Do governments encourage criminal behaviour?

Yesterday we heard that the tusks from 7,000 dead elephants, which had been confiscated by Kenya from illegal poaching of ivory, was set afire. Kenya’s President is hoping that this will help end the illegal trade which kills elephants.

But what is the consequence of reducing the supply of ivory for which demand continues to grow? The law of supply and demand suggests that this will simply drive up the price. Higher prices, of course, make illegal poaching more profitable and thereby encourage more criminal behaviour.

Similar reasoning applies to situations where authorities as part of a “war on drugs” confiscate illegal drug shipments. Drug scarcity increases profits for the gangs participating in drug trafficking.

Is this part of the plan? Or are governments simply blind? A case can be made for the latter, as there seems to be a widespread lack of understanding of simple economics. A number of years ago, environmentalists were united in decrying the practice in Brazil of clearcutting or burning jungles to the ground to make fields for raising cattle. A suggestion was made at the time to boycott exotic woods such as rosewood obtained from these same jungles. But again, a boycott would increase the supply, drive down the price, and make the jungle even less valuable and more likely to be clearcut or burnt to the ground.

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