At any given time some $5bn made from drugs is sloshing around the international monetary system. Inevitably, some of it filters into the world of legitimate finance. As a result, many businessmen who would be horrified to be accused of profiting from drugs nevertheless do so - becoming another casualty of the war.
Take the City of London. Worried about all those billions trying to find a legitimate home, the Government has authorised the Bank of England, the British Bankers' Association, Customs and Excise, the Serious Fraud Office, Scotland Yard, the City of London Police, the Security Service and the Secret Intelligence Service - all liaising through the National Criminal Intelligence Service - to crack down on drugs money laundering.
If you were wondering why you missed all those high-profile cases at the Old Bailey, where the drugs barons and the organisations which tried to wash their money in Britain were sent to jail for 10 years, then wonder no longer - because there haven't been any. The problem is that no one is willing to give a firm answer to the question: at what point does dirty money become clean?
A City financial institution may suspect that a couple of million dollars it has just been asked to handle may not be clean - and the law obliges it to report such suspicions. But if it does so, it risks losing a valuable client. John Gibb, who specialises in writing about this area, says: "Which City institution would refuse to do business with a wealthy charitable foundation based in the Far East which is, on the surface, working to support persecuted nationals around the world? How far should that City institution investigate to discover whether the charitable foundation is a front for laundering the proceeds of drugs?"
Gibb offers one example of how an American drugs baron could launder his money. He begins by flying to Moscow with suitcases containing a couple of million dollars. The Russian customs don't give a damn about dollars coming into the country. Theirs is a cash-based economy, and American dollars are the unofficial currency. There is an enormous demand for them.
The drugs baron changes his dollars at a very favourable rate, then uses Russian underworld friends to buy a copper smelting plant in the Ukraine. If he needs more capital, he raises it from a hedge fund in the Bahamas, itself probably financed with drugs money. Copper ingots from the plant are then shipped to London as the property of an off-the-shelf British company the drugs baron has bought and which has an account with a high street bank.
The ingots are stored in a warranted or bonded warehouse which issues him with a certificate of ownership. He then trades the metal on the London exchange. The profits are lily-white, ready to be invested in a perfectly legitimate business.
There are two views on how much the City of London is knowingly involved in deals like this. Christopher Dickson, deputy director of the Serious Fraud Office, says that it is because of its reputation for honesty and integrity that criminals choose the City of London to sanitise their money. "If the City's reputation is damaged, the political and economic consequences will be appalling."
But elsewhere in Europe, experts say that City institutions actually relish the flood of dirty money pouring in from places such as Russia. They say, further, that it may be safer in the long-term that drugs money is laundered and goes into legitimate financing, rather than moving unaccountably through the black economy.
WHAT is it that makes drugs so attractive to so many people? As one whose drug is alcohol, I can only report on what some users of other recreational drugs have to say about their appeal. Here are some of them talking about Ecstasy:
"I got a huge rush and the feeling of well-being went on for six hours, it doesn't stop when you leave the club. It's the whole thing of piling off to the 24-hour garage, buying milk and biscuits and going back to someone's flat to drink tea, smoke spliffs, listen to techno and waffle all night. It's one of the best memories of my friends at university. It's better than sex because you are in love with the whole world... I felt more intelligent, more attractive, freer with my emotions. I was eloquent, able to speak on any subject, recall information from my subconscience. It was brilliant."
Or, as the columnist Charlotte Raven put it: "The kids who take Ecstasy are nicer, in general, than the ones who swill beer and pick fights. One of the things I liked most about the drug was the way it encouraged the user to enjoy the company of others without shagging them, stabbing them or singing loud songs in the street."
But what about the dangers, the deaths, the ruined lives? It turns out that Ecstasy, after cannabis, is one of the safest of all drugs to take. Despite the hysterical outcry from the tabloids that followed the death of 18-year-old Leah Betts in 1995, Ecstasy is linked to only 0.0002 per cent of deaths in a year. Compared with tobacco, which kills 0.9 per cent, and alcohol, which kills 0.5 per cent, this is minuscule. As the Economist - hardly a raving, pro-drugs publication - has pointed out: "Flying on a civil airliner is one-and-a-half times as dangerous as dropping an 'e'."
Heroin, however, does deserve its bad reputation. It is addictive and delivers such a powerful sensation that even those who have suffered from addiction to it and managed to beat it say that they will miss it for the rest of their lives. (One girl told me: "It's like an hour-long orgasm.") It is the most dangerous drug, and kills about 1.5 per cent of its users each year. Yet despite the documented risk, use of heroin has tripled since 1985.
One reason has been social deprivation. Andrew O'Hagan, writing about Glasgow, says that heroin appeals to young folk who have no firm sense of the future, or of any day beyond the one they are inside. "To folk in this position, the effects were meaningful and comforting. Heroin was, in a way, more glamorous and less negotiable than anything that had come to their streets before."
Glamorous? Heroin glamorous? Absolutely. Something has happened to make heroin suddenly fashionable, smart, chic and, above all, socially acceptable, both in Britain and the United States. The origins of this important change can be traced back to events in Cali, a busy industrial city in south-western Colombia, in 1990.
COLOMBIA used to mean cocaine, the Medellin cartel and its boss, the late Pablo Escobar. But in Cali, a group of rival drugs barons, noting that the cocaine market was becoming too competitive, decided to switch to heroin. They concentrated on producing the best heroin in the world, so pure that when it first arrived in Britain three years ago, few could handle it and some 24 addicts died from overdosing in one week.
It was the quality of the Colombian heroin that changed public perception of the drug. Because it is so pure, you do not have to inject it - you can smoke or snort it. Almost overnight, out went the image of "'dirty druggies" with their needles, track marks and Aids. Instead, wasted, pale- faced models are now described in serious newspapers as embodying "heroin chic".
So when the British Government put out an anti-drugs poster featuring a painfully-thin, surly-faced young man above the headline "Heroin Screws You Up", it became a pin-up for thousands of teenage girls and had to be withdrawn.
ONE REASON why the war against drugs has gone on so long is that many people have no interest in victory or defeat, only in the fight continuing. Ethan A. Nadelmann, director of the Lindesmith Center, a drugs policy research institute in New York, says that the American drug enforcement/treatment complex has become so hooked on government money that the anti-drugs crusade has become a vested interest.
That has not yet happened in Britain, but it could. The Americans spend $17bn of public money on the anti-drugs war while, at the moment, Britain spends only pounds 500m a year. But this is rising rapidly and it does not include our indirect contribution to the army of international civil servants involved in the war, those who run the United Nations Drug Control Programme (UNDCP) or those who work for the International Narcotics Control Board.
And then there are others with an interest in the war continuing - the prison builders, the drug-testing companies, the professional anti-drugs education programmes, the extra police and parole officers called up for the battle. Not to mention those who have been corrupted, like the five American police officers convicted last year of beating and robbing drug dealers they had encountered in the streets of New York. At their trial, angry and defiant, the officers said: "Everyone is doing well out of drugs except us. These guys were the enemy. Why should they get to keep all the money?"
SINCE THE WAR on drugs has been lost, it is logical that we should be planning what to do next. There is no chance in the immediate future of such a discussion taking place in the United States. The Surgeon General, Jocelyn Elders, suggested it - and was quickly hounded out of office. But even if, in the end, the US pulls nations such as ours into line over our treaty obligations, there is no reason why we should not at least discuss more effective strategies against drugs.
The Economist says such a discussion should start with the fundamental question: why are some drugs illegal in the first place? The standard answer is that illegal drugs are illegal because they are dangerous. We have seen that this is not always the case. Most young people know it is not so, which is why they do not trust official information on the subject. They know the danger varies widely from drug to drug, and many drugs are not dangerous at all - the Economist says that some drugs are not as dangerous as, for example, riding a motorbike.
Well then, because they are addictive - if they do not kill you now, then long-term addiction may damage your health. This may be so, especially with heroin, but no more than for alcohol and tobacco. The Economist - not some wishy-washy, liberal publication - says: "if addictiveness is truly the criterion for a ban, then booze and cigarettes should be banned, not cannabis and ecstasy".
How about the argument that drug-taking is not a matter for individual decision because it has social consequences? True enough, but not enough to justify the current list of illegal drugs. The Economist again: "The National Health Service has to cope with many accidents and diseases that are largely self-inflicted (not least from tobacco and alcohol). Those caused by illegal drugs are a small fraction of them."
So, how about the suggestion that our kids would have stuck to legal drugs such as tobacco and alcohol, if only drug pushers had not corrupted them? The few studies on this issue show that most first-time users are introduced to a drug not by a pusher, but by a relative or a friend. The music and club magazine Mixmag asked 4,000 young people how they first came to try Ecstasy. Only 2.9 per cent were persuaded by a dealer, while 85 per cent had been "pushed" by a friend.
These friends would be horrified to be described as pushers. Lifeline, the Manchester drugs information agency, interviewed one group of students who were facing prosecution for dealing in drugs. Lifeline's manager, Alan Haughton, says: "They were really indignant about being prosecuted. They didn't consider themselves pushers and criminals. They thought that they were helping out their friends so that they didn't have to get involved with the criminal fraternity."
NONE of the commonly-used arguments in support of the war on drugs stands up, and the list of serious, respectable people across the political spectrum and from both sides of the Atlantic who now accept that the war has been lost grows daily. If these realists were to persuade their governments to at least try a new approach, what might this be?
Let us take the views of two ultra-conservative publications, the National Review in America, and the Economist in Britain. Both insist that they do not favour drugs. The National Review: "We deplore their use; we urge the stiffest feasible sentences against anyone convicted of selling a drug to a minor." The Economist: "It is possible that the world would be a better place if nobody took anything that could harm them."
But both agree that the war on drugs has failed, and that there should be a movement towards legalisation. Ethan A. Nadelmann writes in the National Review: "The time has come to abandon the concept of a 'drug- free' society. We need to focus on learning to live with drugs in such a way that they do the least possible harm."
The Economist suggests that there should be licensed sales outlets (a sort of drugs off-licence) initially for cannabis and Ecstasy, with minimum ages for purchase, just as there is now for alcohol and tobacco. The drugs would be supplied by licensed manufacturers to ensure the purity, and thus the safety, of the product. Driving under the influence of the drugs would carry the same stigma and sentence as driving under the influence of alcohol. If the experiment worked, it could be extended to other drugs.
The Economist believes the benefits would be enormous. Police and customs would no longer waste time and money chasing users and traffickers. It would cut Britain's prison population by 10 per cent at a stroke. It would reduce crime and violence, forcing drugs barons out of business and end their often deadly battles over territory. It would save Britain pounds 500m a year spent on enforcing anti-drugs laws. And if licensed drugs were taxed at the same rate as alcohol and tobacco - even though the price would drop dramatically - they would provide revenue of at least pounds 1bn a year.
The war against drugs is part of the last great authoritarian campaign of this century - the attempt to tell us what one can and cannot do to one's own body. The debate is raging over abortion and euthanasia, but not drugs. It cannot be too early to discuss what we should do when the crusaders against drugs finally admit defeat.