2/06/2006

The War on Drugs

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.

8 comments:

Blake said...

I tend to agree with your comments. While narcotics are extremely dangerous, and cause death, so are cigarettes! Yet cigarettes are completely legal! I'm almost certain that big wig politicians have failed to make cigs illegal because of the hefty benefits they receive from their big tobacco company lobbyists. While I don't condone drug use, I think that society has bigger fish to fry, especially when it comes to keeping sexual predators in prison for life, and ensuring that everyone in America is entitled to medical benefits. Why should someone who was found distributing cocaine be in jail for life on my nickel, when some sexual offender can continually raid the streets, terrorizing more victims? Also, I'd rather my hard earned tax dollars go to give medical care to atleast one of over 45 million Americans who have no form of health insurance, comprising of atleast 15% of our country's population! While these are just two of an array of problems in society that could perhaps be improved if less money was tied up in fighting narcotics, it is a definite improvement from government's current method of handling things.

Dr. Tufte said...

-1 on Blake's comment for a spelling error.

I think Bryce answered his own quetions about elasticity: if legalization will cause a "steep" price drop that can be reversed with a tax, then it sounds like demand is inelastic.

I'm dubious about the proposal to use drug legalization as a way to increase tax revenue. First, part of the problem with drugs is the revenue involved. Shifting this from the underground sector to the government is just going to create a lot of smuggling and avoidance - which those involved are already experienced with. Second, there is is the ethical issue of whether government should be funded from sin taxes - how long will it take the government to decide that it needs to start promoting those activities to raise revenue?

Boris said...

Some good points were made about how legalizing these drugs might free up some government resources that could be used elsewhere, but who’s to say the even greater costs won't be incurred by doing so? These drugs are much more deadly than cigarettes and alcohol, and they carry with them much greater tribulations.

Would the number of drug related deaths increase? Would hospitals be admitting more and more patients for drug treatment? Would children have better access to harmful drugs? I would not be surprised to see an increase in all of these areas; also, I would not be surprised to find out that those suffering from the effects of drug usage would not be able to pay for these expenses. I think society would have to foot a much larger bill than we do currently.

Dr. Tufte said...

Your point is well taken.

However, our current system prevents us from actually addressing questions like this reasonably.

A better example would be gambling. For better or worse, we went through a long period where we allowed one state to experiment with gambling. After several decades of exposure, it became clear to other states that the benefits outweighed the costs. (Reasonable people can quibble about whether that judgement was correct, but there certainly isn't much disagreement in the state governments about it).

So, here is a suggestion. Why not allow a state to legalize drugs if it wants to. Then watch what happens. If you're open-minded, it should bother you that this suggestion is never even on the table. Why is that so?

Boris said...

I wouldn't be opposed to a state trying out some new drug laws. It would be an interesting experiment to observe. (Observe being the key word.) Maybe they should try it in Oregon or something…

Ella said...

The comparison between prohibition and the war on drugs seems to be a bit of a stretch. No doubt individuals disobeyed prohibition laws in the same way that drug laws are violated today. However, do we want the narcotics market to have the same presence in society as the market for beer and wine? Do we want to see clever Super Bowl commercials in 2007 for heroin and opium? There are currently thousands of lawsuits against drug companies that produce legal drugs. Legalizing narcotics would open Pandora's Box.

Matthew said...

Dr. Tufte said, “Why not allow a state to legalize drugs if it wants to. Then watch what happens. If you're open-minded, it should bother you that this suggestion is never even on the table. Why is that so?”
I can see how legalizing drugs would increase the costs to dealers and buyers, and increase income for the government, but it does bother me that this suggestion is on the table. The line needs to be drawn somewhere and I for one don't want to see advertisements for speed or crack on television. Next up will be ads for hookers and it will just get worse and worse. Also, I don't see how gambling has been good when people lose all their money and then file bankruptcy. Someone always has to pay the price.

Dr. Tufte said...

I tend to agree, but it still bugs me that we can't even try this out somewhere. How do we know it won't work? Alternatively, how do we know that the lines that we've drawn do work?