Vice Squad
Tuesday, March 02, 2004
Why Do We Have Drug Prohibition?

Recently I came across a paper by Jeffrey Miron (Department of Economics, Boston University) on the economic costs of drug abuse. Miron evaluates the cost-of-illness (COI) studies on the issue that estimate the cost of drug abuse in the US at over $140 billion. He points out, quite correctly, that these numbers say nothing about the advisability of drug prohibition in the US. To begin with, in order to evaluate a policy one needs to look at the alternatives, and the COI studies do no such thing. Moreover, much, if not most, of the costs that these studies attribute to drug abuse are actually the costs of drug prohibition. For example, the COI estimates include the loss of productivity due to incarceration for drug-related crimes, including drug possession. Surely, this is not a cost of drug abuse per se. Another big chunk of the COI estimates constitute private costs rather than the costs external to drug users. An example of such private costs would be the medical costs paid for from private funds and the loss of personal income. In a market economy, we generally do not view behavior that results in private costs as worthy of public policy intervention. We let individuals balance the costs and benefits of their actions, as long as they do not affect the welfare of others. While this approach may not always work well in the case of highly addictive substances, we use it even with alcohol and tobacco products. There are other serious methodological problems with the COI studies as well. Miron concludes that “at least $93.1 billion should be entirely eliminated from the economic cost of drug abuse, and [the rest] should be at least partially eliminated.” (p.9) In addition, prohibition itself imposes great costs that are not mentioned at all in the COI studies, even under the wrong headings, such as the erosion of our civil liberties and the due process the forgone potential medicinal benefits of some of the drugs, and so on. I would add that significant costs are imposed on the innocent people who are being searched and otherwise hassled by the police on the suspicion of drug-related activities, and the effort spent by the actual drug dealers and users on avoiding apprehension or any encounter with the police for that matter. I did not see these costs mentioned even in Miron’s paper.

The huge costs of the drug prohibition policy do not seem to be significantly offset by the plausible decrease in the consumption of drugs. Without going into the details, let me just mention that, according to Miron, the existing studies “suggest a relatively modest effect of prohibition on drug consumption.” (p.18)

To summarize, the costs of drug prohibition policy are large and most of them are quite certain, while the benefits appear to be modest and are difficult to quantify.

Miron stresses that his paper does conclude anything about the desirability of drug prohibition, but the implication is fairly strong and obvious, at least to me, that drug prohibition policy is greatly inferior to some form of partial or even complete legalization.

The question that I think is much more difficult to answer though is why do we still have drug prohibition? Is there a huge popular support for this policy? If yes, why? If no, what are the political coalitions that impose drug prohibition on the rest of us? I don’t have the answers although I imagine the degree of popular support for drug prohibition is more or less well known, and it is probably substantial. If that is indeed the case, I am still at a loss as to why such support exists and why a rational policy debate on the issue seems to be confined to the academic circles. Maybe I can't figure it out because it's getting late. "Morning is smarter than evening," as a Russian saying goes. Maybe I''ll have an answer tomorrow, but don't count on it.

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