How do the Melange Supply and Demand figures reconcile?

Question

It has already been established that the typical dosage of “Spice” for a dependent user was approximately 2 grams per 70 kilograms of body mass per day. Of course for the drug to cause genetic changes as seen in the Guild Navigators, it would have to be on a much higher scale.

By way of contrast, a typical Heroin (I am basing the comparison on heroin because it is highly addictive and the statistics are probably a little more reliable than those for Cocaine) addict requires 200-300 mg per day, a factor of 10 difference compared with Melange. There are an estimated 11 million addicts worldwide (https://www.whitehouse.gov/ondcp/global-heroin-market), and a worldwide production potential of Opium of 7,400 mt per year, but an total consumption of 3,700 mt per year (UNODC World Drug Report 2010). (Income from this is estimated to be split 3:1 between traffickers and growers/harvestors.)

That’s 3.7 million kilos per year, to supply 15+ million Opium and Opium derivative users who require only a tenth part of a dosage needed by a Melange user.

Let’s consider the economics of Spice production. On the “open market”, the value is 62,000 Solaris per gram.

The famous Base Calculation:

10 billion Solaris per year / 62,000 Solaris per gram = 161.3 kilograms per year

In the year previous to the Atreides takeover, the Arrakis yearly “legal” profit was 10 billion Solaris per year. After maintenance, salaries, CHOAM cut, and military expenditures the greedy Harkonnens probably got a 50% profit margin (the Atreides hoped to achieve 12-15% profit margin). Using the 3:1 standard profit conversion, this results in a production of only 1300 kg. per year to supply a universe of addicts.

Adjusted Estimate:

10 billion Solaris / 50% / 15,500 Solaris per gram ≈ 1300 kg.

Even if the production estimate is doubled to take in the illegal aspects (smugglers and Fremen), this still results in a production of only 2600 kg. per year, an amount the DEA would proudly display as results of a single good raid.

An addict such as Piter de Vries consumes 2 grams a day (minimum) times 330 standard days a year is 0.660 kilos per year. With an entire universe of addicts and casual users, (and remember, the Navigators are probably consuming 100 times this amount) how does 2600 kg. a year supply the demand?

Putting this into perspective...

Let's say that the wholesale price is a ridiculous 10 bucks a gram (the wholesale price for cocaine where I live);

10 billion bucks / 10 bucks a gram = 1000 mt of powder,

...which is is still less than total opium production to satisfy one sad little planet of addicts.

Answer 1

The Spice must flow!

The opening of Dune begins with the current operators of Arrakis being sidelined due to their systematic incompetence in managing the production of Spice. The important thing to note is not how much money they're making each year, but rather how little. With millions of planets in the known universe (and potentially a few hundred wealthy addicts on each planet, consuming as much as 1-2 grams per day, plus low-level users ranging in the tens of thousands) this clearly requires a production of multiple tonnes per day in order to feed the supply.

The Harkonnens, after decades of mismanagement and under-supply have reached a point where they're producing less than 1% of what's needed. The slack is evidently being taken up by stockpiles, adulteration and a sophisticated smuggling operation involving two kinds of smugglers, those that operate their own own crawlers and ships and those that have deals with the Fremen.

On top of that, the bribes that are paid to "keep the skies clear" may equate to hundreds of tonnes a year based on the numbers of Fremen we see at Tabr collecting, sorting and harvesting spice (times the number of sietches). We can reasonably assume that the guild is stockpiling some, using some and selling the remainder.

So what happens when the spice flows?

By the time of the God Emperor (and beyond) spice production has returned to a normal level. We learn in Dune Messiah that there are now quite literally billions of addicts across the million worlds

Without melange, the Guild’s Steersmen could not navigate across space. Without melange, billions upon billions of Imperial citizens would die of addictive withdrawal.

and in Heretics of Dune, we get a good idea of the kind of production that can be managed without the Fremen continually harassing the producers

Ninety thousand long tons! Half a year’s harvest from the deserts of Rakis. Even a third of it represented a significant bargaining chip in the new balances.

_{^{Heretics of Dune}}

Answer 2

The 620,000 Solaris/decagram figure you cite is given as an upper bound on the price of melange up to that time. Figuring backwards from the highest market price, assuming constant demand, what you actually get is the lowest-ever spice supply. That this quantity is insufficient to meet your (sensible, I think) estimate of demand within the known universe should be no surprise.

Since withdrawal from melange is fatal and addicts are sometimes quite wealthy (most of those who aren't provided a spice ration or stipend by an employer), it stands to reason that the price is quite sensitive to demand shortfalls, and the average price may in fact be orders of magnitude below the cited maximum figure. I argue that the price fluctuation over time would be much greater than the factors considered in Valorum's answer and bring Herbert's figures into the realm of plausibility.

Also, Guild and Imperial allotments of spice may not be paid for, and would then not be covered in the financial reverse-figuring. The Empire is due its taxes, after all, and adequately supplying the Spacing Guild with Spice is a precondition of even meeting your tax obligation to the Emperor, nevermind selling even a single gram on the open market.