I came across an interesting article pertaining to the war on drugs titled, "A New Kind of Drug War". From President Nixon's declaration of the "War on Drugs" to present day the U.S. government has devoted enormous resources to fighting narcotics. The article states that approximately $33 billion in resources have been thrown into the fight in recent years. So, how has this investment paid off??? It seems obvious that it has done little to stop the flow and supply of narcotics as the "War" was intended to do. Prohibition of alcohol was a disaster and increased illegal activity. The end of prohibition quickly cleaned up the alcohol industry. Could the legalization of narcotics have the same effect???
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.