Can We End the War on Drugs Without Repealing Prohibition?


London School of Economics

As Matthew Feeney noted this morning, a new report from the London School of Economics (LSE) criticizes "a militarised and enforcement-led global 'war on drugs' strategy" that "has produced enormous negative outcomes and collateral damage." The people who signed onto the call for reform in the report's foreword include five Nobel-winning economists as well as statesmen such as former U.S. Secretary of State George Shultz (also an economist, and a longtime critic of the war on drugs), former Polish President Aleksander Kwasniewski, and former E.U. foreign policy chief Javier Solana. Like the 2011 report from the self-appointed Global Commission on Drug Policy, the LSE report is encouraging as an indicator of opposition to the status quo. But while the new report is much more substantive, offering detailed analyses from leading drug policy experts, it suffers from a similar timidity. 

Although the LSE report is titled Ending the Drug Wars, that is not what it actually recommends. Rather than condemning the use of force to stop people from consuming arbitrarily proscribed intoxicants, the report calls for a more judicious use of force, based on more realistic goals, coupled with more drug treatment, a greater emphasis on harm reduction, and tolerance of "global policy pluralism," possibly including experiments with various forms of marijuana legalization. This vision amounts to a decided improvement on current policy, but it would be more accurately described as a de-escalation than "an end to the 'war on drugs,'" as the LSE's press release calls it.

John Collins, coordinator of the LSE's International Drug Policy Project, leads off with a chapter that explains how international cooperation in this area came to be dominated by "a moralistic and supply-centric vision" that left little room for experimentation with other approaches. "The system was built largely upon the assumption that by controlling supply it could control and eventually eradicate 'non-medical and non-scientific' use of drugs," Collins writes. Hence the 1998 attempt "to reinvigorate international efforts by embarking on ambitious targets for demand and supply reduction under the slogan 'a drug-free world, we can do it!'"

Such efforts are doomed, Collins explains, by the economics of prohibition. Attacks on supply may temporarily raise retail prices, but "in a footloose industry like illicit drugs, these price increases incentivise a new rise in supply, via shifting commodity supply chains. This then feeds back into lower prices and an eventual return to a market equilibrium similar to that which existed prior to the supply-reduction intervention." (University of Maryland criminologist Peter Reuter considers evidence of such adaptation in a subsequent chapter on the "balloon effect hypothesis.") "Decades of evidence conclusively show that the supply and demand for illicit drugs are not something that can be eradicated," observes Collins, who recommends "a more rational and humble approach to supply-centric policies."

What would that entail? "If prohibition is to be pursued as a means to suppress the supply of certain drugs deemed incompatible with societal well-being," Collins says, "care must be taken to ensure that enforcement is resourced only up to the point of drastically raising marginal prices to the point where consumption is measurably reduced. After this, additional spending is wasteful and likely damaging." He also cites "a clearly emerging academic consensus that moving towards the decriminalisation of personal consumption, along with the effective provision of health and social services, is a far more effective way to manage drugs and prevent the highly negative consequences associated with criminalisation of people who use drugs."

In the second chapter, Jonathan Caulkins, a professor of public policy at Carnegie Mellon, argues that the war on drugs may not be a failure after all (at least when it comes to "final market" countries such as the U.S.; in another chapter, Daniel Mejia, director of Colombia's Research Center on Drugs and Security, and Pascual Restrepo, a graduate student in economics at MIT, argue that "prohibitionist drug policies are a transfer of the costs of the drug problem from consumer to producer and transit countries," where they result in violence, corruption, and instability). Caulkins agrees that the goal of eradicating the illicit drug trade is "not realistic"; instead, he says, the aim should be to "drive the activity underground while controlling collateral damage created by the markets."

Although prohibition cannot eliminate drug abuse, Caullkins says, it can discourage consumption. Based on that more modest goal, he claims, "plausible" analyses suggest that the benefits of prohibition outweigh the costs even in the United States, which has enforced prohibition in "a particularly pigheaded way," oblivious to diminishing returns. While "prohibition is extraordinarily expensive on multiple dimensions," he says, so is drug abuse, so it's possible that the net impact of the war on drugs is positive.

To illustrate that possibility, Caulkins engages in some half-serious cost-benefit analysis that involves prohibition premiums, demand elasticities, drug use survey data, and quality-adjusted life-years (QALYs). He suggests a scenario in which legalization doubles cannabis dependence while tripling dependence on cocaine, heroin, and cocaine. If you assign a value of $100,000 to each QUALY and assume a "QALY loss per case" of 0.1 for cannabis and 0.2 for the other drugs, Caulkins says, you can show that "prohibition may prevent enough drug dependence to warrant spending as much as $112 billion per year, well in excess of the roughly $50 billion per year now spent on drug control." Even if you throw in $25 billion for the QALY losses of "almost 500,000 drug law violators behind bars" (a subject that Columbia epidemiologist Ernest Drucker considers in his chapter on mass incarceration), prohibition still looks like a bargain, Caulkins says—provided you ignore every other cost associated with the war on drugs, including several that are difficult or impossible to quantify. (Alejandro Madrazo Lajous, a professor of legal studies at the Mexican research center CIDE, discusses some of those hard-to-calculate costs in a chapter about the impact of the drug war on civil liberties in Mexico, Colombia, and the U.S.)

Caulkins admits that his calculation "is extremely rough," although "it has the virtue of being parsimonious." He emphasizes that "the purpose of this calculation is certainly not to argue that prohibition offers a net benefit of $112 billion - $50 billion = $62 billion," since "for many reasons it is not possible to make such a calculation." He explains that "there is enormous uncertainty surrounding every component of the calculations, and intelligent people can disagree about what value to place on averting a year of dependence vs. a year of incarceration." (In their chapter on marijuana legalization, UCLA public policy professor Mark Kleiman and Jeremy Ziskind, an analyst at BOTEC, Kleiman's consulting firm, make a similar point: "It is possible to imagine doing an elaborate cost-benefit analysis of legalising cannabis, but doing so in practice would require one to predict the extent of changes in variables that cannot even be accurately measured in the present, and to perform implausible feats of relative valuation.") The main impression left by Caulkins' discussion is that you can make calculations like this demonstrate anything you want about prohibition, depending on which costs and benefits you decide to include, the way you measure them, and the weights you assign to them.

As Caulkins notes, these decisions are unavoidably influenced by value judgments. For someone who rejects coercive paternalism on moral grounds, no amount of drug abuse prevention can justify forcibly preventing people from engaging in pleasurable activities that harm no one, exposing undeterred drug users to the hazards associated with prohibition, or arresting and imprisoning people for engaging in peaceful, consensual transactions. These burdens are analogous to the costs borne by source and transit countries, since they are imposed on people who do not benefit from them even under paternalistic assumptions.

While the LSE report mentions "human rights" a few dozen times, it emphasizes abuses that occur as side effects of prohibition, as opposed to the violations of liberty inherent in trying to dictate which substances people may put into their bodies. It suggests that criminal penalties for drug users are unfair, or at least misguided, but does not question the justice or wisdom of punishing their suppliers. In the introduction, Collins claims "this report sets out a roadmap for finally ending the drug wars." Yet instead of challenging the moral premises underlying the war on drugs, it ends up advocating what Caulkins calls "a kinder, gentler prohibition."