I'm going to go off again and repete what I've said below, the problem I have what much of what you're saying is that 'drugs' are not a commodity like pork bellies. More that drugs are a group of interrelated commodities each with own pharmacological, sociological, economic, aspects.

Perosnally I think the largest difference you would see if any particular drug was legalized would be due to changes in the distribution network, not so much due to changes in price. Currently the distribution networks are highly channelized and have incomplete market coverage.

Everything we know about consumer markets for commodities suggests that under drug legalization most producers -- the vast majority of them, in fact -- would be driven out of business by market forces as effectively as they could be now by law enforcement.

Production of marijuana, for example, is now dispersed among a large number of relatively small producers, the better to evade laws against its production. If it were legal, production could be consolidated, and a much smaller number of producers could grow a much larger quantity of the drug. Among the many questions this raises is how former producers of marijuana would react. They could, I suppose, leap at the chance for secure, stable employment with DopeCo. They could give up growing marijuana and the income its sale now provides, or grow just enough for their own use. Or they could switch from producing marijuana to producing some other drug offering a comparable rate of return.

If every conceivable drug now illegal were decriminalized and made commercially available this could not happen, but I don't think even Becker is proposing this.

I'm surprised there were no comments on the fact that the government has proven itself woefully inept at regulating drugs. As anyone who still remembers high school will tell you, alcohol and tobacco are a huge part of the social life of teenagers in this country, despite the fact that they're illegal. The same goes for college. Even at the tech school I went to, which was recently rate one of the worst party schools in the country, a very large percent of the students drank a lot and often. Legalizing more drugs might seem like a good idea if you assume the government can keep young people from consuming, but this is a risky assumption to make. Does anyone have confidence in the government keeping newly legalized drugs out of the hands of high school and college students?

I have absolutely no confidence in government keeping illegal drugs out of the hands of children. The reason is obvious. Drug dealers have very little incentive to check IDs. They have no license to lose.

Exactly, Bob, and I would add to it that legalizing possession greatly complicates enforcement of a taxation regime, as I stated in my prior comments. The mere fact that some possession (through purchasing at an approved retailer that pays the tax) is legal whereas midnight harvesting or the farmer selling a little on the side is not would doom any attempt at legalizing and highly regulating. Cheating this regulatory scheme is wayyy too easy, as the failure of the authorities to control teenage alcohol and tobacco use shows.

It's the same principle as how the government regulates monopolies in different ways (antitrust laws, government ownership, rate regulation) depending on the specific industry. Costs of practical, effective enforcement are key to the regulation choice.

fling, one of the key reasons why illegal drugs have an active black market like you said is because they are so costly, which means that the dealer can make a very good profit. If the drugs were legalized but taxed at a rate that would make them cost just as much, there would be even more of a black market from dealers wanting to make a buck from capturing windfall profits. Cigarettes and alcohol have pretty low taxes by comparison, and so there is not an organized black market to capture that profit. The only way to eliminate the black market is to legalize it and have taxes so low that one won't develop.

Also, we see a lot more kids lighting up cigarettes in the high school parking lot than marijuana, for whatever that is worth empirically.

fling93: Drug dealers have very little incentive to check IDs. They have no license to lose.

RWS: Also, we see a lot more kids lighting up cigarettes in the high school parking lot than marijuana, for whatever that is worth empirically.

Kids still have an incentive to not be seen smoking marijuana, so this says nothing about the incentives to not sell to kids.

RWS: If the drugs were legalized but taxed at a rate that would make them cost just as much, there would be even more of a black market from dealers wanting to make a buck from capturing windfall profits.

That can only happen if the demand for the illegal drugs stayed the same. Clearly, a competing legal source would actually decrease it greatly. And a government that currently has no incentive to actually win the drug war would have a direct financial incentive in making sure consumers bought the legal version and paid the tax. As would the legal sellers, for obvious reasons. And since they will take advantage of the economies of scale and will also no longer need to spend money on automatic weapons, they will have significant financial resources to fight the black market.

The ease of growing marijuana yourself poses more problems for the current enforcement strategy than Becker's proposal. Under the current system, potential buyers must assume risk one way or another. Growing your own is typically a way to manage your risk by avoiding getting involved with drug dealers and risky transactions. The penalty is higher but the odds of getting caught are greatly reduced, as you will no longer have to transport the illegal drug. So the incentive to grow your own is much reduced if you have a legal alternative, especially when the legal sources will compete entirely on price and not on their ability to violently kick competitors off of their turf.

As I said on the previous post, I agree a black market would still exist, but their profits would be severely undercut by the legal market and thus it would be much smaller (and much less violent, since the stakes are lower). And there's also Becker's point on the incentives for producers to not participate in the black market. Future revenue flows are much easier to manage and project if you can rely on the court system instead of your ability to inflict violence.