Wednesday, June 22, 2011

Free Market Consequences of the Nanny State, part 2


By Zach Foster
Continued from Part 1

Legalization of narcotics would bring a true victory—or at least a Nixonian Peace With Honor—in the War on Drugs.  How so?  First and foremost, safety would rise dramatically in areas affected by drug-related violence.  With narcotics available at drug stores or dispensaries, they would no longer be a part of the underground market, robbing the drug lords of both their consumer base and their profits, and by extension destroying any need to fight law enforcement and other cartels.  Shootings and assassinations would decline sharply just the way alcohol-related gang violence plummeted after Prohibition was repealed.  This means that both cartel violence and local gang commerce and violence—all of them fueled by drug money—would decline sharply.  If not, they could at least branch out to become legitimate enterprises under government regulation, so people would at least not be getting killed in gun battles.[1]  If Wal-Mart and Target can exist in the same city without having routine gun battles, kidnappings, and executions, then two former cartels can compete peacefully in the free market under the law.

Better yet, drug use would actually be safer if state governments regulated production according to health laws.  This means that under state supervision, narcotics could be purely organic and NOT be mixed with cement, quicklime, sulfuric acid, and other deadly chemicals.  Yes, there would still be the possibility of drug overdoses occurring, but that is a matter of personal discretion.  Over 20,000 people die every year from alcohol causes (EXCLUDING drunk driving incidents), mainly alcohol poisoning.[2]  What has the nanny state done to protect these people?  Nothing, as it is impossible to protect determined people from harming themselves.  At least with state regulated non-toxic drugs, users wouldn’t be dropping like flies.

An economic incentive for the nanny state to get out of local drug matters (as if the safety and health aspects weren’t enough) is the potential tax revenue.[3]  This means that both the state and the federal government can tax this vice.  Right now marijuana prices vary, but are quite high in comparison to tobacco and alcohol.  Several decent quality joints would cost the same as at least a full carton (10 packs) of cigarettes, or two bottles of good quality Jack Daniels.  In the west coast, an ounce of decent marijuana costs anywhere between two and three hundred dollars.  On the west coast, an ounce costs well over four hundred.

The high pricing has nothing to do with the time or labor being put into growing and harvesting marijuana. If that was the case, then corn, apples, cotton, and tobacco would also cost three hundred dollars an ounce.  The reason narcotics—especially marijuana—are so expensive is supply and demand.  A huge amount of narcotics are harvested and manufactured every single day, both in the U.S. and south of the border.  In some cases, farmers have huge amounts of illegal crops.  In most cases, a lot of people have a few plants.  Because of federal laws, only so much can be harvested and sold before the Feds take notice, either to legal dispensaries or on the underground market.  It is known that every single day the U.S. Border Patrol and Immigrations and Customs Enforcement agencies catch tens of millions of dollars’ worth of narcotics being smuggled into the country.  The fact that so many narcotics are produced attests to the fact that there is a huge demand for them.  The fact that the supply is severely limited, both by law enforcement operations and producer cautiousness, explains why the price is so high.  Even with heavy taxation, narcotics on the free market will no longer cost hundreds of dollars, and prices will ultimately be lower.

Continued in Part 3: Helping People Kick the Habit


[1] Stamper, Norm. How Legalizing Drugs Will End the Violence. http://www.alternet.org/drugs/39565/
[2] Drinking: The Danger Zone. http://www.parent-teen.com/substances/poisoning2.html
[3] Miron, Jeffrey. The Budgetary Implications of Drug Prohibition. Harvard University. February 2010.http://www.economics.harvard.edu/faculty/miron/files/budget%202010%20Final.pdf

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