The Law of Diminishing Sacks - June 14, 2006

I was debating drug policy with a friend over the weekend, Les Faulheit. Les is an economist of sorts, facile with numbers and figures I am unable to discern (thus leading to my present nadir, bullshitting for a living). We got into a heated disagreement over the government's drug policy. We agreed the War on Drugs was a failed Frankenstein of senseless Puritan meddling (as any rational American recognizes), but we nearly came to fisticuffs over how drugs could conceivably be "stopped" utilizing available market instrumentalities.

After three or four, or six or seven, Sierra Nevadas and a glass of Knob Creek, I bleated my uncreative theory. "The government's doing the only thing it really can. Sure. It's dumb and backward, but fuck it. You stop the supply. That's all you can do."

"Bullshit. You don't know jack about dope, and that's always been your downfall," Les snapped.

"What the fuck are you talking abowww..."

Les cut me off. "If you'd have smoked more dope, you'd never have done what you did with yourself. You'd have known better."

"How the hell else do you stop supply?"

"The only way to stop drug supply is with more supply... at least with dope."

"More dope leads to less dope?"

"Exactly," he snapped.

"You have shit for brains," I coughed.

"You stupid ambulance chaser. I'm not talking about just giving more drugs to people using drugs. I'm talking about exhausting the supply chain."

"If the government could do that, they would have."

"You're naïve for a shyster. The government likes drugs. Everyone likes drugs. But that's besides the point. Even if they actually wanted to stop drugs, they don't understand the dynamics of dope supply and use. The government doesn't understand the Law of Diminishing Sacks. Only bakers who've been bitten by it understand how it works."

I gulped my beer and stared at him, quizzically. He explained.

"Dope is harvested three, four, five times a year. There's only so much of the stuff. If the government let that all in, if it flooded the market, bakers would exhaust each harvest in an amazingly short time. The market would dry up in weeks until the next harvest. By holding back distribution, the government ensures more prolonged use."

"Huh?" I lazily replied, staring at my beer, unsure if I wasn't missing something obvious.

"Dope doesn't follow the laws of supply and demand. In fact, the Law of Diminishing Sacks works in reverse."

I started playing a game of "Fight Night, Round Three" and pretended I didn't hear what Les was saying. I was embarrassed, another dumb lawyer running his mouth off about what he didn't know.

The next morning I got the below email. Les claims he gave a lecture on this at Boise State in March of 2002. I can't verify the credibility of that claim, but in any event, here it is.

The Law of Diminishing Sacks
Faulheit, Les (2004), Humboldt County Community College Press

Among seasoned marijuana enthusiasts, there is an accepted and irrefutable phenomenon which defies the conventionally known laws of supply and demand. All marijuana satchels, regardless of size, exhaust at the same time. No matter how large the sack of ganja purchased, it will be smoked to a pile of resin at the same time as any smaller sack. This phenomenon, known as the Law of Diminishing Sacks, has baffled and cruelly victimized bakers from time immemorial.¹

In the example graphed above, Baker A buys 1 ounce of high grade kind bud and Baker B buys ½ ounce of the same pot. Baker A and Baker B have similar tastes and preferences (providing for identical utility curves):

They both live with or near a similar number of other bakers;
They both have access to various forms of consumption paraphernalia; and
They both have equal amounts of time to consume at their discretion.

Although laws of supply and demand would appear to dictate Baker A would enjoy his sack for twice as long as Baker B, the Law of Diminishing Sacks reveals that Baker A and Baker B will both fully consume their bags of marijuana at the same time.

The graph displays the change of sack size over time (the delta) is the rate of consumption. The early phase of sack utilization has the highest rate of consumption (i.e. the steepest part of the curve) and Baker A, with the larger sack, has an even higher rate of consumption than Baker B. As the sack size diminishes the rate of consumption slows. Thus, within a matter of days, despite the great divergence in initial supply, both bakers find themselves with the same remaining sack.

In his groundbreaking analysis, Baking Habits of Large Sack Holders (1992), Pierson Philip von Funnk, Phd., explained the forces behind this aberrant result, observing that during the initial period of liberal consumption, Baker A and Baker B exhibit common characteristics:

Elevated sense of euphoria at seemingly inexhaustible supply;
Willingness to "pack it up" more frequently and for more people;
Diminishing marginal return of "bake" (increased tolerance);
Use of bigger bowls, including highly inefficient "party bowls"; and
Less efficient distribution methods (joints/ bongs rather than bowls/ bats).

F. Hans Burnham's seminal treatise, A Regression Analysis of Sack Size and Consumption Patterns (1998), took the next step, describing the correlation between sack size and frequency and volume of baking, finding a "multiplier effect" resulting from having a large versus a small sack. This explains Baker A's steeper curve and higher rate of consumption.

So what does this mean? How should the average baker interpret this data, if at all? Can the average baker avoid the Law's application?

In the author's opinion, the Law cannot be avoided through any conceivable corrective measure. It is simply an unchangeable fact that an uptick in supply will be met by an uptick in consumption, thus negating any perceived supply-lengthening benefit from increased supply purchase.²

As both Baker A's and Baker B's sacks dwindle, both gear downward into a period of conservative consumption. At this point both Baker A and Baker B have a similar sack size, the higher rate of consumption having caught up to Baker A's fatter sack. Soon thereafter, the curve flattens, as both Baker A and Baker B smoke less frequently and less intensely. In fact, Von Funnk discovers startling adjustments in implementation procedures as both bakers turn to bowls, and then bats, to conserve. In his controversial 1997 work, Resin Is Your Friend, Von Funnk also claims to have discovered social changes amongst bakers impacting their sack depletion rate:

"The baker with a mere corner sack remaining and no hope of replacement supply in the short term will actively seek out other bakers under the guise of needing to borrow video games, return previously loaned items or 'have a few beers' in the hope of having this other baker bake him."

Von Funnk has even gone one step further, suggesting the existence of certain "predatory bakers" who, finding their own supply dwindling, will seek to initiate "group bakes" (gatherings of several bakers holding severely depleted sacks) at the homes of bakers with large sacks to exhaust those bakers' substantial supplies. Von Funnk claims this practice "targets the baker with the closest connection to the most immediate wholesale supplier," forcing him to initiate another "group buy" on behalf of himself and the other bakers in his immediate baking network.³ The author believes this theory credible, as the baker holding the largest sack is almost always best connected to the wholesaler in any given baking community.

Burnham's follow-up, I'll Even Smoke Schwag (2002), refutes Von Funnk's findings, arguing bakers do not engage in coordinated efforts to maximize personal supply, and roundly dismissing the notion of "predatory bakers." Burnham claims that as bakers' supplies dwindle, a random form of "game theory" develops, with bakers furiously seeking out any other bakers who are holding. Panic ensues. All supplies are diminished. Hoarding begins as expected reciprocity (the commonly observed "I'll pack the first, you pack the second" practice) is forgotten. This state persists until all sacks are exhausted, each within days or hours of each other, and a group purchase is once again initiated.

Extensive fieldwork with numerous teams of researchers has proven the Law to be universally valid in all baking communities. In the most recent studies, no measure of correlation was obtained between the type of marijuana and the rate of consumption. The author believes type of marijuana is not a statistically significant variable, the Law of Diminishing Sacks applying uniformly to both seedy/stemmy dirt weed and $500/oz White Widow.⁴

The author's sole recommendation at this juncture is reasoned, conservative purchase on the lower side of what others in the purchaser's baking community have bought. This ensures against adverse economic consequences resulting from consistent overspending and the socially untoward behaviors of the so-called "predatory bakers."

---------------

¹ 1967 to present.

² Observed in cocaine circles as the "until it's gone" effect. Blades, J., Sucking Water Up the Nose Afterward Does Not Extend the High (1996).

³ This study necessarily excludes data regarding repeat small batch retail purchasers or those utilizing delivery services. Data on the habits of those purchasers has been detailed extensively in Dime Baggers Bazaar, A Brief History of Washington Square, McBruck (1998) and Ordering In; Should You Have Your Own Scale?, Carter (2000).

⁴ Prof. Faulheit suggests further double-blind statistical trials. If you are interested in participating, please email lfaulheit@gmail.com. The author will participate in the first phase of the trials, preferably utilizing grade AAA hydroponic indica.

Posted by PhilaLawyer at 8:50 PM

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Comments

that was a horrible story, what happened the others were so good

Posted by: ali baba at June 14, 2006 03:06 PM

holy shit! as an econ major i loved it.

Posted by: anonymous at June 14, 2006 04:14 PM

rasta!! regardless of the law of diminishing sacks, I'd rather have a big sack than a little one!

Posted by: chef ra at June 14, 2006 04:21 PM

Flawed argument that assumes there wouldnt be a sharp increase in supply after people keep buying. In the short term, economically speaking he is correct, until pot growers realize if they stagger their exports they will make crazy amounts more than just dumping it after its harvested. Pot smokers may be idiots but the sellers arent.

Posted by: Dukeofboston at June 14, 2006 04:24 PM

That's a great theory and all, but we all know how supply and demand works.

You can't "exhaust(ing) the supply chain". It's just not possible. If the supply was indeed exhausted then demand would increase. Prices would rise and in response growers would increase the output of their harvest.

Don't get me wrong. That's one of the funniest half well maybe fully baked, theories I've ever read…but you can’t mix up the tendencies of potheads not wanting to run out of pot with the laws of supply and demand.

BTW, I’m loving the new site, keep it up.

Posted by: Marak at June 14, 2006 04:45 PM

I would have to agree on the sack theory but not on it diminishing all the drug supply. Fair enough the rate of consumption amound people's supplies may be the same even with different amount's of drugs but this wouldn't lead to no more on the market. Drug producers will just up production to compensate for this boom but then this leads to another path. What if they let in all the drugs they want for a year or so meaning the producers would need to scaler up production to cope with demand and then placed bans on it again. The producers would be making surpluss amounts since now they can't supply as much, but then again they're all getting stinking rich anyway. Just my 2 cents.

Posted by: kris at June 14, 2006 08:12 PM

Geez, it was a joke. How dumb are you people? Pierson Philip von Funnk, PhdF.? Hans BURNham? Even the author, Les Faulheit -- I think "faulheit" means lazy in German.

Posted by: AJ at June 14, 2006 08:36 PM

Who reads these stories? Buncha dumb, long-winded blowhards, that's who.

And by that, yes, I do mean lawyers.

Posted by: duh at June 14, 2006 10:05 PM

The Law of Diminishing Sacks describes the forces underlying the consumption patterns of an individual baker, not the US marijuana market. As a concerned user, I often wondered “where did my huge sack go?�? As an econ major, I wanted to understand the shape of my demand curve for marijuana and how satchel size correlates to rate of consumption. With the help of many friends, I easily accumulated enough empirical evidence to form my theory. I invite others to test the theory as much as possible.

In regards to US drug policy and the supply and demand of the marijuana market, um....

Posted by: Les Faulheit at June 14, 2006 10:25 PM

By this reasoning we would be running at of any and all farmed quantities. Yet here we are still consuming dailly the same items farmed all over the world. How would this be a war on drugs?

Posted by: Jon at June 14, 2006 11:11 PM

That was just asinine, not clever or insightful, just asinine.

Posted by: James Bain at June 15, 2006 01:39 AM

I warned Philalawyer that this would happen:
The lawyers would overanalyze it and look for higher meaning and the meatheads wouldn't get it.

Posted by: Les Faulheit at June 15, 2006 10:10 AM

can i get those 5 minutes
of my life back

Posted by: mark at June 15, 2006 10:13 AM

Very entertaining! Worth waiting for :)

Posted by: Kelly at June 15, 2006 11:51 AM

Yeah pot is only harvested a few times a year but there are methods like cloning and sea of green that could keep the supply up year around if it is a big enough operation. I know this lecture is probably a joke but in all reality if you flooded the market it would just drive prices down a little bit causing people to hoard more of it, it wouldn't solve the drug problem. The best course of action in the war on drugs as far as pot is concerned would be for the governement to decriminialize it and tax the shit out of it like cigarettes and booze, then funnel some of the money into treatment programs and use the rest of the money combined with the money saved from no longer going after pot users/growers to help pay down the national deficit.

Posted by: BuddyGoodness at June 15, 2006 02:55 PM

I don't think gmail existed in 2004.

Posted by: Daniel at June 15, 2006 07:24 PM

buddygoodness, we should talk, email me at lfaulheit@gmail.com

Posted by: Les Faulheit at June 15, 2006 08:25 PM

buddygoodness, we should talk, email me at lfaulheit@gmail.com

Posted by: Les Faulheit at June 15, 2006 09:26 PM

"Who reads these stories? Buncha dumb, long-winded blowhards, that's who.

And by that, yes, I do mean lawyers."

You retard, you're just angry because it contained words with more than 2 syllables so your brain overheated. Notice i got the insult out of the way first, because theres no way you've read this far into it without having a tard fit. The entire website is good.

Posted by: Cri at June 15, 2006 10:28 PM

That story was funny, but reading the comments afterwards made me hate it. 75% of you people commenting need to crawl back under your rocks and hide away in your land of disillusion. Whoever's talking about sea-of-green and cloning, you dont have a clue what just came out of your magic fingers and on to my screen, so stop pretending. The guy claiming we'd run out of other farmed products, but that doesnt happen.. have you ever been to the grocery store? Did you notice that tomatos were WAY more expensive during their off season? Get a clue.

As a baker in highschool, this story is both hilarious and suprisingly true. Keep on rolling man.

Posted by: chipstar at June 16, 2006 09:38 AM

This story was our exact last 2 weeks. It's like you were following us around and voice recorded our conversations. Too bad we just ran out of our White Widow from Amsterdam. We've gotta call someone up for a party bowl.

Posted by: GV at June 20, 2006 01:34 PM

Hahaha. You were right to be embarrassed for him man. I think the guy who sent this email was smoking a little crack cocaina before he wrote it. It was even more funny to me because this email reminds me of the textbooks I’m forced to read in college. They are filled with a lot of very beautiful, subtle bullshit. I got half way through and had to stop myself from laughing (and reading) more; which is the same thing I have to do with school texts. Except unlike school texts I didn’t have to memorize any useless crap that I knew would be on some multiple choice exam. Peace bro.

Posted by: Burgerboots at July 4, 2006 09:39 PM

Hahaha... nice story!

A lot of people don't appreciate this one I'm sure, but those with experience in the field can emphatically confirm this theory.

Posted by: Chris at July 12, 2006 02:06 PM

Anyone who's hung out with people that smoke a lot know that heavy smokers don't buy large amounts to conserve it. They buy big to get higher than they would with a lesser sack. So I agree with the theory, but that said, it doesn't relate to the supply-and-demand argument.

If weed is legalized, the supply won't simply run out. Look at the Netherlands. Think they ever run out of weed? This stuff is not corn or wheat, as it can be grown indoors.

Posted by: Ben at July 26, 2006 11:10 AM

I would much rather get that fat sack than a little one!!! Get fucked up!!

Posted by: Jason Tyler Smith at February 12, 2007 01:51 AM

I agree with the Law of Diminishing Sacks completely, however, I do not believe it would improve the war on drugs.

Mr. Faulheit states, "there's only so much of the stuff," advocating his theory that, if legalized, supply would quickly evaporate. That is simply not true. If legalized, MORE pot would be produced - more would be grown. The world is clearly not producing pot at maximum capacity. If legalized, supply would obviously go up as any bumpkin could predict, but so would the actual production.

Mr. Faulheit's theory fails to address this factor.

Posted by: S at September 5, 2007 05:00 PM

This theory completely explains my entire college career.

PL: I was more a mushroom freak myself.

Posted by: Bigtom at April 30, 2008 10:33 AM