June 2, 2005
Legalizing drugs
Some common sense, for once, on the true cost of the drug war:
In a report released today, Dr. Jeffrey Miron, visiting professor of economics at Harvard University, estimates that replacing marijuana prohibition with a system of taxation and regulation similar to that used for alcoholic beverages would produce combined savings and tax revenues of between $10 billion and $14 billion per year. In response, a group of more than 500 distinguished economists—led by Nobel Prize-winner Dr. Milton Friedman—released an open letter to President Bush and other public officials calling for “an open and honest debate about marijuana prohibition,” adding, “We believe such a debate will favor a regime in which marijuana is legal but taxed and regulated like other goods.”
Using data from a variety of federal and state government sources, Miron’s paper, “The Budgetary Implications of Marijuana Prohibition,” concludes:
- Replacing marijuana prohibition with a system of legal regulation would save approximately $7.7 billion in government expenditures on prohibition enforcement—$2.4 billion at the federal level and $5.3 billion at the state and local levels.
- Revenue from taxation of marijuana sales would range from $2.4 billion per year if marijuana were taxed like ordinary consumer goods to $6.2 billion if it were taxed like alcohol or tobacco.
It’s not just marijuana. The war on drugs has been one of the most costly social-policy failures in U.S. history. On one estimate, the U.S. spends more than $40 billion of taxpayer’s money every year fighting illegal drugs. About one in four of America’s prison population is locked up thanks to a drug-related offense, usually non-violent. A report released on May 18th by the White House Office of National Drug Control Policy acknowledge that 1.6% of state prisoners are incarcerated for marijuana-related offenses alone.
Moreover, there is little connection between the severity of a drugs policy and prevalence of use. Illegal drugs continue to get easier and cheaper to obtain—for example, a gram of cocaine cost about $38 wholesale in the U.S. in 2003, down from $48 in 2000 and $100 in 1986. The illegal-drugs business continues unabated, with global sales on the same scale as the global tobacco industry. The industry fuels corrupt regimes, terrorists, civil wars, gangs… the list is endless. Worse, the fallout from this criminal activity disproportionately impacts poor countries or poor people in developed countries.
Legalizing drugs would cut profits, crime and exploitation. It would empty America’s jails of people who by most measures should never have been incarcerated in the first place. True, it would result in an increase—at least initially—in drug use. But as The Economist pointed out some years ago in an excellent and still-relevant (paid-subscription) editorial:
Precisely because the drugs market is illegal, it cannot be regulated. Laws cannot discriminate between availability to children and adults. Governments cannot insist on minimum quality standards for cocaine; or warn asthma sufferers to avoid ecstasy; or demand that distributors take responsibility for the way their products are sold. With alcohol and tobacco, such restrictions are possible; with drugs, not. This increases the dangers to users, and especially to young or incompetent users. Illegality also puts a premium on selling strength: if each purchase is risky, then it makes sense to buy drugs in concentrated form. In the same way, Prohibition in the United States in the 1920s led to a fall in beer consumption but a rise in the drinking of hard liquor.
…To legalise will not be easy. Drug-taking entails risks, and societies are increasingly risk-averse. But the role of government should be to prevent the most chaotic drug-users from harming others—by robbing or by driving while drugged, for instance—and to regulate drug markets to ensure minimum quality and safe distribution. The first task is hard if law enforcers are preoccupied with stopping all drug use; the second, impossible as long as drugs are illegal. A legal market is the best guarantee that drug-taking will be no more dangerous than drinking alcohol or smoking tobacco. And, just as countries rightly tolerate those two vices, so they should tolerate those who sell and take drugs.
Almost all the social and economic consequences of illegal drugs use stem from their illegality. This is Prohibition revisited—and about as successful.
You can find the full list of 500 economists here.
Posted by Stephen at 6:54 PM in Drugs | Permalink | Comments (4) | TrackBack (0)
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Comments
i love drugs <3
Posted by: Billy McClain at February 27, 2006 2:01 PM
One time, I was interning at a DA's office- appeals unit. I worked on an appeal- opposed it- for a woman who had been caught selling crack and entered into a plea bargain to do 2 1/2 to 5 years. While awaiting sentencing on that plea, she was caught again selling crack. She wound up taking 5-9 years for both. and was appealling. her appeal pointed to a number of one line appeals rullings knocking down crack convictions to 8 years..
Damn thats a long time in jail for crack....
OTOH- its not like she was detered when she was waiting to go in on the first sentence...
Posted by: Aaron at June 17, 2005 1:52 PM
It doesn’t surprise me. This is a topic most people seek to avoid, and publicly taking a pro-legalization stance means opening yourself up to all kinds of onslaught. The idea of legalizing drugs is abhorrent and counter-intuitive to most people—how can you possibly solve the problem by making drugs easier to obtain? And there’s no doubt that the transition would be unbelievably hard—but it would also, eventually, solve the problem. Take the profit and crime out of drugs, and you destroy the industry. It would take many years and unflinching resolve, and there’d be a lot of headline-grabbing setbacks. But what’s the alternative? Stick with what we have? When a policy has failed as spectacularly as this one, it’s time to start over.
Posted by: Stephen Ayer at June 5, 2005 4:39 PM
I looked through the list of 500. It puzzles me that there are so few big-name economists at big-name schools on the list. Why do you suppose the campaign has been less successful elsewhere?
Posted by: The Eclectic Econoclast at June 5, 2005 8:17 AM
