Washington and Lee Law Review Volume 69 | Issue 2 Article 11 Spring 3-1-2012 Drug Markets, Fringe Markets, and the Lessons of Hamsterdam Lance McMillian Follow this and additional works at: https://scholarlycommons.law.wlu.edu/wlulr Part of the Commercial Law Commons Recommended Citation Lance McMillian, Drug Markets, Fringe Markets, and the Lessons of Hamsterdam, 69 Wash. & Lee L. Rev. 849 (2012), https://scholarlycommons.law.wlu.edu/wlulr/vol69/iss2/11 This Article is brought to you for free and open access by the Washington and Lee Law Review at Washington & Lee University School of Law Scholarly Commons. It has been accepted for inclusion in Washington and Lee Law Review by an authorized editor of Washington & Lee University School of Law Scholarly Commons. For more information, please contact [email protected]. Drug Markets, Fringe Markets, and the Lessons of Hamsterdam Lance McMillian* Abstract The Wire is the greatest television series of all-time. Not only that, it is the most important. One of the most memorable story arcs from The Wire’s five seasons is the rise and fall of Hamsterdam—a quasi-legalized drug zone in West Baltimore. Stories are powerful teaching tools because they marry information and context. By seeing how the application of law affects characters we know and care about, we become more attune to the potential effects of legal decisions in the real world. The story of Hamsterdam—which is essentially an attempt to transform a black market into a fringe market—presents just such an opportunity. When considering the various dimensions of the fringe economy, life in Hamsterdam imparts three critical insights: (1) Markets arise wherever there exists market demand. Drug dealers exist because sufficient numbers of people desire to use drugs. When one drug dealer in The Wire is taken off the streets through incarceration or death, another drug dealer readily takes his place. Similarly, the fringe economy exists because enough people perceive a need for the services it offers. And where there is demand, there is supply. The lasting lesson is that the fringe economy is going to exist whether we like it or not. (2) Legalization and regulation, not prohibition, represent the best method for controlling the negative externalities of fringe markets. A key aspect of the Hamsterdam covenant between the police and the drug dealers centers on its mutuality of promises. The police promise immunity for all dealing within Hamsterdam’s confines; the dealers agree not to deal anywhere else. In essence, * Associate Professor, Atlanta’s John Marshall Law School. B.A., University of North Carolina at Chapel Hill; J.D., University of Georgia School of Law. 849 850 69 WASH. & LEE L. REV. 849 (2012) the dealers consent to submit to regulation in exchange for legalization. Prohibition, conversely, precludes this type of agreement because it drives drug dealers and others who trade in outlawed goods into the shadows away from law’s light. Black markets inevitably fill the void created by these outright legal bans, transforming a regulatory problem into a law enforcement problem. A rise in violence necessarily follows, as the suppliers of black market goods become responsible for enforcing their own norms in law’s absence. The lesson for policymakers is that regulating a fringe economy can often induce better behavior from questionable economic actors than the alternative of policing an underground economy. (3) Mustering the political will to provide legal sanction to the fringe economy is a difficult, if not impossible, task. Hamsterdam fails because Baltimore’s politicians fear that embracing its success will lead to electoral defeat. Regulation is a tool of nuance; prohibition is a blunt instrument. Even though the former promotes the greater good, voters better understand the latter. The Wire teaches that this reality presents a structural impediment to genuine reform. In a political world where courage is in short supply, the possibility of real change is illusory. The lesson is that innovative thinking in handling the problems created by the fringe and underground economies will likely meet significant resistance at the point of implementation. Good ideas will remain untested, and long-term problems will continue unaddressed. Table of Contents I. Introduction ..................................................................... 851 II. Hamsterdam .................................................................... 857 A. An Existential Cop .................................................... 858 B. The Birth of an Idea .................................................. 858 C. The Crime Statistics Shuffle ..................................... 860 D. Transformation .......................................................... 861 E. The Dark Side of Success .......................................... 862 F. Councilman Tommy Carcetti .................................... 862 G. Mayor Clarence Royce ............................................... 863 H. The Fall of A Good Man ............................................ 863 DRUG MARKETS, FRINGE MARKETS 851 I. Tearing Down Hamsterdam ...................................... 864 III. Hamsterdam and the Inevitability of Markets ............... 864 IV. Hamsterdam and the Futility of Prohibition .................. 873 V. Hamsterdam and the Politics of Prohibition .................. 882 I. Introduction The Wire is the greatest television series of all-time.1 Not only that, it is the most important.2 The transcendental quality of the show lies in what it teaches those of us living in the United States about ourselves. Even when we as a society know the right thing to do, our decaying institutions lack the capacity to act. The ineffectual status quo continues unabated. This feeling of impotence is so jarring to viewers because we immediately know it to be true: our institutions are broken.3 From this perspective, The Wire is not just a television show; it is an expose on the slow decline of America in the twenty-first century. One of the most memorable story arcs from The Wire’s five seasons is the rise and fall of Hamsterdam, detailed more fully in 1. The Wire (HBO television broadcast June 2, 2002–Mar. 9, 2008). Tributes to the greatness of The Wire abound. See Dan Rowe & Marti Cecilia Collins, Power Wire: Understanding the Depiction of Power in TV, 2009 J. INST. JUST. INT’L STUD. 182, 185 (noting The Wire’s “rare combination of critical success and cult status”). Even President Barack Obama named The Wire as his favorite show. See Michael A. Fletcher, Barack Obama: Wire Fan, in THE WIRE: TRUTH BE TOLD 37–38 (2009) (noting President Obama’s enthusiasm for the show and suggesting that it stems from an understanding of the show’s depiction of urban America). 2. Renowned Harvard sociologist William Julius Wilson credits The Wire as the leading educational tool on the problems facing urban America: “[The Wire] has done more to enhance our understanding of the challenges of urban life and the problems of urban inequality than any other media event or scholarly publications, including studies by social scientists.” Amanda Fairbanks, Deconstructing ‘The Wire,’ N.Y. TIMES, Jan. 3, 2010, at ED4 (quoting Wilson), available at http://www.nytimes.com/2010/01/03/education/03wire- t.html. 3. See J.M. Tyree, Review of The Wire: The Complete Fourth Season [DVD], FILM Q. 61.3, 32, 38 (Spring 2008) (“The Wire is in the business of telling America truths about itself that would be unbearable even if it were interested in hearing them.”). 852 69 WASH. & LEE L. REV. 849 (2012) Part II of this Article.4 Bunny Colvin, a high-ranking police officer on the verge of retirement, suffers an existential crisis prompted by the ongoing futility of Baltimore’s drug war.5 His novel response is to create quasi-legalized drug zones, which are quickly dubbed “Hamsterdam” by the drug dealers who populate them.6 Colvin’s calculus is straightforward: by concentrating the worst elements of his district in discrete locations, he improves the quality of life for the law-abiding majority everywhere else. The experiment proves a stunning success—until the politicians learn of it.7 Fearful of the political backlash when news of Hamsterdam’s existence inevitably spreads, Baltimore’s leaders quickly shut it down and force Colvin to resign in disgrace.8 With Hamsterdam destroyed, the drug dealers again terrorize the rest of Baltimore. The status quo reigns once more.9 Stories are powerful teaching tools because they marry information (knowledge) and context (application).10 By observing how the power of law affects characters whom they have come to 4. The Hamsterdam story arc takes place during Season Three of The Wire. See The Wire: Season Three (HBO television broadcast Sept. 19, 2004–Dec. 19, 2004) (including the episodes: Time After Time; All Due Respect; Dead Soldiers; Hamsterdam; Straight and True; Homecoming; Backburners; Moral Midgetry; Slapstick; Reformation; Middle Ground; and Mission Accomplished); see also RAFAEL ALVAREZ, THE WIRE: TRUTH BE TOLD 217–71 (2009) (summarizing each episode of Season Three and giving the contextual information necessary to understand the episode’s part in the The Wire’s complete narrative). 5. See The Wire: All Due Respect (HBO television broadcast Sept. 26, 2004) (containing Colvin’s reaction to the shooting of a fellow police officer during a drug sting); see also ALVAREZ, supra note 4, at 224 (noting Colvin’s perception of the bleakness of his expectations when he considers it a “good night”