David R. Henderson  

Ben Powell on the Drug War

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Economics is a science of means and ends. Thus, the question for economics is whether the means--drug prohibition--is effective in promoting the ends of greater health, safety, and productivity, as well as lower violence and criminal justice costs.
In "The Economics Behind the U.S. Government's Unwinnable War on Drugs," one of the two July Econlib Feature Articles, Texas Tech University economics professor Ben Powell answers that question with a resounding "No."

An excerpt:

The net effect of prohibition on drug users is, at best, to decrease consumption while making the consumption of the remaining drug users much more dangerous because their purchases are more potent and less predictable. This is borne out in the data on deaths from drug overdoses. From 1971--two years before the creation of the federal government's Drug Enforcement Administration and Nixon's declaration of the war on drugs--to 2007, the rate of death from a drug overdose per 100,000 total deaths increased by a factor of ten.

Another:
Other lost liberties arise from the nature of drug transactions. Normal crimes, such as theft, have a victim who has an incentive to report the crime. But normal detection and enforcement methods will not work in the drug war. Why? Because regardless of what the rest of society thinks about drug use, neither drug users nor drug dealers consider themselves victims. To enforce drug prohibition, police must assume powers and pursue practices that are unnecessary for enforcing laws against other crimes. These tactics include searches of people and property suspected of holding drugs, wiretapping and other surveillance, and violent raids of suspects' homes.

Professor Powell also takes on the idea that the way to fight the drug war is to shift it from a "supply-side" war to a "demand-side" war:
A demand-side drug war that places draconian penalties on usage or possession does not necessarily fail a means-ends test. If the goal is simply to end drug usage, implementing a swift death penalty for anyone convicted of possession or use would do the trick. Of course, it would not improve those people's health. Most people, including myself, would consider such a policy even more unjust than the current drug policy.


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COMMENTS (7 to date)
MingoV writes:

The Drug War is not about "promoting the ends of greater health, safety, and productivity" of our population.

The Drug War's first (but less important) purpose is appeasing those who believe that use of intoxicants is sinful and those who are afraid that their loved ones (or themselves) will become addicts.

The Drug War's second purpose is to expand the police powers of the national government and stomp on the Ninth Amendment (that already was nearly flattened). Local law enforcement agencies are now heavily militarized and dependent on the national government, a side-effect welcomed (and abetted) by national politicians and DEA administrators.

The politicians and non-elected officials of the national government benefit so much from fulfilling those two purposes that they care nothing about the great harms the Drug War causes here and in other nations. That explains why all attempts to end the Drug War fail despite massive evidence of lack of success and many harms: greatly increased prison population, increased violent crime (drug turf wars and robbery to gain drug money), increased prostitution, increased overdoses and poisonings, law enforcement resources diverted from other tasks, etc.

Cimon Alexander writes:

How do people here feel about the argument that the vast numbers of people imprisoned during the drug war were criminally inclined anyway, and that drug laws were a means to get them off the street? Secular declines in violence statistics seem to support this strategy.

NZ writes:

How does Powell prioritize the cost of dealing with drug cartel violence (or the risk of this cost increasing) relative to, say, the cost of incarcerating drug offenders? What about other costs having to do more directly with national security (including illegal immigration) than with government and healthcare expenditures?

Does he factor in the benefit of using drug offenses as a proxy to lock up people for harder-to-prosecute violent crimes?

Professor Powell also takes on the idea that the way to fight the drug war is to shift it from a "supply-side" war to a "demand-side" war
I've thought about that too, although I don't leap right to the death penalty solution the way Powell curiously does.

Why fight that war with laws at all? Why not mobilize cultural institutions and practices instead? Raise the social costs of drug use, and raise the economic costs of promoting drug use or trivializing heavy drug use. Get kids to believe that a bit of light drug use can be fun when you're a teenager but that it's disgraceful and pointless, or worse, when you're an adult. Encourage adults who do still use drugs to do so in secrecy and never to discuss it in the open. Change MPAA ratings so that the depiction of drug use carries a stiff ratings penalty. Any song that references drug use in a positive way is preceded and followed by a short message that mocks the artist for being childish and effeminate. Etc.

Daniel Shapiro writes:

I liked this piece a lot. A few comments.

Ben says that the demand for drugs is fairly inelastic, based on the claim that addicts demand for drugs will not drop off even in face of steep price increases. However, since most users of drugs are not addicts (see Jacob Sullum's book Saying Yes: In Defense of Drug Use and my article "Addiction and Drug Policy" for evidence) I wonder how much force this claim about addicts has for how a claim about price elasticity. Also, in the section "Cost of Drug Prohibition" Ben says that prohibition does decrease consumption, which seems in tension with the earlier comment that drug prohibition does not decrease the demand for illegal drugs to any significant extent.

I am, like David and Ben, an ardent opponent of drug prohibition, but unlike them, not an economist. My comments here are prompted by a desire to expand my understanding of the logic of the article.

Thanks much

David R. Henderson writes:

@Daniel Shapiro,
Ben says that the demand for drugs is fairly inelastic, based on the claim that addicts demand for drugs will not drop off even in face of steep price increases.
In the article, footnote 5, Ben cites an elasticity of -0.5.
Also, in the section "Cost of Drug Prohibition" Ben says that prohibition does decrease consumption, which seems in tension with the earlier comment that drug prohibition does not decrease the demand for illegal drugs to any significant extent.
With an elasticity of -0.5, and a price increase due to prohibition that 's huge, you will get a substantial reduction in consumption. That's why one cannot make the argument that prohibition will not cut consumption. It almost surely will. (I say "almost" because of the forbidden fruit effect, which shifts the demand curve.)

Cvarza writes:

I agree with this article that given an inelastic supply it is important to address the demand side.

@NZ:
to answer your question regarding how drug cartel violence would be prioritized, with a demand side war-on-drugs, the demand for drugs would be reduced and therefor cartel violence (bribery, weapons, etc.) would also be reduced. This in turn would cause cartel violence to naturally fall in terms of prioritization.

With respect to social cost, I think this is implied in terms of switching to a demand side war-on-drugs to focus on programs educating people on the harm of drug use rather than border control or trying to incarcerate drug offenders...in a way treating drugs more like tobacco

NZ writes:

@Cvarza

Hmm...I wonder how much demand could be reduced without incarcerating drug offenders. Possibly some, certainly not much, and probably not at all. People who advocate drug legalization should be prepared to admit that it would come with a likely increase in drug use, at least in the short- and medium-term. (I favor a demand-side cultural campaign against drug use just to keep somewhat of a lid on things, and to keep the culture tolerable.)

So, if you advocate drugs being legalized but you still want people to know you have your head screwed on straight, it's important to communicate that legalization would be devastating to the drug cartels currently controlling supply and wreaking havoc all over the place--increasingly, within our own borders.

I understand that "cartel" is a misnomer in this context since the "drug cartels" aren't actually cartels, but Powell doesn't mention them even once. Instead he refers to "dealer networks," which both isn't the same thing and doesn't have the same ring to it. He refers to "organized crime" only once, lumping them in with "dealer networks".

Thus, the effect of Powell's piece is one of "I want to legalize drugs because drug prohibition makes the government big, infringes on liberty, and puts lots of brown people in jail." That isn't going to persuade the law-and-order conservatives who support or are apathetic to drug prohibition.

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