AK-47 prices

You all remember that scene in Fools and Horses when the Trotters were banged up in a Spanish jail. Rodney says to Grandad: "You mean you were gun-running during a civil war?"  Grandad replies: "That's the best time to do it, Rodney."
Well, Grandad was wrong.  This new paper finds no significant impact of civil wars upon the prices of AK-47s. This could well be because suppliers follow Grandad's advice, so supply rises to meet demand.
What it does find, though, is that  AK-47 prices are around $500 lower in Africa than elsewhere - around $150 compared to $650. This is another way in which the law of one price doesn't hold.
This suggests an obvious policy - western governments should buy Africa's AK-47s. This would transfer wealth to the continent and reduce the means of conflict.
The drawback, however, is the time-inconsistency problem.

Comments

[dearieme]

Does anyone know how renting a pistol for the weekend works? I mean, you go to the pub, the supplier passes you the pistol and some ammo, you pay for the ammo and pay the rent for the pistol. What's to stop you sticking him up and getting your money back? Or if you don't do that, how does the renter ensure that you return the gun after the rental period? If I don't understand such elementary features of modern Britain, why should my view on buying guns in Africa be worth anything?

[mat]

Uh, there are all sorts of reasons why guns in Africa would be cheaper. The paper mentions "income, government [in]effectiveness, war legacy and supply cost variables". Also, African guns are likely to be in poorer condition. That's probably why we don't buy them.

In any case, if our governments are going to send our money to Africa, they can do far better things than finance its warlords by paying inflated prices for their guns. Like we could negotiate a Free Trade Agreement between the EU and AU.

The problem isn't guns; it's people. Switzerland has lots of guns, but its population is rich, educated and peaceful. Free trade and rampant capitalism, more than anything else, will drag Africa in such a direction.

[Thom]

Yeah, rampant capitalism always makes people wealthier, happier and safer from violent crime, just look at Russia.

[mat]

Russia isn't a capitalist country (and never has been), fool.

[Igor Belanov]

So, how do you define 'capitalist country' then? Is it just one that is rich and approved by you? Russia has private property and free markets. Just because it is oligarchic and there is state interference doesn't mean that it isn't capitalist.

[Recusant]

Well, Igor, the Rule of Law applied consistently and impartially would help. Otherwise it is just an updated version of feudalism, with various competing Baron's circulating round the Court that gives them their fiefdoms.

[mat]

Also, Igor, I'm not sure Mikhail Khodorkovsky would agree with you. And of course the economic environment under which he built Yukos can hardly be called capitalist either.

Most capitalists I've spoken to lately (investment bankers and the radical few libertarians at my university) agree that Russia is a scary place, even more so than China.

[Dan Hardie]

It takes 3 seconds to empty the magazine of an AK-47, and usage of ammunition in combat is always way ahead of training use. The product type that will become more expensive in wartime- and the one that provides a barometer of violence- is not weapons but ammunition.

[Dan Hardie]

It takes 3 seconds to empty the magazine of an AK-47, and usage of ammunition in combat is always way ahead of training use. The product type that will become more expensive in wartime- and the one that provides a barometer of violence- is not weapons but ammunition.

[Mark Wadsworth]

I'll return the favour and agree with what Mat said.

But that doesn't answer the question. I think buying up weapons in Africa for $150 a pop is possibly a good idea - as things stand, we are sending billions in aid that gets nicked by the warlords and spent on weapons, if we scrapped aid and bought back weapons instead that'd sort of achieve the same thing (in terms of cash flow) but the opposite (in terms of weapons flow).

It's a bit like the bright idea that somebody had, we could buy up the entire Afghanistan opium crop for a meagre $1.5bn a year, take what we need for ourselves and chuck the rest in the sea, or burn it, or whatever method of disposal is most appropriate.

[mat]

But don't you think that would create tragic incentives? If we paid Afghanis $1.5bn for their entire opium crop, next year we'd find they've grown $3bn, and the next year $6bn.

It reminds me of the "fair trade" movement where buying organizations pay inflated prices one year in a particular region/country. But then, to spread the fairness, they move on to another region the next year. Meanwhile, back in region A, farmers have produced too much crop and prices plummet. (At least according to this guy: http://www.columbia.edu/~xs23/Indexmuppet.htm)

[Mark Wadsworth]

Mat, yes there would be an element/risk of that, but we (as the main customer) could freeze drug barons out of the picture (becoming the sole customer) so we would be able to dictate the price - a bit like supermarkets and milk producers.

$1.5bn is a known and manageable figure, it is a fraction of the total cost that e.g. heroin does to society in terms of health, crime and so on.

It is far from a "perfect" solution to a large and complicated problem, but it's the least-worst that I've heard so far.

[Andrew Dodds]

Mat -

The trick with the guns is to offer slightly below-market prices. You want to encourage the soldiers to sell their guns, so that the warlords end up going bankrupt re-equipping their men. Soldiers selling their own weapons is not unknown in well disiplined and trained western armies; I suspect it's already common in African ones.

Mark -

If you combine the above with a prescription-heroin program as well, you can make sure that the dealers and trafficers are squeezed at both ends - costs more to get supply just as (illegal) demand is reduced.

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