The End of the American Meth Lab? Don’t Get Too Excited.

When people think of meth labs, it usually conjures images of run down houses or trailers in “anywhere” America, chocked full of cooking equipment, cleaners, other chemicals, men in HAZMAT suits, and the “cooks” of the operation sitting in the back of a squad car.

But this narrative of the “American meth lab” may soon be a thing of the past. According to a recent report by the Associated Press, “the nation’s Heartland is ridding itself of the scourge of homemade methamphetamine, with lab seizures down by nearly half in many high-meth states.”

Meth lab busts have declined by 40 percent or more in states with historically high meth production rates. In 2004, nearly 24,000 meth labs were busted by government agencies. In 2013, the DEA reported this number had fallen to 11,573.

Historically, the midwest has seen the most meth production, but every state (save Hawaii) observed at least one meth bust in 2012.


While the number of domestic meth suppliers may be shrinking, this doesn’t mean the market for meth is going away. As the Associated Press and others have pointed out, the production of methamphetamine is shifting from smaller operations in the United States, to “super labs” in Mexico (cue the Breaking Bad episodes). Border states are seeing sharp increases in meth-related activities. Federal forces in California, for example, seized 3.5 metric tons of meth in 2013. In 2012, this number was about 0.5 metric tons. We see the same trend in Texas and Arizona.

Law enforcement and others have discussed this shift in production as a largely positive change. In an interview with Vice News, one Missouri sheriff stated that police could now devote fewer resources to shutting down meth labs and dedicate their time elsewhere. He noted that hospitals no longer have to contend with individuals burned or otherwise injured while making the drug. (In some states, up to one-third of patients in burn units were there because of meth production; the average treatment cost came to about $6,000 per day.)

But before we go applauding this change as a “win” for the war on drugs, there are a few other things to consider. As noted above, meth production is rapidly shifting from smaller operations to larger outfits. Stated differently, as opposed to individuals making meth, it has now become an operation of the Mexican drug cartels. The cartelization of methamphetamine production is likely to have a variety of serious and perverse consequences.

A few weeks back, I wrote about the legalization of marijuana in Colorado. In it, I discussed some of the economics of prohibition. The recent stories about the shift in meth production allow us to visit the issue in another way.

Cartelization is one of the “textbook” consequences of drug prohibition. The logic behind this shift is straightforward. As law enforcement clamps down on meth production, smaller producers (think two guys in a trailer) are pushed out of the market. The chances of getting caught, possible fines, or jail time make production too costly, and they exit the market. Other small producers face the same decision and many of them will also leave the market.

This exit drives up the price of meth, meaning that those producers who remain in the industry reap larger profits. The chances of a big payoff, combined with the government effectively stomping out a big part of the competition, means that cartels are more likely to enter and thrive in the industry. Moreover, since the industry is illegal, violence is more likely to be used as a means to settle disputes. After all, you can’t call the police to say, “Bob on the corner sold me bad meth.”

The violence associated with the cartels isn’t limited to customers roughing up a dealer after a bad sale. According to Human Rights Watch, more than 60,000 people have been killed by the drug cartels between 2006 and 2012. Hundreds have “disappeared.” This violence has also occurred in the United States. Los Zetas, a cartel known for kidnapping and beheading its competitors, has expanded its operations into the U.S. According to the FBI, the cartel recruits prison gang members in Texas, equips them with AK-47s, and is uses them to collect debt, commit murder, and traffic drugs into the States.

Meth is a terrible drug. A quick Google image search of “meth before and after” illustrates just some of the consequences the drug inflicts on its users. The recent reports that meth production is down in the U.S. may have some benefits, but they are by no means a cause for celebration. U.S. drug policies have effectively shifted the manufacturing of meth from small town, individual operations into the hands of brutal cartels. The effects of this shift, while evolving on a daily basis, will be severe. The cartelization of meth and other drugs in Mexico is yet another reason it’s time to seriously reconsider U.S. drug policy.

Abigail R. Hall is a Research Fellow at the Independent Institute and an Assistant Professor of Economics at the University of Tampa.
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