The argument that full drug legalization would destroy the cartels’ economic foundation isn’t new or really news; libertarians have made this case for many years. The fact that conservative columnist George Will has begun to argue it might be. In yesterday’s column, Will reviews a new study on the subject, and concludes that legalization is probably inevitable anyway — and the damage to the cartels might be worth it:
Dealers, a.k.a. “pushers,” have almost nothing to do with initiating drug use by future addicts; almost every user starts when given drugs by a friend, sibling or acquaintance. There is a staggering disparity between the trivial sums earned by dealers who connect the cartels to the cartels’ customers and the huge sums trying to slow the flow of drugs to those street-level dealers. Kleiman, Caulkins and Hawken say that, in developed nations, cocaine sells for about $3,000 per ounce — almost twice the price of gold. And the supply of cocaine, unlike that of gold, can be cheaply and quickly expanded. But in the countries where cocaine and heroin are produced, they sell for about 1 percent of their retail price in the United States. If cocaine were legalized, a $2,000 kilogram could be FedExed from Colombia for less than $50 and sold profitably here for a small markup from its price in Colombia, and a $5 rock of crack might cost 25 cents. Criminalization drives the cost of the smuggled kilogram in the United States up to $20,000. But then it retails for more than $100,000.
People used to believe enforcement could raise prices but doubted that higher prices would decrease consumption. Now they know consumption declines as prices rise but wonder whether enforcement can substantially affect prices.
Kleiman, Caulkins and Hawken urge rethinking the drug-control triad of enforcement, prevention and treatment because we have been much too optimistic about all three.
And cartels have oceans of money for corrupting enforcement because drugs are so cheap to produce and easy to renew. So it is not unreasonable to consider modifying a policy that gives hundreds of billions of dollars a year to violent organized crime.
Will notes that the intermediate position of legalizing only marijuana would only cut a quarter of cartel revenue, and would be insufficient to bring down the drug rings that deliver harder drugs to the US. That’s certainly true, but it’s a lot easier to legalize marijuana, for a few reasons. One, it’s more socially acceptable and is likely to face much less opposition. It’s also less toxic than other intoxicants — in fact, it’s less toxic than alcohol. It’s nearly impossible to overdose while smoking marijuana, even the stronger varieties, while alcohol poisoning directly results in a number of deaths each year (not indirectly, as in traffic deaths, but in actual cases of poisoning). More to the point, though, legalizing marijuana would allow it to be cultivated within the US, where enough could be grown that would more or less eliminate the need to import it. That would reduce or eliminate the issues of border security and import taxes, at least to the extent that either apply to marijuana.
These conditions don’t apply to other drugs. Even methamphetamine, which could be easily manufactured in the US, is very toxic and dangerous to produce. Cocaine and heroin would almost certainly have to be imported, and while the cartels might be able to convert to legitimate businesses, importation of these drugs would necessarily involve heavy government regulation and taxation. That would make them more costly to produce and sell. Even in legalized forms of recreational “drug” use, such as cigarettes and alcohol, taxes create an underground economy in both that routinely runs into the billions, and is a chronic problem for law enforcement. That’s also organized crime, and it can become violent at times as well. We might find that legalization provides two economies, and the law-enforcement costs might not drop all that dramatically when it comes to cocaine and heroin even when we allow the trade.
Curiously, Will only nibbles at the core of the libertarian argument for legalization, which is that (a) adults should be allowed to choose for themselves whether to imbibe in intoxicants, and (b) the costs of legalization are far outweighed by the benefits of rolling back decades of encroachment on civil liberties in the name of fighting the “war on drugs.” Those are both compelling arguments, even if one disagrees about the cost-benefit analysis, and not just for libertarians. I’m skeptical about the idea of legalizing cocaine, heroin, and methamphetamine, but I’m equally skeptical about government enforcement that requires me to provide photo ID to buy Sudafed while no one bothers to check my ID when I identify myself at the voting booths.