Highlights
The U.S. government spends more than $33 billion and arrests 1.5 million people annually to enforce drug prohibition—a federal policy that has been in effect for almost eighty years. More than 318,000 people are currently behind bars for breaking U.S. drug laws—more than the total number of people incarcerated for all crimes in the United Kingdom, France, Germany, Italy, and Spain combined.
Drug law enforcement in the United States is severe enough to impact the lives of millions, but it is ineffective at reducing drug consumption. Although there are more than 1.2 million possession arrests each year, there are more than 28 million drug users, and most users purchase drugs on multiple occasions. Many arrests for possession occur because the arrestee violated some other law—prostitution, theft, speeding, loitering, disorderly conduct, and so on—and was found to possess drugs. (p. 11)
Although prohibition raises some costs of supplying drugs, it lowers other costs. Drug suppliers, for example, do not pay income taxes or Social Security taxes, nor need they obey minimum wage laws or other labor regulations. As a result, prohibition does not appear to raise the price of drugs or reduce consumption as much as is commonly thought.
Don’t the large “price markups” of illegal drugs mean that drug prohibition raises prices (and thus discourages use)? Not necessarily. Coffee, chocolate, tea, and beer have markups similar to (or larger than) cocaine and heroin. The large “markup” between raw materials and the street-ready heroin and cocaine, therefore, is unlikely to be attributable to prohibition. (p. 36-37)
Isn’t the rise of drug prices at least partly due to prohibition? The premise of this question is false. Adjusting for inflation and drug purity, drug prices have generally declined over the past two decades. Cocaine’s price fell in real terms from $450 per pure gram in 1981 to about $100 by 1996.
Alcohol prohibition also did not greatly reduce alcohol consumption. Deaths from liver cirrhosis (a proxy for alcohol consumption) fell by a modest 10 to 20 percent. Alcohol consumption probably fell by a similarly modest amount. (p. 26)
There is a strong correlation between the violent crime rate and drug law enforcement: when drug prohibition increases so does the homicide rate. Similarly, countries with greater enforcement of their drug laws have more violent crime. Eliminating drug prohibition would likely cut the homicide rate in the United States by 25–75 percent. (p. 51)
Although virtually all countries have drug prohibition laws similar to those of the United States; the degree of enforcement differs substantially. Using drug seizures by the police and customs agents as a measure of prohibition enforcement, the evidence consistently supports the hypothesis that prohibition enforcement increases the violent crime rate. (p. 54)
Drug use produces far smaller spillover costs to society than is often suggested. But even if the costs were large, public policy should weigh those costs against prohibition’s considerable costs: 1) the loss of utility to drug users whose consumption imposes no social costs, 2) the direct cost of enforcing prohibition, and 3) the indirect costs of prohibition, such as increased violent crime.
Drug legalization would greatly reduce crime and increase drug use probably only modestly, mainly by casual consumers. (Marijuana decriminalization has not result in increased marijuana use.) Merely decriminalizing drugs would not eliminate a black market and violent crime. Reduced violence in jurisdictions that have decriminalized marijuana, for example, is due to reduced enforcement, not simply reduced penalties for users possessing small quantities. (p. 78)
--------------------------------------------------------------------------------
Synopsis
Many people believe that the huge cost of drug prohibition is an acceptable price to pay for its purported benefits—reduced drug use and associated health problems, fewer traffic and industrial accidents, and less crime and poverty.
According to economist Jeffrey A. Miron, however, most of the ills typically attributed to drug consumption are due not to drugs per se but to drug prohibition. In Drug War Crimes: The Consequences of Prohibition, Miron shows that prohibition increases violence, creates new health risks for drug users, enriches criminals, and diminishing our civil liberties. Prohibition, he forcefully argues, is a poor method of reducing drug use and an inappropriate goal for government policy.
The Economics of Drug Prohibition
Drug War Crimes begins by showing that the standard economic analysis of drug prohibition is flawed. Prohibition does not necessarily induce a large reduction in drug consumption; it may even contribute to drug use. Moreover, prohibition may increase crime rather than decrease crime, and diminish health and productivity rather than enhance them. Even if prohibition substantially reduces drug use, it creates numerous undesirable consequences such as corruption, infringements on civil liberties, wealth transfers to criminals, unwarranted restrictions on medicinal uses of drugs, and rebellion in drug-producing countries.
Miron ’s economic analysis of prohibition then shows that two issues are central to an ethical examination of prohibition. The first is whether prohibition has a large or small effect on drug consumption. If the prohibition does not reduce drug consumption by much, then any benefits that might result from reduced consumption are also small. This would imply that the costs of prohibition almost certainly exceed the benefits.
The second issue is whether prohibition increases or decreases crime. If prohibition increases rather than decreases crime, then prohibition may be counterproductive even if it reduces drugs substantially. Prohibition’s effect on consumption and crime thus deserve special attention.
Does Prohibition Reduce Consumption?
Although not identical to current drug prohibition in structure or enforcement, America’s experience with alcohol prohibition provides a natural “laboratory” for studying the effects of drug prohibition on drug consumption. Debates over prohibition routinely cite this episode as supporting one side or the other, but previous studies have not controlled adequately for factors other than prohibition that might have influenced cirrhosis (a proxy for alcohol consumption). Miron’s analysis indicates that alcohol prohibition had a modest effect on alcohol consumption, which implies that drug prohibition has a modest effect on drug use. Miron cites evidence from a variety of sources suggesting the same conclusion.
Does Prohibition Reduce Violence?
Advocates of prohibition claim that drug use causes violent behavior, while its critics claim that prohibition generates violence by forcing drug markets underground. These claims are not mutually exclusive, but it is important to determine which effect tends to predominate. Miron begins his analysis of these competing claims by examining U.S. homicide rates over the past century. The evidence that alcohol prohibition modestly reduced alcohol consumption suggests that drug prohibition has a modest impact in reducing violence, but this evidence is not by itself decisive; other issues have much bearing.
Both drug and alcohol prohibition, Miron shows, coincided with increases in the homicide rate, consistent with the view that under prohibition people settle their disputes by substituting guns for lawyers. Miron also examines the relation between prohibition and violence across countries. Again, the evidence indicates that vigorous enforcement of prohibition is associated with higher, rather than lower, rates of violence, contrary to the standard defenses of prohibition. And a broad range of other evidence is consistent with this conclusion.
Should Policy Attempt to Reduce Drug Consumption?
Next, Drug War Crimes turns to the question of whether prohibition is desirable. Setting aside any reduction in drug consumption achieved by prohibition, virtually all of prohibition’s effects are undesirable. The question for policy analysis is therefore whether these negative consequences are worth paying in exchange for whatever reduction in drug consumption prohibition achieves.
Miron addresses this issue by first asking whether reduced drug consumption is an appropriate goal for government policy. (This assumption that it is, does not follow from standard economic principles.) Reduced drug consumption might be an appropriate goal if drug consumption generates large negative externalities or if consumer choices about drug consumption are myopic, but the evidence shows that externalities from drugs, and myopia with respect to drugs, are both modest relative to exaggerated fear stories promulgated by prohibitionists. [Again, he needs to present evidence, not simply assert that evidence exists.] Moreover, neither externalities nor myopia related to drugs are obviously different from those of many legal goods. In any case, policies to reduce drug consumption make sense only if their benefits exceed their costs. Since prohibition has substantial enforcement costs and itself generates externalities, prohibition is a poor choice for reducing drug consumption.
Alternatives to Prohibition
If prohibition is not the right policy, then what is? Drug War Crimes argues that modifications of current prohibition, such as diminished enforcement, decriminalization, medicalization, or legalization of marijuana only, are moves in a beneficial direction, but they are inferior to a regime in which drugs are legal. Within a legal regime, policies such as subsidized treatment, needle exchanges, public health campaigns, age restrictions, or limits on advertising might have desirable effects, but these policies also have negative consequences that can outweigh any positives.
Conclusion
“It is, of course, true that some people ruin their lives with drugs,” writes Miron. “The right question for policy analysis, however, is not whether drugs are sometimes misused but whether policy reduces that misuse, and at what cost. The best available evidence shows that prohibition reduces drug use only modestly, and most of this reduction is for casual users rather than ‘addicts.’ It is hard to see, therefore, how any benefits from prohibition could possibly outweigh its incredible costs.
“Under legalization, there would still be problems related to drugs. Specifically, a small fraction of users would harm themselves and occasionally others, as occurs now for a range of legal goods. Most users, however, would obtain benefits that exceeded any costs, and the enormous externalities imposed by prohibition would disappear.
“Critics will claim these conclusions rest on research that is subject to a broad range of caveats: data problems, reverse causation, and the like. This claim is accurate—none of the arguments here ‘prove’ that legalization is better than prohibition. Nevertheless, the arguments and data mustered for legalization are of far greater quality and objectivity than any brought to bear for prohibition. A critical question, therefore, is which side bears the burden of proof?
“As a practical matter, inertia and other political forces mean legalizers now bear that burden. Yet there is no reason to give prohibition the benefit of the doubt. American tradition should make legalization—i.e., liberty—the preferred policy, barring compelling evidence prohibition generates benefits in excess of its costs. As I have demonstrated here, a serious weighing of the evidence shows instead that prohibition has enormous costs with, at best, modest and speculative benefits. Liberty and utility thus both recommend that prohibition end now: the goals of prohibition are questionable, the methods unsound, and the results are deadly.”
--------------------------------------------------------------------------------
About the Author
Jeffrey A. Miron is professor of economics at Boston University. His articles on drug policy have appeared in Social Research, Journal of Law and Economics, The Boston Globe, and the London Observer. He received his Ph.D. in economics from the Massachusetts Institute of Technology.
--------------------------------------------------------------------------------
Product Details
$15.95 (paperback) • 107 pages • 8 Figures, 4 Tables • Index • 6 x 9 Inches ISBN 0-945999-90-9
--------------------------------------------------------------------------------
Jeffrey A. Miron is Professor of Economics at Harvard University. He received a B.A., magna cum laude, from Swarthmore College and Ph.D. in economics from M.I.T. He has been a Research Fellow for the National Bureau of Economic Research; Associate Professor of Economics, University of Michigan; Associate Editor, Journal of Money, Credit and Banking; President, Bastiat Institute; Visiting Scholar, Institut d’Economie Industrielle, Université des Sciences Sociales; Professor of Economics, Boston University; and Visiting Professor of Economics, Sloan School of Management, Massachusetts Institute of Technology. From 1992-1998, he was chairman of the Department of Economics at Boston University.
A contributor to many scholarly volumes, Professor Miron is author of the books, Drug War Crimes: The Consequences of Prohibition, The Economics of Seasonal Cycles and Casebook for Macroeconomics. He has published more than 25 scholarly articles in refereed journals and his many popular articles have appeared in such publications as the Boston Business Journal, Boston Globe, Boston Herald, Columbia Daily Tribune, Economic Times, London Observer, Massachusetts News, Orange County Register, and San Diego Union-Tribune.
http://www.independent.org/publications/books/book_summary.asp?bookID=13
The U.S. government spends more than $33 billion and arrests 1.5 million people annually to enforce drug prohibition—a federal policy that has been in effect for almost eighty years. More than 318,000 people are currently behind bars for breaking U.S. drug laws—more than the total number of people incarcerated for all crimes in the United Kingdom, France, Germany, Italy, and Spain combined.
Drug law enforcement in the United States is severe enough to impact the lives of millions, but it is ineffective at reducing drug consumption. Although there are more than 1.2 million possession arrests each year, there are more than 28 million drug users, and most users purchase drugs on multiple occasions. Many arrests for possession occur because the arrestee violated some other law—prostitution, theft, speeding, loitering, disorderly conduct, and so on—and was found to possess drugs. (p. 11)
Although prohibition raises some costs of supplying drugs, it lowers other costs. Drug suppliers, for example, do not pay income taxes or Social Security taxes, nor need they obey minimum wage laws or other labor regulations. As a result, prohibition does not appear to raise the price of drugs or reduce consumption as much as is commonly thought.
Don’t the large “price markups” of illegal drugs mean that drug prohibition raises prices (and thus discourages use)? Not necessarily. Coffee, chocolate, tea, and beer have markups similar to (or larger than) cocaine and heroin. The large “markup” between raw materials and the street-ready heroin and cocaine, therefore, is unlikely to be attributable to prohibition. (p. 36-37)
Isn’t the rise of drug prices at least partly due to prohibition? The premise of this question is false. Adjusting for inflation and drug purity, drug prices have generally declined over the past two decades. Cocaine’s price fell in real terms from $450 per pure gram in 1981 to about $100 by 1996.
Alcohol prohibition also did not greatly reduce alcohol consumption. Deaths from liver cirrhosis (a proxy for alcohol consumption) fell by a modest 10 to 20 percent. Alcohol consumption probably fell by a similarly modest amount. (p. 26)
There is a strong correlation between the violent crime rate and drug law enforcement: when drug prohibition increases so does the homicide rate. Similarly, countries with greater enforcement of their drug laws have more violent crime. Eliminating drug prohibition would likely cut the homicide rate in the United States by 25–75 percent. (p. 51)
Although virtually all countries have drug prohibition laws similar to those of the United States; the degree of enforcement differs substantially. Using drug seizures by the police and customs agents as a measure of prohibition enforcement, the evidence consistently supports the hypothesis that prohibition enforcement increases the violent crime rate. (p. 54)
Drug use produces far smaller spillover costs to society than is often suggested. But even if the costs were large, public policy should weigh those costs against prohibition’s considerable costs: 1) the loss of utility to drug users whose consumption imposes no social costs, 2) the direct cost of enforcing prohibition, and 3) the indirect costs of prohibition, such as increased violent crime.
Drug legalization would greatly reduce crime and increase drug use probably only modestly, mainly by casual consumers. (Marijuana decriminalization has not result in increased marijuana use.) Merely decriminalizing drugs would not eliminate a black market and violent crime. Reduced violence in jurisdictions that have decriminalized marijuana, for example, is due to reduced enforcement, not simply reduced penalties for users possessing small quantities. (p. 78)
--------------------------------------------------------------------------------
Synopsis
Many people believe that the huge cost of drug prohibition is an acceptable price to pay for its purported benefits—reduced drug use and associated health problems, fewer traffic and industrial accidents, and less crime and poverty.
According to economist Jeffrey A. Miron, however, most of the ills typically attributed to drug consumption are due not to drugs per se but to drug prohibition. In Drug War Crimes: The Consequences of Prohibition, Miron shows that prohibition increases violence, creates new health risks for drug users, enriches criminals, and diminishing our civil liberties. Prohibition, he forcefully argues, is a poor method of reducing drug use and an inappropriate goal for government policy.
The Economics of Drug Prohibition
Drug War Crimes begins by showing that the standard economic analysis of drug prohibition is flawed. Prohibition does not necessarily induce a large reduction in drug consumption; it may even contribute to drug use. Moreover, prohibition may increase crime rather than decrease crime, and diminish health and productivity rather than enhance them. Even if prohibition substantially reduces drug use, it creates numerous undesirable consequences such as corruption, infringements on civil liberties, wealth transfers to criminals, unwarranted restrictions on medicinal uses of drugs, and rebellion in drug-producing countries.
Miron ’s economic analysis of prohibition then shows that two issues are central to an ethical examination of prohibition. The first is whether prohibition has a large or small effect on drug consumption. If the prohibition does not reduce drug consumption by much, then any benefits that might result from reduced consumption are also small. This would imply that the costs of prohibition almost certainly exceed the benefits.
The second issue is whether prohibition increases or decreases crime. If prohibition increases rather than decreases crime, then prohibition may be counterproductive even if it reduces drugs substantially. Prohibition’s effect on consumption and crime thus deserve special attention.
Does Prohibition Reduce Consumption?
Although not identical to current drug prohibition in structure or enforcement, America’s experience with alcohol prohibition provides a natural “laboratory” for studying the effects of drug prohibition on drug consumption. Debates over prohibition routinely cite this episode as supporting one side or the other, but previous studies have not controlled adequately for factors other than prohibition that might have influenced cirrhosis (a proxy for alcohol consumption). Miron’s analysis indicates that alcohol prohibition had a modest effect on alcohol consumption, which implies that drug prohibition has a modest effect on drug use. Miron cites evidence from a variety of sources suggesting the same conclusion.
Does Prohibition Reduce Violence?
Advocates of prohibition claim that drug use causes violent behavior, while its critics claim that prohibition generates violence by forcing drug markets underground. These claims are not mutually exclusive, but it is important to determine which effect tends to predominate. Miron begins his analysis of these competing claims by examining U.S. homicide rates over the past century. The evidence that alcohol prohibition modestly reduced alcohol consumption suggests that drug prohibition has a modest impact in reducing violence, but this evidence is not by itself decisive; other issues have much bearing.
Both drug and alcohol prohibition, Miron shows, coincided with increases in the homicide rate, consistent with the view that under prohibition people settle their disputes by substituting guns for lawyers. Miron also examines the relation between prohibition and violence across countries. Again, the evidence indicates that vigorous enforcement of prohibition is associated with higher, rather than lower, rates of violence, contrary to the standard defenses of prohibition. And a broad range of other evidence is consistent with this conclusion.
Should Policy Attempt to Reduce Drug Consumption?
Next, Drug War Crimes turns to the question of whether prohibition is desirable. Setting aside any reduction in drug consumption achieved by prohibition, virtually all of prohibition’s effects are undesirable. The question for policy analysis is therefore whether these negative consequences are worth paying in exchange for whatever reduction in drug consumption prohibition achieves.
Miron addresses this issue by first asking whether reduced drug consumption is an appropriate goal for government policy. (This assumption that it is, does not follow from standard economic principles.) Reduced drug consumption might be an appropriate goal if drug consumption generates large negative externalities or if consumer choices about drug consumption are myopic, but the evidence shows that externalities from drugs, and myopia with respect to drugs, are both modest relative to exaggerated fear stories promulgated by prohibitionists. [Again, he needs to present evidence, not simply assert that evidence exists.] Moreover, neither externalities nor myopia related to drugs are obviously different from those of many legal goods. In any case, policies to reduce drug consumption make sense only if their benefits exceed their costs. Since prohibition has substantial enforcement costs and itself generates externalities, prohibition is a poor choice for reducing drug consumption.
Alternatives to Prohibition
If prohibition is not the right policy, then what is? Drug War Crimes argues that modifications of current prohibition, such as diminished enforcement, decriminalization, medicalization, or legalization of marijuana only, are moves in a beneficial direction, but they are inferior to a regime in which drugs are legal. Within a legal regime, policies such as subsidized treatment, needle exchanges, public health campaigns, age restrictions, or limits on advertising might have desirable effects, but these policies also have negative consequences that can outweigh any positives.
Conclusion
“It is, of course, true that some people ruin their lives with drugs,” writes Miron. “The right question for policy analysis, however, is not whether drugs are sometimes misused but whether policy reduces that misuse, and at what cost. The best available evidence shows that prohibition reduces drug use only modestly, and most of this reduction is for casual users rather than ‘addicts.’ It is hard to see, therefore, how any benefits from prohibition could possibly outweigh its incredible costs.
“Under legalization, there would still be problems related to drugs. Specifically, a small fraction of users would harm themselves and occasionally others, as occurs now for a range of legal goods. Most users, however, would obtain benefits that exceeded any costs, and the enormous externalities imposed by prohibition would disappear.
“Critics will claim these conclusions rest on research that is subject to a broad range of caveats: data problems, reverse causation, and the like. This claim is accurate—none of the arguments here ‘prove’ that legalization is better than prohibition. Nevertheless, the arguments and data mustered for legalization are of far greater quality and objectivity than any brought to bear for prohibition. A critical question, therefore, is which side bears the burden of proof?
“As a practical matter, inertia and other political forces mean legalizers now bear that burden. Yet there is no reason to give prohibition the benefit of the doubt. American tradition should make legalization—i.e., liberty—the preferred policy, barring compelling evidence prohibition generates benefits in excess of its costs. As I have demonstrated here, a serious weighing of the evidence shows instead that prohibition has enormous costs with, at best, modest and speculative benefits. Liberty and utility thus both recommend that prohibition end now: the goals of prohibition are questionable, the methods unsound, and the results are deadly.”
--------------------------------------------------------------------------------
About the Author
Jeffrey A. Miron is professor of economics at Boston University. His articles on drug policy have appeared in Social Research, Journal of Law and Economics, The Boston Globe, and the London Observer. He received his Ph.D. in economics from the Massachusetts Institute of Technology.
--------------------------------------------------------------------------------
Product Details
$15.95 (paperback) • 107 pages • 8 Figures, 4 Tables • Index • 6 x 9 Inches ISBN 0-945999-90-9
--------------------------------------------------------------------------------
Jeffrey A. Miron is Professor of Economics at Harvard University. He received a B.A., magna cum laude, from Swarthmore College and Ph.D. in economics from M.I.T. He has been a Research Fellow for the National Bureau of Economic Research; Associate Professor of Economics, University of Michigan; Associate Editor, Journal of Money, Credit and Banking; President, Bastiat Institute; Visiting Scholar, Institut d’Economie Industrielle, Université des Sciences Sociales; Professor of Economics, Boston University; and Visiting Professor of Economics, Sloan School of Management, Massachusetts Institute of Technology. From 1992-1998, he was chairman of the Department of Economics at Boston University.
A contributor to many scholarly volumes, Professor Miron is author of the books, Drug War Crimes: The Consequences of Prohibition, The Economics of Seasonal Cycles and Casebook for Macroeconomics. He has published more than 25 scholarly articles in refereed journals and his many popular articles have appeared in such publications as the Boston Business Journal, Boston Globe, Boston Herald, Columbia Daily Tribune, Economic Times, London Observer, Massachusetts News, Orange County Register, and San Diego Union-Tribune.
http://www.independent.org/publications/books/book_summary.asp?bookID=13
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