Forbes: Time to Legalize Drugs

Forbes magazine, long considered one of the most important outlets for business, has an article explaining why the war on drugs has been a massive failure and why it’s time to legalize drugs and end the destruction. It’s written by economist Art Carden.

Should drugs—especially marijuana—be legal? The answer is “yes.” Immediately. Without hesitation. Do not pass Go. Do not collect $200 seized in a civil asset forfeiture. The war on drugs has been a dismal failure. It’s high time to end prohibition. Even if you aren’t willing to go whole-hog and legalize all drugs, at the very least we should legalize marijuana…

Prohibition is a textbook example of a policy with negative unintended consequences. Literally: it’s an example in the textbook I use in my introductory economics classes (Cowen and Tabarrok, Modern Principles of Economics if you’re curious) and in the most popular introductory economics textbook in the world (by N. Gregory Mankiw).The demand curve for drugs is extremely inelastic, meaning that people don’t change their drug consumption very much in response to changes in prices. Therefore, vigorous enforcement means higher prices and higher revenues for drug dealers. In fact, I’ll defer to Cowen and Tabarrok—page 60 of the first edition, if you’re still curious—for a discussion of the basic economic logic:

The more effective prohibition is at raising costs, the greater are drug industry revenues. So, more effective prohibition means that drug sellers have more money to buy guns, pay bribes, fund the dealers, and even research and develop new technologies in drug delivery (like crack cocaine). It’s hard to beat an enemy that gets stronger the more you strike against him or her.

People associate the drug trade with crime and violence; indeed, the newspapers occasionally feature stories about drug kingpins doing horrifying things to underlings and competitors. These aren’t caused by the drugs themselves but from the fact that they are illegal (which means the market is underground) and addictive (which means demanders aren’t very price sensitive).

That only scratches the surface of the many reasons why the drug war should be ended. Are we seeing the beginning of a real movement to do that? Quite possibly. I hope so.

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  • Tsu Dho Nimh

    My family was smuggling whiskey from Canada during prohibition on a small scale – it put my dad through college, bought some ranches for his cousins, etc.

    They sent their last pack train of mules across the border when prohibition was teetering. There was no more money to be made.

    The “war on drugs” has been nothing but price support for the drug lords, enabling them to buy off entire local and some national governments. They would collapse if the “war” ended.

    The crime associated with addiction is not the result of taking the drugs. It’s the result of the scarcity and high prices making it impossible to buy

    Before the whole stupid mess started, many people were dependent on pain killing opiates: they got their drugs and they could keep working, and live crime-free lives.

  • “Are we seeing the beginning of a real movement to do that?”

    Nope – the beginning was way back in the 60s and 70s. We are seeing the widespread mainstreaming of the movement – i.e. these ideas are no longer just the domain of hippies and right-wing economists, but are gaining widespread public traction (says a guy who sets their homepage to Transform Drug Policy Foundation, and belongs to the UK sister group of America’s own Students for Sensible Drug Policy).

  • One instinctive quibble: Overzealous enforcement would bring up the price and thus revenue, but it’d also raise the cost.

    Of course, they probably raised the price in greater proportion than simply offsetting costs because, hey, who’s going to report them to the Better Business Bureau?

  • otrame

    Marijuana can be grown in your back yard. Of course, the potent stuff they sell these days (a hybrid of Cannibis sativa and C. indica) is usually grown under lights that are very bright, increasing both the rapidity with which it blooms and the potency, so there would still be a market for it. So tax the shit out of it.

    I say treat them all like alcohol.

    But, but, but, Cocaine!!! Meth!!!! The damage they do!!!

    Yes, they do. Believe me, I am not down-playing that. But the real killer, the drug that is directly responsible for more deaths every year than all the others COMBINED, and is, in addition, by far the most addictive, is perfectly legal and always has been.

    Drug-related problems are a medical issue and should be treated as such. The fact that some potentially addictive drugs are illegal makes if very hard to treat drug-related illnesses. It also make some people rich. Including a whole bunch of bankers who don’t even know what crack looks like, but very much enjoy the profit they make storing money made by those who do.

    And one more thing. When these drugs are legalized, drastically reducing the profits to be made controlling the people who grow the plants that supply them, the farmers of whole countries will be freed of the forces that keep them mired in the 16th century.

    But it will be a hard fight. A lot of drug money will go into the coffers of any political who will fight to keep those drugs illegal.

  • Obama:

    “I can’t nullify congressional law. I can’t ask the Justice Department to say, “Ignore completely a federal law that’s on the books.” What I can say is, “Use your prosecutorial discretion and properly prioritize your resources to go after things that are really doing folks damage.” As a consequence, there haven’t been prosecutions of users of marijuana for medical purposes.”

    To the contrary: when the feds raided the medical marijuana outlet Oaksterdam in Oakland, California they also confiscated the customer data base. For what reason if not to prosecute? Or at least instill fear, which is a form of prosecution.

    Also, is the legality of marijuana actually “Congressional” law? I had thought that I read somewhere that the president can, with the stroke of a pen, reclassify a drug.

    Anyway it is heartening that this article was published in Forbes.

  • dingojack

    “To the contrary: when the feds raided the medical marijuana outlet Oaksterdam in Oakland, California they also confiscated the customer data base. For what reason if not to prosecute? Or at least instill fear, which is a form of prosecution persecution“.



  • baal

    I’d prefer to decriminalize rather than legalize (at least for certain classes of drugs). I know I’m quibbling a bit but there isn’t a safe way to use meth (for example).

  • d cwilson

    Also, is the legality of marijuana actually “Congressional” law? I had thought that I read somewhere that the president can, with the stroke of a pen, reclassify a drug.

    Actually, the federal Controlled Substances Act specifically names which drugs are classified as Schedule I substances and “Marihuana” and THC are both on the list, so, Obama is correct in that it takes an act of Congress to reclassify it.

    One of the reasons why it’s going to be tough to end the war on drugs is that it’s becomes a huge revenue generator for law enforcement. Property seizures are big business. Then there’s our private prison industry who constantly lobbies state legislatures for harsher sentences. Gotta fill those cells somehow!

    The only way we’ll truly see progress in ending the war on drugs is it at least 20 states vote to decriminalize marijuana, probably through ballot initiatives. Only then will it become “safe” for a national candidate to come out in favor of ending the war on drugs.

  • Doug Little

    Speaking of this I just received this the other day from We the People. Sorry for the length.

    By Benjamin B. Tucker, Deputy Director of State, Local and Tribal Affairs at the Office of National Drug Control Policy

    Thank you for participating in We the People and signing a petition related to drug control policy in the United States. The public engagement these petitions provide informs our work moving forward. And in many cases, we’ve found it also offers an opportunity to explain our view — and perhaps share some things we’re already doing that you may not know about.

    For example, we agree that it’s time to move past the idea of an enforcement-only “War on Drugs” and focus on reforming the drug control, treatment, and incarceration systems in the United States. That’s not just rhetoric; here are some specific steps we’ve taken:

    • In August 2010, President Obama signed the Fair Sentencing Act into law. This important and long-overdue criminal justice reform dramatically reduced a 100-to-1 sentencing disparity between powder and crack cocaine. And more recently, we advocated for, and the U.S. Sentencing Commission approved, the retroactive application of these sentencing guidelines that became effective on November 1, 2011.

    • This Administration strongly supports drug courts, which place non-violent drug offenders into treatment and provide them with supportive services instead of incarceration. There are over 2,600 drug courts across the Nation, diverting about 120,000 people a year into treatment instead of prison.

    • The Administration is taking action to implement the Second Chance Act, which provides resources for programs that improve coordination of reentry services and policies at the state, tribal, and local levels, including demonstration grants, reentry courts, family-centered programs, substance abuse treatment, employment, mentoring, and other services needed to improve transition from prison and jail to communities and reduce recidivism.

    • The Administration is working to help formerly incarcerated individuals successfully reenter society after serving their terms. This is vital because, of the more than two million people behind bars, 95 percent of them will be released back into their communities. Successful, evidence-based reentry initiatives provide a major opportunity to reduce recidivism, save taxpayer dollars, and make our communities safer. To break the cycle, in 2010, the Department of Justice awarded $100 million in grants to support 178 state and local reentry programs that provide a wide range of services. In late September, the Department awarded another $83 million to 118 new grantees. In addition, the Department of Justice is successfully encouraging the creation of reentry courts for Federal offenders across the country.

    Since day one, President Obama has led the way in reforming our Nation’s drug policies by, among other things, addressing drug use and its consequences as a public health problem. Science shows that drug addiction is a chronic disease of the brain. It affects judgment and reasoning, and changes the brain’s chemistry. By recognizing drug addiction as a disease, we are working to prevent and treat the underlying substance use disorders that drive a great deal of crime and recidivism in America. We believe that it makes much more sense to support programs that address underlying substance abuse problems before the condition becomes chronic and harder to treat. The President’s National Drug Control Strategy balances efforts to prevent and treat substance use disorders with smart law enforcement efforts that work to dismantle drug trafficking organizations.

    Our Nation’s illegal drug problem harms every sector of our society. It tears apart families, strains our healthcare system, drives crime, and places tremendous burdens on our criminal justice system. In fact, last year, the Department of Justice released new data showing that drug use costs our society about $193 billion a year (PDF). Of that amount, $56 billion of those dollars can be traced directly back to costs associated solely with the criminal justice system.

    While the vast majority of individuals in Federal and state prisons for drug offenses were sentenced for more serious drug trafficking offenses (as opposed to simple possession), these staggering costs reveal the need to continue reforming our Nation’s criminal justice system to break the cycle of drug use, crime, incarceration, and re-arrest. We have made significant progress over the past three years, but more needs to be done.

    We are working with our Federal partners to improve access to employment, eliminate barriers to accessing benefits and health care, and clarify Federal regulations and laws which have been misinterpreted as erecting barriers to reentry for formerly incarcerated individuals:

    • The Administration has worked to make certain that local public housing authorities understand Federal law regarding the discretion housing authorities have to allow ex-offenders access to public housing. Research shows that ex-offenders who do not find stable housing in the community are more likely to recidivate than those who do. Studies also have found that the majority of people released from prison intend to return to their families, families who may live in public or other subsidized housing. Clarifying these rules allowing ex-offenders to rejoin their families is therefore an important part of our overall criminal justice reform efforts.

    • The Administration is also funding a demonstration project involving four jurisdictions to support the successful reunification of formerly incarcerated or chronically homeless men and women with their families, and to offer the comprehensive support needed to help them avoid reoffending while becoming both social and economic assets to their family and community.

    • The Department of Justice has urged state attorneys general to review the legal collateral consequences of their State laws that may burden ex-offenders’ successful reentry into society. This effort parallels the Department of Justice-led review of Federal collateral consequences as a step to reducing the unnecessary burdens placed upon reentering offenders.

    We continue to strongly support the role law enforcement plays in making communities safer and taking down violent transnational criminal organizations that threaten public safety. But the Obama Administration’s approach to drug policy is also guided by three facts: addiction is a disease that can be treated; people can recover; and innovative new criminal justice reforms can stop the revolving door of drug use, crime, incarceration, and re-arrest.

  • jayarrrr

    I have always believed that we should (at least) decriminalize, regulate, and tax weed, if not all drugs.

    we already have experience with how to take care of people who are unable or unwilling to moderate their consumption because alcohol is just another drug, and we’ve had decades of work with that one.

    Sometimes when I’m having this discussion with Law and Order types, they throw out the “So you’d be OK with some stoned driver running over your kid” argument. Ridiculous. I wouldn’t “be OK” with some DRUNK running over my kid, why would I be more accepting of a pothead? I guess most these people are just Jake with getting in a wreck with a drunk, I don’t know, maybe because alcohol is more socially acceptable? after all, it *IS* legal, right?

    It’s past time to admit that we lost the “War of Drugs” and put it in the dustbin of history, along with the Volstead Act.

  • @ yayarr

    Over the years I’ve talked with a lot of law enforcement types. Chiefs of police are almost universally in favor of at least decriminalizing marijuana, while sheriffs take the opposite view.

    The former say it’s not working and drains resources that could be used to address other crimes, while the sheriffs, in this area at least, almost always have control of a drug squad and a corresponding budget that allows for more employees and lots of toys like pickup trucks and four-wheelers. They also get the chance to seize money and cars.

    Sheriffs almost universally rave about DARE (Drug Abuse Resistance Education) programs, with which they are able to pay a portion of school resource officers’ salaries through federal grants, even though that program has been shown to have virtually no impact on the number of students who use drugs later in life. (DARE is a fifth-grade program).

  • Baal @ 7:

    “I’d prefer to decriminalize rather than legalize…I know I’m quibbling a bit but there isn’t a safe way to use meth”

    There is no way of using meth that becomes safer when the meth is produced by unregulated criminal producers. And that’s the thing – we need legalization (i.e. legal regulation of the whole drugs industry from production, through wholesale and retail to consumption) if we are to limit both the harms caused by the use of illegally produced drugs and those caused by the criminal black market.

    Mere decriminalization (i.e. no longer having it a crime to possess/use drugs, but still keeping production and sale illegal) keeps organised crime in control and prevents us from making the drugs as safe as they can be.

  • anandine

    I agree that drugs* should be legalized, but I doubt that it would affect the cartels much. I’ve read that marijuana accounts for 15% of mexican drug cartels’ income. If it were legalized, they would just shift more of their resources to kidnapping.

    *except antibiotics. There is a good public health reason for keeping them prescription only, to minimize resistant strains of microbes.

  • Amusingly, Anandine, this is an issue where the US government has been seen to both hype up the percentage of the Mexican drug cartels’ income that comes from cannabis when they want to berate the public for propping up organised crime, and downplay the amount when their previous high figures started to get used as an argument for why we should take the cannabis trade out of their hands by legalizing it. Heads they win, tails you lose.

    But we have good reason to expect that when all drugs are legally regulated it will seriously weaken the cartels – once you remove the corruption of the police and judiciary by the cartels, the money spent on law enforcement, and the potential gains from taxing the production of drugs, the state will have far more law enforcement resources to target at organised criminals that remain in the game, and the sort of crimes they will have to resort to to make money will no longer be consensual ones like the sale of a substance to a willing buyer, but victimising ones like kidnapping, which will give people much greater incentive to report it to the police in the first place.

    It won’t be perfect, of course, but there’s only so much money to be made out of victimising people, and it’s a much lower amount than you can make out of selling people what they want to buy.

  • The demand curve for drugs is extremely inelastic, meaning that people don’t change their drug consumption very much in response to changes in prices.

    I have to express some skepticism of this. Are there any empirical studies that show that drug consumption does not respond to prices? I’m pretty sure that if good quality weed could be had for $10 an ounce at the corner grocery, lots of people (myself included) would be more inclined to consume it.

    What is true is that the drug war has not stopped consumption completely, but it’s hard to find a good control group to compare the current situation to.

  • David C Brayton

    In my senior year of high school, I ran a ‘legalize the cultivation of marijuana’ case during league debates. Wow. The response from some ‘old’ judges was breathtaking–some were apoplectic. The negative team could have sung ABBA songs for their speeches–I still lost those debates.

    So, my point is that legalization is proceeding along the same path as acceptance of gay marriage. Younger folks can see the wisdom of it and as the older generation dies off, there is much more acceptance of the idea.

    But the financial incentive to law enforcement to prosecute this war is titanic. It will be a long time before meaningful legalization takes hold, I’m afraid.

  • marcus

    Legalize marijuana absolutely. For the “harder” more addictive drugs I would recommend decriminalization, regulation, and treatment, read no incarceration for simple abuse and possession. Obviously we can’t allow outlaw bikers and their ilk to poison the environment and people with the crap they cook up in their hideous labs, but those issues can be handled in a more nuanced and effective manner under environmental protection and human health laws.

  • d cwilson

    I have to express some skepticism of this. Are there any empirical studies that show that drug consumption does not respond to prices?

    Not sure about illegal drugs, but I have seen studies that have shown that price has virtually no effect on tobacco sales. Pretty strong evidence in support to the power of its addiction.

  • daved

    I know I’m quibbling a bit but there isn’t a safe way to use meth (for example).

    Oh, don’t be ridiculous. Of course there is. Ever heard of Adderall? That’s straight methamphetamine. (And, frankly, I’d love to be able to get it over-the-counter, if there were some way to manufacture it so that it couldn’t be abused.)

    Now, if you want to argue that there isn’t a safe way to use meth to get high, OK, I’ll agree that there probably isn’t.

  • Zugswang

    It reiterates what a lot of us have known for a long time, so it’s good to see this getting more mainstream appeal, but this comment by the author made me groan a little (page 7 of comments):

    I’m excited that this article has gotten so many massive hits. I want to reiterate that it isn’t a puff piece, so let’s keep it going: there’s a chronic shortage of these kinds of articles, so we need to make sure there are more in the pipe. If we don’t continue to pour out bowls of wrath on hazy arguments for prohibition, liberty might go up in smoke.

  • abb3w

    @16, David C Brayton: So, my point is that legalization is proceeding along the same path as acceptance of gay marriage.

    Similar, but no. Gay Marriage, versus Grass. While acceptance of Teh Gay seems to continue increasing with cohorts all the way through to GenY, Grass seems to have mostly plateaued since the Boomers.

    Of course, there’s still some shifts within Cohorts over time; there’s been a recent short-term uptick in acceptance of and uncertainty about grass; I’d guess a mix of a desire for self-medication opportunity and “don’t we have more important worries?”, similar to the prohibition repeal for the Great Depression. The Gallup data suggests it wasn’t a fluke; however, it’s still too short-term to call a sustained trend.

    Give it another decade, I think. Or the GOP winning in 2012 but then completely screwing up the economy… but I’d prefer the slower means, thankyouverymuch.

  • Not sure about illegal drugs, but I have seen studies that have shown that price has virtually no effect on tobacco sales. Pretty strong evidence in support to the power of its addiction.

    But I thought that the continued reduction in smoking was due in part to having taxed the shit out of cigarettes (as witnessed by higher rates of quitting in high tax states). Although there’s obviously more to it than that, I thought that it was more or less agreed on by public health types that increased cost was a meaningful disincentive.

  • Pingback: Forbes Gets It: Prohibition Doesn’t Work « Foster Disbelief()

  • snebo154

    By the time I’m finished here my sentiments will be pretty obvious and I will have pissed off more than a few people. Nothing new there.

    Let me start by saying that I may have, at some point in the last 18 years, used recreational drugs. I read these discussions and I always hear voices in my head (unfortunately, nothing new there either) singing to the old Kennel Ration jingle; “My drug’s better than your drug, my drug’s better than yours”. This is universal, I was always amazed at the people who would go to some of the forum sights like “the Hive” which was basically a group of, in most cases, fairly intelligent underground chemists trading ideas on how to make meth and ecstasy. (OK, I may have gotten pretty deep into the drug culture over the last 18 yrs) There was a lot of discussion about legalization with a surprising number of advocates of legalizing meth and “x” but keeping the really bad drugs like crack and heroin illegal. Right is right, wrong is wrong, and if alcohol continues to be legal I am going to need a pretty warped sense of justice or morals or, well pretty much anything else to say that heroin shouldn’t be.

    Baal @7

    “I know I’m quibbling a bit but there isn’t a safe way to use meth”

    Someone want to tell me a safe to use any drug. The “safest” way to use a drug is to use the least amount you can and still get the effects that you want. Take enough Tylenol to get rid of your headache while remembering that far more people die every year of Tylenol overdose than of any other drug, legal or illegal.

    Try reading “Pihkal” By Shulgin. There is a set of instructions on what supplements to take to offset almost all negative effects of meth use. These instructions will give you the “safest” way to do meth. By the way, his research was done legally with the knowledge and approval of the Govt. who then yanked his license and (unsuccessfully) prosecuted him when he didn’t come up with the results that they were expecting.

    The “safest” way to drink alcohol? Drink responsibly but don’t forget that every study ever done shows that far and away the most damage done to a fetus by any recreational drug comes from alcohol. If you get a chance, read an autopsy report done on a long term alcoholic. Black brain disease isn’t pretty.

    The “safest” way to do any drug is to do a one manufactured under the highest (pun intended) possible quality control conditions. This doesn’t happen in a garage unsupervised by anyone who knows enough chemistry to graduate high school. (pun unavoidable) This happens in a well stocked pharmaceutical lab staffed by properly educated people. Dangerous adulterants are another negative aspect of drug use that comes from criminalization.

    boselecta @14

    Thanks for your input, it was well thought out and well stated. And,, oh yeah, right.

    Drugs are like hammers, they are tools. There is no such thing as a good drug or a bad drug any more than there are good hammers and bad hammers. Both are things which can add quality to our lives. Either can be detrimental and dangerous when misused.

    I do not advocate the use of illegal drugs, I think they should all be legal. And to whom it may concern, I’ve been clean for about a year. Most of the time I’m happy with that choice. “But there are days.” (gratuitous Jon Luc Picard quote)