How to Profit by Expanding Freedom

The case for drug legalization

Spending huge sums of money and getting no results to justify the expense: That's the relentless, and accurate, Republican critique of President Barack Obama's efforts to revive the U.S. economy. But it also describes a policy staunchly supported by Republicans as well as Democrats decade after decade: the war on drugs.

When the government lays out hundreds of billions to keep unemployment from rising above 8 percent, only to see it hit 10 percent, the obvious implication is that the policy didn't work. But when the government lays out tens of billions to reduce illicit drug use and finds that it has increased, the obvious implication is one that eludes almost every politician in America.

A few weeks ago, the federal Substance Abuse and Mental Health Services Administration (SAMHSA) published the latest chapter in a long-running horror tale. In 2009, it found, nearly 22 million Americans used illegal drugs—a 9 percent increase from the previous year and the highest rate since the survey began in 2002.

That happened even though federal, state, and local authorities have been expanding enforcement efforts against drugs. Since 1981, Washington has gone from spending $1.5 billion a year to spending $17 billion a year.

How does the administration explain the jump in illegal activity? You guessed it: Our policies are way too permissive. Commenting on the rise in marijuana use, Gil Kerlikowske, head of the White House's Office of National Drug Control Policy, insisted that "all of the attention and the focus of calling marijuana medicine has sent the absolute wrong message to our young people."

What message does he mean? Presumably, that cannabis is not as destructive as commonly portrayed by ONDCP and others. What makes the message particularly troublesome is that it happens to be true. Marijuana is not entirely without risks, but compared to such legal alternatives as tobacco and alcohol, it's an alley cat among mountain lions.

The government has been using police and prisons to convey the opposite message, with pitiful results, for a long time. Each year, nearly 1.7 million people are arrested for drug violations, of which 758,000 are for mere possession of cannabis. About half a million people are serving time in prison for drug offenses.

But these harsh policies don't seem to inhibit growers, dealers, and buyers. They persist in finding ways to do business no matter what. The Vancouver-based International Centre for Science in Drug Policy points out that over the past 20 years, weed in the United States has gotten 58 percent cheaper, in inflation-adjusted terms.

Falling prices indicate the stuff is getting more abundant and available, notwithstanding all the cops collaring stoners. The vast majority of high school kids say pot is easy to get.

You might assume that more lenient policies would guarantee an epidemic of drug use. In fact, the Netherlands, which has all but legalized weed, has fewer potheads than we do, particularly among young people.

"Globally, drug use … is not simply related to drug policy, since countries with stringent user-level illegal drug policies did not have lower levels of use than countries with liberal ones," concluded the World Health Organization.

None of this is new, but it has fresh relevance because of budgetary pressures that have forced citizens to ask what on earth the drug war is accomplishing. Californians, whose state government is in a bottomless fiscal hole, will vote next month on an initiative to legalize cannabis. One big selling point is that it could yield a $1.4 billion windfall to state coffers.

What is true for the Golden State is true for the other 49. In a new study for the libertarian Cato Institute in Washington, Harvard economist Jeffrey Miron and research associate Katherine Waldock estimate that, nationally, legalizing and taxing marijuana would save $8.7 billion in enforcement costs and harvest $8.7 billion in revenue.

Instead of lavishing money arresting and incarcerating recreational drug users, the drug users would provide funds for the rest of us. Most of them would be more than happy to do so in exchange for the freedom to indulge their habits. And the evidence suggests that we would not even see an increase in drug use.

Substance abuse is known to impair clear thinking and good judgment. But it's the people pushing harsh drug laws who seem to be lost in a fog.

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