Most interactions take place between a criminal industry, its customers and law enforcement. Illegal markets would be non-competitive unless criminals were given a monopoly by the law. The real effect of prohibition is to give a competitive advantage to criminals by outlawing a heretofore legal market. Participants in criminal markets have decided that because of their competitive advantage as criminals, they have no stake in legitimacy. Producers and vendors conclude that the enormous untaxed profits which attend successful sale of an illegal product offset their potential risk of apprehension and punishment.
Consumers tacitly indicate a willingness to assume similar risks when they purchase the product.
The only rules are ad hoc arrangements which are adhered to on an empiric basis. When either profit or survival necessitate a change in the rules, parties are free to change them, relying on their own ability to enforce those changes. The panels, boards, commissions and courts which restrain competition, make rules and enforce safety standards in legitimate industry are replaced by violence, deceit and corruption. Lucrative black markets favor survival of the most cunning and brutal entrepreneurs on the planet and make no provisions for dissatisfied consumers. Under prohibition, the government's role is limited to suppression by law enforcement agencies, with no opportunity to use its authority to obtain the considerable benefits which flow from regulation in other commercial pursuits.