Framing people who deal drugs as predatory individuals who care not for their clients’ wellbeing rests on a fundamental misunderstanding of how the drug trade works and risks pushing aggressive law enforcement efforts further onto low-level actors in the trade.

The idea that people who deal drugs are unscrupulous, even evil people has consistently been pushed by policymakers and the media, feeding into government aims to ultimately deter people from using drugs. People who deal will do anything to maximise their profits, we are told, including cutting substances with harmful adulterants such as brick dust, glass and rat poison.

The above messaging is sadly not always confined to those who wish to maintain the status quo of a punitive approach to drug use. In certain drug policy reform efforts, there is a tendency to implicitly demonise people who deal in order to advocate the protection and wellbeing of people who use drugs.

The evidence suggests, however, that contrary to the narrative of the “dangerous drug dealer,” people who engage in this activity, believe it or not, care about the health of their customers. In fact, those who deal – particularly at the street level – face strong incentives to keep their buyers not only alive, but reasonably satisfied with their product. To do otherwise would cause a swift erosion of their customer base.

Cutting drugs: the evidence

Purity data, collected by the UK’s Serious Organised Crime Agency, gives some insight into the extent to which drugs are adulterated. Taken from forensic tests conducted on UK police drug seizures, it shows that despite increases over the last five years, the purity of commonly used drugs tends to be low generally less than 50 per cent.

Domestic resale mean percentage purity of certain drugs seized by police in England and Wales, 2003-2014

Whilst this seems bleak, to conclude that the market is riddled with lethal adulterants would be incorrect. CUT, a 2010 report authored by a collective of public health professionals, found that in a number of cases, such as that of amphetamines, cutting agents are largely “benign,” and include caffeine and sugars.

In the case of cocaine, the picture is slightly more complicated: whilst the most common adulterants are still caffeine, sugars, and amphetamines, benzocaine was found in 63 per cent of UK street-level seizures of powder cocaine in 2013. A local anaesthetic commonly used in cough drops and by dentists, benzocaine is relatively harmless, and is used because it’s cheap and mimics the numbing effect of cocaine.

Less benign is the cutting agent phenacetin (a carcinogenic pain relief drug) traces of which were found to be in 91 per cent of street-level crack cocaine seizures in 2013.

Though there are certain potentially harmful adulterants used in the cutting process, it is crucial to note that much of this does not happen immediately prior to sale. Indeed, forensic insight has shown that most adulteration takes place before the product reaches the street dealer, occurring as it passes through various higher-level suppliers within or outside the country.

The reality is that the street dealer is the very last link in a long supply chain. They may be someone who uses the product they are selling, and they are the final point of contact before the drug reaches the buyer. As a result, they have by far the strongest incentives to refrain from harmfully adulterating their drugs.

Cutting drugs: the economics

Extensive economic analysis of the illegal drugs market has shed some light on how these incentives work. In a market for “experience goods” like drugs, whose quality is difficult to ascertain up front, sellers would ordinarily have high incentives to exclusively sell “rip-offs” i.e. products with almost 0 per cent quality. This effect, termed “moral hazard” by economists, should be exacerbated by the fact that there are no consumer rights within the market for illegal drugs: if you get ripped off, you have no avenues for legal complaint.

In fact, the incidence of rip-offs is surprisingly low: around 5-10 per cent, according to research on data from the US Drugs Enforcement Agency (DEA) from 1981-2003. Further investigation of the drug market’s structure reveals why.

Law enforcement pressure drives the market underground and causes fragmentation, such that both dealers and users have limited knowledge of its structure and players. As a result, the success of the market is highly dependent on networking and trust, both in terms of who a dealer might choose to work with, and who a user might choose to buy from. Consumers in particular might face difficulties in finding a new dealer with whom they can be satisfied.

As a result, the market has a high incidence of what in game theory terminology is called “repeated interactions”: dealers and users making deals over and over again. What’s more, users will often find a new dealer through recommendations from friends. The reputation of a dealer, therefore, is paramount to their success.

Studies show that this reputation actually has a calculable monetary value, known as “reputational capital”; a good reputation amasses extra profits for dealers, as buyers will choose them over others. Since this will continue as long as they decide not to cheat their customers, the incentives fall into place for dealers to provide as clean and safe a product as they can – given the adulteration that has occurred at higher levels of the supply chain – and to continue doing so.

Research by the Home Office from 2007 shows that this is interpreted as an informal contract between buyers and sellers, the power of which can even induce sellers to avoid passing on price increases to their customers.

Crucially, this goodwill only lasts if the dealer faces some level of competition, and if they can be assured that they will continue to get repeat custom. If a repeated interaction is coming to an end, experimental evidence from behavioural economists shows that the quality of a good will plummet. This “endgame effect” also explains why the quality of drugs bought at festivals and in clubs tends to be much lower than average: if the dealer is unlikely to see the same customer again, the incentives for them to provide a decent product fall away.

The idiosyncrasies of the drugs market have therefore created a startling bind for law enforcement: increased enforcement actually creates more of a tendency to build networks based on reputation, and subsequently could increase quality in the market.

The policy implications

Taken together, the evidence underscores that the drug market is not simply a case of the innocent individual who uses drugs and the predatory supplier. There are significant shades of grey throughout the various levels of interaction. With regards to policy, this highlights that in any talk of reform there is a pressing need for nuance.

Reformers must be careful to expand the conversation about curtailing harsh drug laws to include other low-level actors in the trade, not just people who use drugs. Otherwise, there is a risk that people who deal drugs – and who crucially do so in a non-violent manner – will be left behind and potentially bear the brunt of punitive law enforcement efforts to tackle the drug trade.