I read an interesting article by Paul Krugman, he talks about the discrepancy of the often preached idea that the higher the education you receive the higher the income. The 80-20 fallacy is mentioned that 20 percent of the people control 80 percent of the wealth, and he argues this is not the case. He says that it has become less than a percent of the people that are controlling the wealth "income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that's not a misprint." Many of our goals as MBA’s is to be the best and work hard to be in the top percent, are the odds on our side? I believe they can be.
The article presents a compelling argument for the legalization of narcotics. Legalizing narcotics would cause the price of drugs to fall substantially, but a steep excise tax on these drugs could easily push the legal price higher than current narcotics prices. These taxes could then be used to fight the hopefully smaller amount of producers who choose to go underground. The tax revenue could also be used to help fund prevention and treatment programs. The legalization would also free up numerous resources for the war on terror and reduce the overcrowding of prisons. A major principal in economics and to this proposal is that a price increase will decrease the consumption of a good, but whether or not the good is inelastic or elastic will have a major effect on how much the price increase decreases consumption. Are narcotics inelastic or elastic??? Would the benefits of legalized narcotics outweigh the costs, and would narcotics consumption fall or rise???
It is a scary concept that a person of legal age could go to the nearest liquor store and purchase a bag of heroin or cocaine, but it seems obvious that the current way of combating narcotics isn't working.