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03/20/2005

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edge

Mr. Becker's very reasonable remarks should be heeded. Unfortunately, the war on drugs has reached the point at which the combatants are now non-state actors and militaries in Latin America. Those who are fighting the war down there are looking at the very edge of the fabric of civil society coming apart. It is enough to frighten anyone into either further funding the war on drugs or adopting a radical move to legalize all drugs. The move to legalize may come too late for significant portions of Latin America.

What are the three greatest black market commodities? Arms, Drugs, Oil. They can each be exchanged for the other and are in the war-crime bazaar.

Jim S

dijit says: "Many companies will fire you immediately for using illegal drugs, yet most of these do not perform drug testing.".

I would like to know what planet he's living on. What company doesn't do drug testing nowadays? Drug testing for businesses is a multi-billion dollar industry. It costs businesses far more in terms of what it costs our society by having millions of people in jail than drug use by employees does. People who have a problem with drugs should be treated, not incarcerated. Treating drug problems as a public health problem instead of a criminal problem makes much more sense.

Mike R

For years politicians used the war on drugs as an easy way to show they were tough on crime and pro family values. Most of them advocated going after the supply, since this defines the "bad guy" as foreigners and therefore not constituents. They didn't have to worry much about opposition to this policy which was ineffective against drug abuse but very effective in getting elected.

Over the last 10 years there has been a sea change in drug use in America that has been under-reported by the media. Currently the most popular drug is methamphetamine. It doesn't allow for cliche versions of the drug culture as it is not an inner city problem. It is just as common in rural areas as in cities, perhaps more common.

So now the "bad guy" is us. It's not the Columbians or the Jamaicans. Meth is American made and American consumed. This makes the old style War on Drugs even less effective since interdiction at borders is no longer a valid tactic.

This might be a good topic for a follow-on study. What are the economic costs of a "closed" system of illegal drug distribution in America. It seems that the approach being advocated by Mr. Becker would still be valid, but I think there might be some other factors that come to light when the focus shifts to Meth.

gibbon

I'll go back to saying the focusing on the cost of drugs is a mistake. Your typical user of drugs doesn't spend an inordanant amount of money on the drugs themselves.

The major problem with some drugs is the social disruption they cause. Drugs like marijuana, tobacco, caffine, and hallucinogens tend not to effect users lives very much at least in the short term. (Tobacco will shorten your life and I know a guy that got tongue cancer from smoking snot)

Other drugs, alcohol, cocaine, and methamphetamine do cause a lot of social disruption. It's hard to hold a job when you're abusing them and people who do use them often act in socially disruptive ways. To wit, cops hate dealing with drunks, crack addicts, and speed freaks. Whereas cops don't usually care about pot heads, and think a cup of coffee goes good with donuts.

That said, a suggestion is that it would probably be a good idea to pretty much give up on keeping marijuana illegal. Mostly because the social disruption caused by marijuana is small.

A good way to do that, which is sort of unique to marijuana is to simply allow people to grow small amounts of marijuana for personal consumption the same way we allow people to brew beer and wine. At the same time make it a simple misdemeanor to sell. The advantage is that society doesn't have to condone the use of marijuana via taxing it or allowing companies to openly sell it, and yet doesn't have to go out of it's way to condem it either.

LurkingGrue

My main problems with Becker's argument are the assumption of selfless and benevolent public officials and the related misplaced incentives due to directly linking government revenue to drug use via taxes.

If the goal is to use government to force the reduction of drug use (a goal I don't agree with, btw), then why make it in the government's interest to keep usage as high as possible in order to keep those tax dollars rolling in? This is the same problem with having proceeds from speeding tickets padding the coffers of the very police departments who issue them - it eventually has nothing to do with public safety.

Those tax dollars have to go into somebody's budget, and anyone who's gone through the hassle and expense of achieving a public office victory on the cutthroat political battlefield isn't likely to give up control of them very easily.

prawal

well the first thing i'd like to say is that there is significant difference between the ideologies of people in countries where drugs has become a major problem and where it still is not one of the big pains.
lets take for example my country India . what oi find here is that the few guys who are into drugs are not at all given respect and considered losers. so even before starting it one has to have a serious thought on what if his parents come to know about it??
what will they think about him??
and so on??
this what if factors are the prime reasons most of the guys who are offered , turn them down. now this comes into picture due to the tradition of joint famioly sytem in india, due to which there is close bonding between parents and their children at all points of time.
here is where the west really loses and the guys who are offered put their friends(those who offer)
above family and they just succumb to it.
If this habit has to be eradicated the most impoprtant thing will be to develop the close bonding between son and parents(even when they are old). so that the son thinks about what if ?? factors before taking drugs.

now i don't agree at all with you guys saying that
drug production and distribution be made legal. sir you seem to be taking sides with the drug consumption and you are treating as something good.
what you need to change is your paradigm on this topic.Just think about the future that once you make drugs production legal big companies will get into it (might be some marlboros will jump in). now they will market it furiously like what they do with cigarettes. now seriously do you think cigarette smoking is a good or decent habit. teen do that to look macho. same will happen with drugs and it will come out as the biggest problem humanity wil face in its history.
wbat you advice will just reduce or remove the so called drug lords from the scene and will bring american companies into the scene.
and once they come into picture it will become really easy to acquire drugs for normal people, and restraing its use will a big pain for the government. drug companies will make all kinds of drugs available to everybody in may be registered franchises but how will you limit the carrying capacity of single person. a man can then purchase 1 months drug requirement at a time from one shop or from different ones and end up consuming them in 3 days .
what do you say on that????

Daniel Chapman

Well said, prawal. This entire debate is about social norms. Those who already feel drug use is acceptable want to change society. Thankfully we havn't yet reached a point where the majority feels that way, but we're getting there fast. The laws will eventually change to keep up with public opinion. Personally, I think the stigma attached to drugs is a good thing, and the same applies to tobacco now that people are starting to stigmatize that. As for alcohol... hey... I'm from Milwaukee :)

Hey Clifford... "For every black that uses there are eight to twenty whites that use or sell." That's rather racist, wouldn't you say? Any facts to back that up?

malaclypse the tertiary

I think that the effect of legalising heroin by making it legally marketable would be disasterous at least in part because it also reduces a key non-monetary cost of consumption --namely the social cost of doing something society dissapproves of and which it prosecutes.

This assumes that: 1) Legislation is the most effective means for effecting social behavior, and 2) The ostensible opprobrium associated with drug use is merited.

...and just to be punctilious, I should let the good professor know, if he doesn't already, that the "Afghani" is Afghanistan's monitary unit, whereas "Afghan" is the adjective.

Ken

Everything said about he war on drugs is true, maybe more. But how do we know what an America of legalized drugs would really be like? More or less consumption? More, I think. Thus, more destroyed lives. And the government would then be profiting on the destruction of people's lives. Is that what we want? Do you trust the government to do anything honorable once it begins to make massive profits in the form of taxes on formerly illegal and still illicit drugs? Seems like we would just be trading one set of drug dealers for another one that will be even worse.

John Smith

Every Commander-in-Chief since Nixon has lost the War on Drugs. And its the fault of conservatives like Palooka. Palooka and his ilk transport cocaine across state borders to enjoy it in the privacy of their exurban homes and nostrils. It is their inelastic lust for cocaine that attracts smuggled china white to our shores like a NASA space magnet. The only solution is to reduce demand amongst those insulated from the homoerotic horrors of the corrections system. Therefore, we must conduct random airstrikes on low-crime neighborhoods with relatively large numbers of Republican voters. Coupled with partial legalization of drug-dealing and prostitution in inner-city public schools, this solution would dramatically decrease demand for drugs in the continental United States.

jaffer

So is it OK to legalize prostitution or to walk naked on the streets, as long as non-victim activities are taxed at an "appropriate" rate?

If illegal drugs were legalized there would be at least a hundred million more people who'd consume them. The current abstainers fear losing their jobs and social status if they were to consume illegal drugs. Moreover, as soon as the drugs are legalized, the firms that would produce and distribute them would lobby to keep the tax rates on the leglaized drugs to be similar to the rates on alcohol or cigerettes or other medicinal drugs. If an activity is legal, what's the justification to tax it at 200%? The tax rate will be determined by the political reality - i.e., by the pressure groups!

When a society prohibits an activity, because it's against the common sense of its people, the goal is to purge it. For example, we don't tolerate perjury or unwillingness to cooperate with govt. agencies or the grand jury. Becker and Posner seem to be defining prohibition as something the society discourages (to an acceptable level of consumption), rather than to mean "ZERO" tolerance. The fact that we can't afford to spend infinite resources to achieve zero tolerance does not imply we ought to tax the activity so that the equilibrium level of the activity under the tax regime is equal to what it's under prohibition!

Daniel Chapman

You're embarrassing yourself, Johnny... Palooka hasn't even chimed in on this post. Is it your goal to get comments disabled? Please keep things civil.

Anonymous

If illegal drugs were legalized there would be at least a hundred million more people who'd consume them.

That assertion is contraticted by The Netherlands' defacto legalization of cannabis. The fact is that under that legal regime, cannabis use rates in The Netherlands for 30 years have remained very much lower than rates in the USA, where it is prohibited.

See the CEDRO URLs in the Posner comments thread for the numbers.

dwayne

I am disappointed that you diluted a decent argument by concerning yourself with whether demand or supply should be artificially limited. You ostensibly abstained from a position on whether less drug use is good for society--good work--but then went on to formulate your argument based on that exact assumption. There is only one reason to make that concession: you aren't bold enough to make the stronger case that the state should have no authority with regard to the use of intoxicating substances by an individual in cases where there is no potential for the harm of another party.

Palooka

"This approach can be effective if say every 10% increase in drug prices has a large negative effect on the use of drugs. This is called an elastic demand. However, the evidence from more than a dozen studies strongly indicates that the demand for drugs is generally quite inelastic; that is, a 10% rise in their prices reduces demand only by about 5%, which means an elasticity of about . This implies that as drug prices rise, real spending on drugs increases, in this case, by about 5% for every 10% increase in price. So if the war on drugs increased the price of drugs by at least 200%- estimates suggest this increase is about right- spending on drugs would have increased enormously, which it did."

The demand for illicit drugs is quite inelastic (especially for highly addictive substances), but your point is weakened by several considerations.

The passage of time increases elasticity of demand. Though the elasticity of demand for illicit drugs may be quite inelastic in the short run, demand does becomes more elastic as time passes. Any drug strategy (whether criminalization or legalization) should be considering long-run elasticities, not short-run. Moreover, it is likely that drugs are inelastic for price increases, but elastic for price decreases. Think about it, Mr. Becker. You are making the case, if I understand it correctly, that the demand for drug use is inelastic for price increases AND decreases. Therefore, under this rationale, you conclude that legalization is the proper course of action because legalization (coupled with high taxes) will result in roughly the same amount of demand. Yet the underlying reasons for the inelasticity of demand for price increases does not apply to price decreases. Yes, demand for drugs (in the short-run) does not decrease much when the price increases. The number one reason, in my estimation, is because the consumers of those drugs have developed a pyschological or physical dependence. Addiction. The same inelasticity, then, should not be expected when prices are going down instead of up, as that would allow addicts to more liberally feed their addictions, and entice new consumers with lower prices.

It means little to those who support the war on drugs that expenditures rise. The important variables are reducing the number of individuals choosing to try drugs and reducing the consumption of current drug-users.

Your point about inelasticity only has significant force if one believes the demand for drug use is inelastic for price decreases as well as increases. However, that assumption is flawed, for the reasons I stated above.

I know Becker included a provision which would attempt to maintain high prices for drugs, avoiding some of the increased consumption by charging heavy taxes, but I just think that is infeasible. It is simply unrealistic to believe legalization would not greatly increase the consumption of drugs or not lower prices. The increased quality (no more worrying about tainted, toxic, or deadly drugs), widely avaliable information on prices, competition, decreased social stigma, lack of legal ramifications, and ease of acquisition is bound to increase consumption greatly (through lowering of prices from increased competition and consumer information and through the elimination of many of the non-monetary costs associated with now illicit drug use). Your plan is nothing but a presciption for disaster.

Jesus

"You're embarrassing yourself, Johnny... Palooka hasn't even chimed in on this post. Is it your goal to get comments disabled? Please keep things civil."

Palooka always chimes in, eventually, you %$^&head.

John Smith

As I stated before, inelasticity is the crux of the matter ("Palooka and his ilk transport cocaine across state borders to enjoy it in the privacy of their exurban homes and nostrils").

I disagree with Palooka's point that inelasticity must deteriorate over time. Highly inelastic drugs can almost always be price-gouged, because the demand is not directly linked to free choice and the ability to save, but rather physiological dependency and brute bad luck.

Someone who lives the posh life in an Arizona exurb cna afford to allocate disposable income toward recreational drug use ("It is their inelastic lust for cocaine that attracts smuggled china white to our shores like a NASA space magnet"). But improverished Africans ailing from AIDS in nations without developed market economies, basic property rights, stable governments, or suitable roads and healthcare infrastructure to deliver drugs to potential patients cannot freely save a portion of their yearly wealth to support their unprotected sex "habit" (not to mention that infected babies cannot choose their parents or conditions of birth). Nor can they reliably access and use prophylactics, because, again, their markets are failed ones. Even if, over time, their markets markedly improved and their personal savings compounded over time, of which their is no guarantee, the physiological need of any indidividual for AIDS medication remains constant and inelastic. Having greater access to portable CD players does not make one more wiling to die from AIDS, and having more money to pay for AIDS medication does not reduce one's willingness to pay for it.

As I said, reducing demand requires two steps:
1. Reducing demand amongst those whose inelasticity is due to social conditions (which could be time-sensitive, if we include cultural norms in the mix; but then, cultural norms may merely reflect personal savings) ("The only solution is to reduce demand amongst those insulated from the homoerotic horrors of the corrections system. Therefore, we must conduct random airstrikes on low-crime neighborhoods with relatively large numbers of Republican voters.").

2. Partial legalization to maximize the benefits Becker suggests ("Coupled with partial legalization of drug-dealing and prostitution in inner-city public schools, this solution would dramatically decrease demand for drugs in the continental United States").

Palooka

"I disagree with Palooka's point that inelasticity must deteriorate over time. Highly inelastic drugs can almost always be price-gouged, because the demand is not directly linked to free choice and the ability to save, but rather physiological dependency and brute bad luck."

With the passage of time it is more likely addicts will seek treament and succeed in kicking their habit. Obviously, in the very long-term, the addicts will die off.

If the price is prohibtively expensive, then fewer and fewer new users will try the drug in the first place (resulting in fewer people becoming addicted). So, over time elasticity does change, as current users leave the market from recovery or death and fewer new addicts replace them.

NotAWeedSmokerInReality

[[[It is simply unrealistic to believe legalization would not greatly increase the consumption of drugs or not lower prices. The increased quality (no more worrying about tainted, toxic, or deadly drugs), widely avaliable information on prices, competition, decreased social stigma, lack of legal ramifications, and ease of acquisition is bound to increase consumption greatly (through lowering of prices from increased competition and consumer information and through the elimination of many of the non-monetary costs associated with now illicit drug use).]]]

With this I disagree. The more potent a drug is known to be, the less of it people may use. While taking tainted drugs is a risk removed under a regime of legalization, overdosing on extremely high quality drugs is a risk amplified. The more lethal a drug is known to be, the less of it people may use.

Just to use numbers to illustrate the obvious: let's say I want to get high at the level I am comfortable (5). Pre-legalization a joint gets me somewhat high (+1), so I usually smoke five joints (+5). Post-legalization the quality of marijuana increases, so a joint will get me toasted (+4), so the optimal amount of joints for me is one-and-a-quarter. Unfortunately, I do not know this. So I smoke two joints (+8). Holy moly! Weed is craaazy! Next time, I go back to one joint (+4), and am unsatisfied. Figuring things out, next time I smoke one joint with a little bit extra ganja in it (+5). Voila! Anyway, the point is I have become more conscientious about my drug use, developed a habit of being responsible with regard to my health, and am inclined to use less in raw quantity than I would have before.

Now, you may say "So what if when the quality goes up, the amount smoked goes down? The total amount of inebriation remains the same!" Yes, the instances of pot-smoking go down also. If I sit around and smoke five joints, that is a party. Time to call my friends! If I smoke one joint rather quickly, that is a solitary event. The amount of bad social behavior will go down, because people will not engage in so much GROUP drug use, which diminishes the peer-pressure element of drug use.

Legalization may create norms against group, public use.

John Smith

"With the passage of time it is more likely addicts will seek treament and succeed in kicking their habit. Obviously, in the very long-term, the addicts will die off."

This assumes that there is treatment available. Isn't that the hurdle in the AIDS situation? There may not be access to treatment.

Martha Bento

{{{"With the passage of time it is more likely addicts will seek treament and succeed in kicking their habit. Obviously, in the very long-term, the addicts will die off."

This assumes that there is treatment available. Isn't that the hurdle in the AIDS situation? There may not be access to treatment.}}}

Not only that, John, but the addicts might be replaced by newer addicts and not die off all that quickly. My grandfather was a heroin addict and he just died at age 103.

RWS

I agree with Palooka that the elasticity of demand increases significantly over time--like a period of decades. Tobacco in the short run has a very inelastic demand, and yet tobacco consumption over the past 50 years has declined significantly for various reasons--partly the social stigma taking hold, partly taxes, partly enhanced technology to aid quitting, and partly government programs to encourage quitting. The policy of making drugs illegal is designed for the long term, so that must be taken into consideration. Right now, the two most abused and costly drugs out there are cigarettes and alcohol, both of which are legal.

The practical problem with making drugs legal and then taxing them is that I do not believe that preventing a black market to avoid taxes is as easy as 1-2-3. If, for example, taxes are 200% on pot, no one could grow pot commercially, because thieves would just harvest it from the fields at night, or farmers would be highly tempted to sell a little of their crop on the side and make big bucks, something which would be incredibly difficult to detect systematically, given that the substance is no longer illegal.

That, I think, would hopelessly doom the plan of legalizing and using taxes to achieve the same deterrent effect, especially given the cost to the policy of lowering the social stigma by legalizing the product.

WaitingforGoogle

"If the price is prohibtively expensive, then fewer and fewer new users will try the drug in the first place (resulting in fewer people becoming addicted)."

Both John and Martha are missing the point. Addicts aren't like consumers who walk into a supermarket. One of the ways drug dealers create addicts is by offering freebies. So price is not an issue for a first time user of an extremely addictive drug like heroin. And if potential drug users were like consumers in a supermarket, well, supermarkets have rebates, and sales, and all sorts of discounts to get people to try a product for the first time. It might be true that not everyone will have access to Procter and Gamble heroin, but the RiteAid brand heroin will be available to everyone, at least as a starter drug for little kids. Isn't the difference between our context and the African context precisely that companies have nothing to gain by selling drugs to "ailing Africans"? We have disposable income and will pay for drugs; they just can't afford to -- either way we can both be price-gouged, though. Maybe I'm missing something here.

Martha Bento

"Tobacco in the short run has a very inelastic demand, and yet tobacco consumption over the past 50 years has declined significantly for various reasons--partly the social stigma taking hold, partly taxes, partly enhanced technology to aid quitting, and partly government programs to encourage quitting."

Ah, if this is the debate, then it is one of necessity versus history. Demands for drugs in the past has grown more elastic over time due to a change in various social conditions. I think John's point was that demand for drugs need not NECESSARILY become more elastic over time; in other words, demand for drug X could be inelastic for ever, and we are making a bad assumption if we assume that simply because it has happened before it must necessarily happen in the future in any particular case. Doesn't your stockbroker tell you that past performance is no guarantee of future stock price? I think John is saying we can't beg the question here. That would be fallacious.

Palooka

Good tabacco analogy.

I disagree on your worry about an underground market. My worry is quite the opposite--I believe corporations will be all too good at developing, marketing, and protecting their product.

There is some underground market in cigarettes, driven by the avoidance of taxes. Taxes are high and getting higher, what is the experience in that realm? How many people actually buy cigarettes out of the back of a truck? It happens, but what percent?

I don't focus on the tax issue. If legalizing drugs is going to goes a proliferation of drug use, then I am against it. I think logic necessitates that would happen. A belief that most drug use is benign must drive this proposal, because I don't see it holding up any other way. It WILL increase drug use and the number of drug users. Is that worth the tax revenue?

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