Split Votes: A Nation Divided on the Marijuana/Drug Legalization Debate

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A number of people in America use recreational drugs, especially marijuana.  One estimate says that over 76 million Americans admitted to having tried marijuana (DRUG WAR FACTS, Marijuana).  According the US federal law, these people are criminals.  If caught using illegal drugs a person can face penalties ranging from a one hundred dollar fine to life in prison.  Whether or not these laws and penalties are good for the well being of the country and its citizens has been a debate for decades.  Numerous groups and individuals, representing a range of sectors in our society, have opinions on the subject.  They use various economic and moral arguments to either promote or denounce drugs and drug use.  A group of economists uses the notion of free markets to argue for drug policy reform.  The government uses a cost/benefit analysis to refute such claims.  Governor Gary Johnson from New Mexico expresses the need for the government to take an active role in drug legalization rather than prohibition.  Think tanks disagree on the proper course for US drug policy.  Special interest groups have been created solely to fight for people's right to use drugs, and other groups have been formed to promote stricter drug laws and enforcement. Media editorials praise drug policy reform and criticize policy makers.   Public opinion polls and university students are split on marijuana legalization. The Catholic Church preaches moderation as opposed to abstinence.  And popular music groups sing songs praising the joys of getting high.  Though each sector has an opinion, and some sectors have more than one, the degree to which each group addresses the topic varies greatly.  Detailed or brief, everyone seems to have an opinion on illicit drugs and marijuana legalization. In this essay I examine the ways in which the following sectors of society talk about legalizing drugs/marijuana: professional economics, government, think tanks, special interest groups, media, public opinion, religion, and popular culture.  I have found that the drug/marijuana legalization debate is separated into two distinct arguments. 1) What is cost effective? 2) What is morally right?  The cost-effective argument deals mostly with the best way to allocate funds and resources.  The variables are mostly measurable, dealing with monetary figures and surplus calculations.  The moral debate deals more with variables that cannot be mathematically measured like spirituality and personal freedoms.  My thesis is that since equal attention has been given to both arguments, the economics profession can only significantly contribute to part of the debate.  Also, because there are numerous variables to consider, and these variables are difficult to distinguish, the economics argument is difficult to substantiate.              

Many neoclassical economists disagree with current U.S. drug policy.  One such group of economists is Jeffrey Miron, Suren Basov, Mireille Jacobson.  Prof. Miron is an economics professor at Boston University.  He attained his bachelor’s degree at Swarthmore in 1979 and a doctorate at MIT in 1984.  He has published over forty articles on current public policy and economics.  One of his main areas of study is drug prohibition in the U.S.  He proclaims himself a “libertarian apologist,” but criticizes conservatives in his work on drug reform.  He feels conservatives are hypocritical because they “profess to believe in freedom, personal responsibility, and small government, yet they support a government program – drug prohibition – that costs billions and billions of dollars, destroys civil liberties, and criminalizes private behavior” (MJM).  Prof. Miron wrote The Case for Drug Legalization to promote an anti-prohibitive stance for illicit drugs. Economics professors Prof. Basov of Boston University, Prof. Jacobson of Harvard University, and Prof. Miron co-wrote Prohibition and the Markets for Illegal Drugs: An Overview of Recent History.  Their belief that the market should be used to regulate drugs in the U.S. is clear, though the exact process of how this should come about is left open.  Prof. Miron notes “economists and others are a bit vague about exactly what their proposals are for changing policy.  Perhaps that is because there is such a wide gulf between legalizers and prohibitionists” (Miron).

What these economists will do is criticize current policy.  They say "that over the past 25 years in the United States, enforcement of drug prohibition has increased substantially while production and consumption of drugs have likely increased, and prices have fallen dramatically" (Prohibition 6).  For example, "in 1969, $65 million was spent by the Nixon administration on the drug war; in 1982 the Reagan administration spent $1.65 billion; and in 2000 the Clinton administration spent more than $17.9 billion" (DRUG WAR FACTS, Econ).  This method of argumentation is the strongest for economists.  The public expects economists to deal with subjects like cost effectiveness and the proficient use of resources.  Most modern economist also say the market is efficient at regulating the relationship between producers and consumers.  These economists view drugs as any other good.  What is
"right" to this profession is determined by what produces the greatest amount of surplus.  The government's policies toward illicit drugs are institutionalist and goes neoclassical economics.  They wish to manage the market instead of letting the market act on its own.  The government dictates and attempts to smother the market because its feels that drug use has negative externalities; they justify the money spent by claiming, without regulation, the cost of drug use to society would be much higher than the cost of prohibition.

Those for legalization claim that this institutionalist policy is ineffective.  From 1980 to 2000, total drug arrests for the possession, not sale, of marijuana increased from 338,664 to 646,042" (DRUG WAR FACTS, Marijuana).  This statistic does not prove that drug use has gone up or down.  There is a possibility that, with increased spending, law enforcement agencies became more efficient and were able to catch more drug users than in the past. What this does show is that current policy is turning more Americans into prisoners.  The main effect seems to be increased incarceration rather than decreased usage.

Prohibition seeks to reduce the consumption of drugs, yet “existing research provides only weak empirical support that increased enforcement reduces drug consumption” (Prohibition 2).  On the contrary, though “drug prohibition enforcement has increased substantially over time; drug production and consumption have, if anything, increased over the past twenty-five years; and drug prices have fallen substantially over the same period” (Prohibition 3).  From the evidence presented, it seems the government's attempt to control the drug market through a broad-based policy program has been ineffective.  Prohibiting drugs and criminalizing their use has not resulted in reducing consumption or production of illegal substances.

Prof. Miron believes that prohibition results in a number of negative externalities.  “Drug prohibition does not eliminate drug markets or drug use; instead, it simply moves it under ground” (Legalization 1).  Because of this, the drug market cannot be regulated like legal markets.  This causes inefficiencies and negative externalities that would be reduced or made nonexistent if the drug market could function in legitimate markets.  “Increased crime of various kinds” is a by-product of prohibition (Legalization).  The market can handle disputes in a civilized manner because of participants’ access to the judicial system.  “Prohibition prevents buyers and sellers from using the criminal justice system to resolve disputes, so these persons use violence instead” (Legalization 1).  If drugs were decriminalized and brought into an open market, violent disputes would be greatly reduced because participants could use the system as a mediator.

The market system also regulates the quality of goods.  Neoclassical economics shows that competition among suppliers encourages suppliers to sell high quality goods for fear of losing customers to competitors.  With products like food, tobacco, and alcohol, regulative measures require warning, ingredient, and purity labels to educate consumers.  Neither neoclassical market mechanisms, nor protective measures, exist in the illegal drug market.  “Drug users face heightened uncertainty about quality and purity of the drugs they purchase” (Legalization 2).  Yet people still use these unlabeled drugs, often resulting in accidental poisonings and overdoses.  The treatment of these incidents creates a cost to society that Prof. Miron hypothesizes could be greatly reduced or eliminated if drugs were legalized and/or regulated.  By adopting a neoclassical stance towards the drug market, he shows that many of the inconsistencies and inefficiencies of the current illegal drug market can be eliminated.  Using history as a model, this is a reasonable idea.  The black market for alcohol disappeared shortly after prohibition was repealed.  Government regulation forced producers to mark alcohol with ingredient and proof labels.  With the decrease in crime and the introduction of safer products, society was better off when the market was granted more freedom to work than when prohibition forced the market underground.

These economists argue that the government can do the same with drugs as it did with alcohol.  Prof. Miron presumes that the U.S. is missing out on an untapped resource.  “Using prohibition to deter drug consumption means society cannot levy sin taxes on sales of drugs or collect income taxes from those working in the drug trade.  This means drug suppliers and users . . . gain at the expense of taxpayers generally, rather than contributing their fair share” (Legalization 2-3).  Instead of spending billions of dollars on a policy that has not been effective, the U.S. could be making billions of dollars taxing products people will use whether they are legal or not.  The current policy is creating a huge dead weight lost by spending unnecessary funds and by not taking advantage of a stable, if not growing, market.

In Prof. Basov's, Prof. Jacobson's and Prof. Miron's opinions, the government is handling the drug market inefficiently.  The institutionalist approach of strictly regulating the drug market has increased government spending, increased incarceration rates, and left consumption and production largely unchanged. According to Prof. Miron’s paper, the drug market is not going to disappear or allow itself to be destroyed.  The demand for drugs, especially with addicts, who are the main consumers, is largely inelastic.  This means that prosecuting drug users and attacking the demand side will not be effective.  Nor has drug policy been able to deter producers or raise the price of manufacturing drugs, meaning that attacking the supply side will also be ineffective.  But by accepting a neoclassical market and legalizing drugs, the market will eliminate many of the inefficiencies and negative externalities, along with giving the government more tax revenues to put towards more effective policies.

Drug prohibition and legalization are not a widely covered by economists.  Few in-depth economic reports on the subject are readily available.  This may be due to the fact that there are numerous variables to consider when analyzing the costs and benefits of legalization.  What exactly is a "cost" of drug use?  The answer is difficult to determine.  If a person commits a murder and has marijuana in his or her system, but was not high at the time, should this be considered a drug-related crime?  Or if someone contracts food poisoning while eating, and happens to be under the influence of marijuana, should this be considered a drug-related illness?  Taking obscure factors like these into account would be difficult if not impossible.  This makes the drug market difficult to analyze and makes cost and benefit estimates educated guesses at best.  

The professional literature that has been written about legalization has done a decent job considering the mentioned limitations.  Neoclassical economics cannot adequately deal with this topic until it is more defined.  In order for economists to produce a more convincing argument, all the variables must be carefully outlined so that the public has a clear picture of the costs and benefits associated with a more open market.  Until there is a general consensus, at least in the economics profession, on the exact variables that should be used, there will be no way to produce a model for a free drug market that will be readily accepted.        

The U.S. Department of Justice argues against these neoclassical market suggestions for now illicit substances. They believe that drug use has a negative effect on society.  Letting the drug market balance itself in neoclassical- economic fashion would cost society more than prohibition does.  In chapter four of the U.S. Department of Justice's report Myths and Misconceptions of Drug Legalization, they refute economic-based arguments for drug legalization.

The U.S. Department of Justice uses cost/benefit analysis to disprove the argument that drugs should be legalized.  They attack the proponents of legalization's arguments head on and discredit them using hard numbers.  Legalization backers say legalization of now illegal drugs will cut current spending on the police and the legal system in dealing with drug-related charges.  Also, proponents say the government will make a great deal of revenue taxing the production and sale of currently illegal substances.  The U.S. Dept. of Justice rebuts by arguing, "Any such taxation scheme would produce a criminal black market. Consequently, we would still have to spend money funding police, courts, and the like to fight this problem" (Myths).  If drugs were legalized, the same expenditures on the judicial system would remain and drugs would be more readily available to the public.

The U.S. Dept. of Justice does not say how they concluded that the cost of regulating a legalized drug market would be more than the cost of jurisdiction over an illegal one.  Nor is their argument about taxation causing a criminal black market substantiated by current affairs.  Increased taxation on alcohol and tobacco has yet to create a criminal black market for the products.  If there is such a black market, it is not large enough to spark national concern.

The U.S. Department of Justice argues that there would be no economic gain for legalizing drugs.  On the contrary, legalization would produce a net loss to society.  "Already, drug addicts cost the country roughly $33 billion dollars a year in lost productivity and job related accidents . . . Take, for example, the Conrail/Amtrak disaster of January 4, 1987.  Because an engineer and a brakeman were high on marijuana, their train collided with another, killing sixteen people and injuring 175.96 [sic]" (Myths 2).  The government tries to prove that legalization would only increase drug use, and therefore increase these negative externalities to society.  Also, taxation is a non-issue.  The government states that the revenue collected from drug sales and use would counterbalance the losses to society.  "The total revenue collected from alcohol taxes at the federal, state, and local levels amount to about $13.1 billion a year, a paltry sum compared to the social costs associated with alcohol consumption -- something in the neighborhood of $100 billion" (Myths 1).  According to their data, the money they spend now to fight drug use is small in comparison to the projected cost of damages to society legalization would produce.  "From a purely economic standpoint, legalization is not cost effective" (Myths 2).  Though $100 billion in damages is a convincing number against legalizing any other recreational narcotic, the U.S. Dept. of Justice does not say how inclusive the number is or how they calculated it.  What exactly constitutes damage from alcohol?  By not supplying more detailed explanations of their facts their argument becomes less convincing when examined further.

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Instead of justifying current government policies for drug prohibition, the U.S Dept. of Justice instead discredits the neoclassical argument for legalization.  They present unsubstantiated facts and figures that show that the amount they spend to fight drugs is a fraction of the damages to society drugs are responsible for.  They also claim legalization would only make the problem worse, while giving little in return. At this time, both arguments are primarily based on theory.  Since wide-scale drug legalization has never been attempted in modern U.S. society, predictions about the damages and benefits from legalization are largely speculative.  On the one ...

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