The Case for Small Government

A Libertarian Perspective on Economic and Social Policy

March 20, 2006

Arrest of a Canadian Pot Dealer

The U.S. Drug Enforcement Administration and Canadian police recently arrested Marc Emery, a Canadian, for selling marijuana to U.S. customers. Emery has for years operated one of the largest marijuana seed operations in Canada. The government there has mainly ignored him, since enforcing anti-marijuana laws is not a priority north of the border. U.S. officials view Emery as an impediment to enforcement of U.S. laws, however, so they arranged to arrest him in hopes of getting him extradited to the U.S.

This incident is just the latest foolishness in the U.S. war on drugs, which generates costs far in excess of any plausible benefits. Prohibition harms drug users by raising prices, reducing quality control, and imposing criminal penalties for drug use. Prohibition breeds corruption of police, prosecutors, and judges, both domestically and in countries like Colombia. Production generates violence between participants in the drug trade, who cannot resolve disputes using lawyers. Prohibition creates unwarranted restriction on the use of marijuana as medicine. Prohibition spreads HIV by encouraging the sharing of dirty needles. Prohibition restricts civil liberties and exacerbates racial tension. On top of all this, prohibition costs roughly $35 billion dollars per year along with the loss of about $15 billion in taxes not collected on drugs.

Prohibition probably does reduce drug use to some degree. The evidence, however, suggests only a modest impact. And to the extent the reduction corresponds to responsible use, this is a cost rather than a benefit of prohibition.

Reasonable people can disagree about whether governments should discourage the consumption of “risky” goods. In any case, however, prohibition is a terrible approach for achieving this goal. Moderate sin taxation accomplishes the same goal—reduced drug use—without generating a black market and the attendant negative effects. This is exactly what most societies do regarding alcohol and tobacco.

37 Comments:

At 9:16 PM, Blogger daksya said...

Did your report on budgetary implications of pot prohibition, have any tangible impact?

I think the deterrent effect of prohibition on drug use varies with the specific drug. Pot prevalence is probably 60-75% of its saturated level in a legalized environment. But I don't think the same applies to cocaine. Cocaine would be a more popular drug, say, 60-70 million users (past year tally). compared to 5-6 million now. Of course, lot depends on the shape legalization takes, especially its social marketing (in which I include advertising regulation)

 
At 5:27 AM, Blogger Mike Huben said...

Spot on, daksya.

While I agree that marijuana should be legalized, this post lumps all drugs under the rubric "prohibition": a propaganda technique similar to the way Bush justifies his Iraq war as part of the "War on Terrah".

And reasonable forms of legalization require government taxation and regulation of advertising, which are hardly hallmarks of small government or libertarianism.

 
At 6:06 AM, Blogger Jeffrey Alan Miron said...

The evidence in no way suggests that cocaine use would mushroom in the way suggested by daksay.

Alcohol Prohibition appears to have reduced alcohol consumption by only 25%.

Tobacco consumption in the U.S. has declined dramatically over the past 50 years, without prohibition.

And cocaine is readily availalbe already to anyone who wants it. So why would there be such a surge in use?

Even if there were a dramatic increase in use, moreover, why is this such a bad thing?

 
At 8:22 AM, Anonymous Rich Aucoin said...

"Sin" taxes are prohibition lite, and should therefore be opposed by libertarians.
Plus, the government revenue generated by sin taxes only exacerbates Big Government's havoc on society. For freedom's sake, we must find ways to reduce government's power, not ways to increase it. In short, we should legalize drugs, and NOT tax the hell out of them.

 
At 8:31 AM, Blogger Jeffrey Alan Miron said...

On which drugs to legalize:

The argument for marijuana only is understandable, and legalizing marijuana only would be a positive step.

But the arguments for legalization do not assume the substance in question is relatively benign. Prohibition creates a black market, with all the attendant negatives, for riskier substances as well. Thus, legalization of cocaine, say, would also reduce corruption and violence, save criminal justice resources, avoid disruption of other countries, and the like. Indeed, the harm being done from prohibition right now is more related to prohibition of drugs other than marijuana even though far more people use marijuana.

 
At 8:40 AM, Blogger Jeffrey Alan Miron said...

To Rich Aucoin:

Sin taxes that are too high (no pun intended) undoubtedly create black markets and are no better than prohibition. Agreed. But that is why I emphasized moderate sin taxes. We do not have black markets in alcohol or tobacco even though the sin taxes on these are substantial.

My post argued that sin taxation is better than prohibition, but it did not say sin taxation is better than just treating drug like all other commodities. On that question, my own hunch is that sin taxation is not especially desirable, although it does not do great harm either so long as it is moderate.

I would simply emphasize that sin taxation is a separate question. The crucial policy change regarding drugs is to bring the market above ground. Political realities being what they are, this is more likely to happen if there is moderate sin taxation. If the market becomes legal, then it would be fruitful to re-examine sin taxation not just for drugs but for alcohol, tobacco, and related goods.

 
At 11:18 AM, Blogger daksya said...

The evidence in no way suggests that cocaine use would mushroom in the way suggested by daksay.

Which evidence is that?

Few reasons, why use will increase a lot:

1)Alcohol was a historically known and culturally integrated commodity before Prohibition. Cocaine's use before its prohibition was limited.

2)'Just Say No' and its derivatives, seek to embed the message that all illegal drugs are dangerous, always. The street smarts of the population falls along a curve, and some see through the nonsense, but many don't. A lot of people take at face value the government's oppobrium. Heck, 33% of high school seniors think that smoking marijuana once a month carries great risk. The prohibition of cocaine, its reputation as a 'hard drug', in contrast to legal alcohol, reinforces 'Just Say No'. Although, as the British govt. report on my blog points out, alcohol and powder cocaine are in the same ballpark.

3)Cocaine is not 'readily available'. Alcohol is. Cocaine can be procured, if an uninitiate is bent on trying it. But you have to find a friend/source who can start the chain of acquisition. You might be worried that someone might tell your other friends, and worse, it might reach your family. All this is not a problem, only if you hang around in a circle, where drug use is normal within that circle. Given that 1% of the above-12 US population used cocaine in the last month and 2.5% in the last year, your odds of being in such a circle are pretty low.

4)The risk of arrest and other legal, social consequences is constantly latent in your mind. Alcohol possession wasn't illegal during Prohibition. Employers don't reject/fire applicants for alcohol, barring exceptional circumstances.

Prohibition is not just the legal aspect. It permeates into societal values and has ripple effects, in all spheres. Reformers treat the deterrent effect too leniently. At the risk of Godwinning this discussion, one only has to see the passive & even active cooperation that the German population provided to the Nazis. This (libertarian) notion, that the bulk of the population are self-reliant, self-assured proactive rational agents, is a joke.

 
At 1:10 PM, Anonymous Rich Aucoin said...

The bottom line is this:
All adult individuals possess the inalienable right to live their lives in whatever manner they choose - including living stupidly or dangerously - provided that they do not harm or threaten the person or property of others.

That said, I recommend avoiding dangerous drugs; I recommend using seat belts; I recommend eating healthy foods, etc. But all of these choices regarding YOUR body rightfully belong to YOU.

And when you make wise choices for yourself, YOU will deserve all the credit and benefits attendant in those choices, not Ted Kennedy or George Bush.

And when you make unwise choices, YOU will deserve all the blame and consequences of your actions, not your parents, not your friends, and not politicians.

 
At 9:47 PM, Anonymous Anonymous said...

Daksya,

According to http://www.whitehousedrugpolicy.gov/drugfact/cocaine/index.html

at least 34 million americans (<12 years old) have used Cocaine at least once. That is 14% of americans greater older than 12.

I think this is a clear indication that cocaine is far more readily available than your claim.

Also, supporting Naziism means a persons preferences are severely warped but says nothing about the rationality of the actor (both formal economic definition or popular defintion of rationality.)

 
At 10:48 PM, Blogger daksya said...

at least 34 million americans (<12 years old) have used Cocaine at least once.

That is lifetime use. If you used cocaine once in 1985 and are alive today, you get counted in that 34 million. 5.5 million Americans used cocaine in 2004. About a million used it in the month before the survey.

 
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