limitations not only fail in suppressing the supply chains and drug use, but often intensify potential harm by driving potency, lowering quality, increasing the risk of adulteration, and amplifying violence. Cyber markets and crypto-based darknet forums reformed distribution and addressed the multitude of concerns surrounding illicit substances and the sale of these goods, yet prohibition, criminalisation and law enforcement remain reactive and vocal in their attempts to suppress these markets. Through the use of evidence and history, it is clear that prohibition alone cannot address this issue, but instead leads to amplified issues and complexities, therefore making the need for a balanced middle ground all the more important.