Over the past few decades criminal gangs in Latin America have diversified their businesses. They no longer just smuggle narcotics from South America to the United States, as Pablo Escobar, Colombia’s most notorious drug lord, did in the 1970s and 80s. Now they also are involved in illegal gold mining, human trafficking, synthetic-opioid production (particularly fentanyl), along with extorting those who operate in perfectly legal markets, such as farming avocados and limes.

Even so, drugs remain an integral part of their business model. In 2020, for example, global production of cocaine hit a record high of 1,982 tonnes, according to the United Nations Office on Drugs and Crime (UNODC), though that is likely to be an underestimate. North America remains the biggest consumer of the drug, with around 2% of people aged 15-64 (or 6m people) estimated to have taken it that year. But the global reach of cocaine is spreading. Guinea-Bissau has become an important route for South American cocaine bound for Europe. An attempted coup earlier this year, in which gunmen attacked the presidential palace, was blamed on drug gangs. Much European cocaine is imported through Rotterdam in the Netherlands, which has led to an increase in gang violence there. The head of a Dutch police union has warned that the country risks becoming a “narco-state”.

Cocaine remains an important part of gangs’ revenues not because it is addictive but because it is so profitable. Estimates on how much a kilogram of the drug costs in various places vary because, as with any illegal market, it is tricky to study. The UNODC, however, publishes a range of estimates which show just how big the profit margins can be. In 2019, the latest year for which data are available, a kilo of cocaine in Colombia typically cost $1,491 at wholesale prices. In Mexico that kilo was $12,433 at wholesale prices. In El Salvador it is $28,873.

But the real profits come from outside Latin America. A kilo at wholesale prices in the United States typically cost $69,000 in 2019. The farther it goes, the more expensive coke becomes. In China, where some Colombian gangs are reportedly hoping to boost their profit margins even further in the next decade or so, a kilo cost $69,380 in the mainland and $72,510 in Hong Kong. In Australia a kilo in 2017, the most recent prices available, typically cost $152,207.

So long as cocaine remains illegal in rich countries, gangs will continue to funnel their profits into recruiting members, buying weapons and corrupting officials. Legalisation would cut into the gangs’ main source of income and make the product safer. That is why The Economist is arguing that it is time to legalise the stuff.