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Week of 17 September 2004 · Vol. VIII, No. 3

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Legalize it: new book argues for drug-law reform

By Jessica Ullian

Jeffrey A. Miron argues that prohibiting drugs causes more problems than legalizing them. Photo courtesy of the Independent Institute


Jeffrey A. Miron argues that prohibiting drugs causes more problems than legalizing them. Photo courtesy of the Independent Institute

In the long-standing argument over whether certain drugs should be legalized, legislators and law-enforcement officials have formulated their stance on moral, ethical, and political grounds. Economist Jeffrey A. Miron has focused on another component of the discussion: the economics of legalization.

Miron, a CAS economics professor, is the author of Drug War Crimes: The Consequences of Prohibition, published by the Independent Institute earlier this year. The book analyzes the costs of maintaining the U.S. “war on drugs” in conjunction with the financial and social effects of prohibition, or drug criminalization. His conclusion: legalize drugs and bring them into the free market.

“My own particular first choice would be that it’s treated like any other commodity,” he says. “Toothpaste, toaster ovens, Ben & Jerry’s ice cream, whatever.”

Notwithstanding the differences between marijuana and Cherry Garcia, Drug War Crimes doesn’t deal in the morality of drug use. Instead, Miron weighs the efficacy of prohibition against its costs, effects, and unintended consequences to determine whether the war on drugs is actually worth fighting.

“One of the critical questions is whether, or to what degree, prohibition actually reduces the use of a commodity that you’re prohibiting,” Miron says. “The standard assumption behind prohibition is that if you prohibit it, people won’t do it. That’s obviously not quite right.”

Since a demand for illegal drugs exists, Miron argues in the book, prohibition does not actually eliminate the market; it merely forces it underground. The resulting black-market operation, lacking regulatory agencies or quality control, breeds additional crime and violence, since “business” disputes are resolved without the police or lawyers. The government then has to devote additional resources — $35 billion annually — to stopping drug-related crime and prosecuting drug-related offenses, Miron says.

Conversely, he argues, if drugs were sold legally, the violent crimes perpetuated by the black-market model would decrease, lowering the government’s drug-related expenses. Quality regulations would likely reduce the deaths that result from contaminated substances. And a “sin tax” applied to drug sales could mean an additional $5 billion to $10 billion for the government in added tax revenue, for a net savings of $45 billion.

The work is “sort of a breakthrough” in the study of criminal justice and drug-related violence, says David Theroux, president of the Independent Institute, the Oakland, Calif.–based nonpartisan think tank that encouraged Miron to compile his research into Drug War Crimes. “It really shows a direct relationship between enforcement of the drug laws pertaining to illicit drugs and homicide rates and so forth,” he says. “It’s a significant advance, and our interest was to pull that work together, and then pull it into a single volume.”

Laurence Kotlikoff, the chairman of the CAS economics department, adds that Miron “is one of the most knowledgeable economists in the world on this particular issue” and that his conclusions “are worth taking very seriously.”

“The issue of drugs raises lots of economic and noneconomic issues,” Kotlikoff says. “We have a very high crime rate in the United States connected with drugs, and we’re also spending lots of money in trying to stop the importation of drugs.”

Miron arrived at his findings after years of research, begun at the National Bureau of Economic Research in 1988. Researchers at the bureau were studying the economics of illegal drugs, and Miron, who had studied macroeconomics at Swarthmore College and MIT, became interested in the topic and started questioning the widely held belief that many drugs should remain illegal. “An economist’s natural instincts are that things should be legal, that prohibitions do more harm than good,” Miron explains.

When he began to analyze the data surrounding illegal drugs, he found that this economic instinct seemed to hold true. Drug-related arrests have risen dramatically over the past two decades and now average 1.5 million a year in the United States, he says, and the Office of National Drug Control Policy has quadrupled its funding. But drug prices have fallen significantly over the same time period — by as much as 80 percent — making them more accessible than ever and invalidating the theory that prohibition leads to prohibitive costs.

The analysis doesn’t single out drugs as a unique commodity; Miron believes that the model applies to any limited item that is in demand, and offers the Cold War–era trade in blue jeans in the former Soviet Union as an example.

Drug War Crimes, however, has attracted much more attention among prolegalization groups than might a treatise on banned denim. Miron, who limits his activism to economic reports for the marijuana reform groups Change the Climate and Drug Policy Forum of Massachusetts, acknowledges that in this case, it is a challenge to keep questions of morality completely separate from economic theory. He deals with the dilemma by looking at the issue as scientifically as possible and weighing the probable benefits against the probable damages.

“I think of my job as an academic, as an economist,” he explains. “I really try hard to think about all the possible consequences, and the broad range of all the unintended and intended things that will happen as a result of one thing or another.”


17 September 2004
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