CARPE DIEM
Professor Mark J. Perry's Blog for Economics and Finance
Wednesday, August 18, 2010
About Me
- Name: Mark J. Perry
- Location: Washington, D.C., United States
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
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16 Comments:
There is more on the daily nitty-gritty behind the numbers at these two sites, information one will rarely see in our local or national news outlets...
Borderland Beat
BlogdelNarco
The trouble in Mexico, according to accounts I've read, are more related to corruption than to laws that oppose the popular will. Historically, illicit drug use has never been widespread and always opposed by law. This is a very different circumstance than prohibition, which forbade alcohol, which was widely used by regular people and which was repealed quickly. Prohibition was not repealed because of violence in Chicago but because regular people did not want to be restricted in that way. To conflate the two as morally equivalent seems dubious at best.
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"Historically, illicit drug use has never been widespread"
bill, i have no idea where you live, but you are way, way off base on this. is 1/3 not widespread? been to a college campus or urban danceclub lately? it's pretty widespread.
it's not why prohibition was repealed that matters, it's what happened as a result of it and of its removal: a huge surge in violence to control the distribution of a lucrative illegal drug than declined massively when it was legalized.
the costs of the drug war are massive, and its effects tiny apart from incarceration for personal choices and price supports for thugs. the drugs flow because there is demand. legalizing it just makes it a business like any other. cocaine used to be legal and we didn't all turn into raging addicts. would you start smoking crack if it were legal?
hell, in high school, drugs were easier to buy than beer. legalize them with a 21 year old age law, and youth use will drop considerably.
the corruption in mexico is only made possible by the huge amounts of money involved and the need to bribe officials to protect it. legalize it and the money and the need both go away.
the corruption in mexcio around avocado exports is pretty minimal.
morganovich, thank you for your clear response. Your points well taken and I won't dispute that drugs are used. The definition of widespread is in question here and I'll leave it alone for now because I believe responding to your other points is more important.
Certainly legalizing drugs will change the economic equation with both beneficial and detrimental results. On the one hand, funding for gangs and corruption will be severely curtailed. On the other hand, because prices will drop supply will increase. Along with the supply increase and price drop will come increased usage until the supply/demand (IS/LM) curves equalize at a new level.
What is unknown is where the new level will be and what the societal costs will be in terms of destroyed lives. I have high school friends whose lives were destroyed by ignorantly availing themselves of the available drugs. If they are more available more lives will be destroyed.
Also, upon what foundation are laws built? Is it economics or morality? This is one heck of a hot button question, but the answer is important. If economics, then why not legalize other currently forbidden activities - namely prostitution? After that, what else comes to mind? If morality, then what moral pillar is to be selected?
I'm not trying to answer these questions to everyone's satisfaction. However, I'm hesitant to take the step of legalizing drugs until these questions have been answered. As a smart person once said, "begin with the end in mind". Each step seems to me to be a kind of new beginning.
thanks for listening.
bill-
you raise some interesting points. let me see if i can address them.
first off, price won't go into freefall. drugs will be taxed. most of the price you pay for something like cigarettes is tax. that mitigates the demand increase somewhat.
second, you are making assumptions about price elasticity of demand. in most cases, i doubt that it is funding that is the gating factor on drug use. i have real doubts that people would drink twice as much if beer were half the price. i suspect most drugs will behave similarly. the evidence that decriminalization has not increased use in portugal, spain, and holland is quite persuasive.
however, this decriminalization (which i understand is not legalization) has actually reduced abuse and health costs. getting it out in the open makes treatment easier. guaranteeing quality avoid many serious health issues. no one goes blind from drinking alcohol anymore because quality is guaranteed. in a great many cases, the impurities and cutting agents in drugs do more damage than the drugs themselves.
by making it more difficult for kids to get drugs, bringing use out in the open where it can be dealt with, freeing up money for abuse programs, and making the drugs themselves safer, i suspect that you would get far fewer ruined lives even if the number of users went up.
sure, there might be a mild uptick in use, but would you start using heroin if it were legal? i suspect that those who want it are already getting it. could this additional demand provide even a fraction of the health damage from cigarettes or the social damage of alcohol?
i'd frame your morality question a bit differently. should government take on the role of protecting us from ourselves? i think not. if we ban marijuana for "our own good" what about cigarettes? or alcohol? or trans fats? or listening to earbuds too loudly? where does this protective mandate end? any line you draw is arbitrary.
actions that harm others are one thing, but why are actions that just affect consenting adults to be subject to government mandate (and i'd certainly add prostitution to that list). why make it illegal? the often discussed evils of prostitution (pimps, human trafficking, violence, disease) all disappear if you use a structure like the nevada brothels.
why limit liberty so long as it does not impinge on the liberty of others?
i fear that the government imposed morality you describe sounds an awful lot like paternalism.
the same logic you apply about moral pillar could be sued to defend sharia law as well.
what i do is my business so long as it harms no one. i believe our law should be founded in individual rights not someone's idea of morality.
morganovich,
Your assertion is persuasive. There are lots of bad things already in our world and I make it my business to prepare my son to face them responsibly. Taking a few more out of the closet won't necessarily make the world materially more dangerous. For example, although he is only in third grade I am already educating him on the dangers of illicit drugs as the opportunities present themselves (like when a carload of young adults parked near us are smoking pot before going into the skating rink). That wouldn't change if they were decriminalized.
Agreed that government imposed morality is a failed proposition. We are seeing increasingly the substitution of law in place of true morality, which is a slippery slope to totalitarianism (including sharia).
All that said, the idea of decriminalizing drugs is not a comfortable one for me. Nevertheless, it may be what is needed to restore the burden of morality onto the people.
Agreed that maintaining the maximum individual freedom is the best choice. Only then will people be free to choose the best from the marketplace of ideas for their lives.
Um... aren't a lot of drugs already legal in Mexico?
People should pick the laws they want to obey. When they don't like a law, just ignore it.
bill-
i think you have the right attitude. teach our children well and trust them to make good choices.
morality an gunpoint is not morality at all. actual morals and ethics cannot be imposed from outside.
i have wondered if their illegality actually makes drugs more alluring.
there was an interesting study done on cognitive dissonance in which subjects were asked to complete a long, boring, pointless task like sorting buttons into cups or something. they though that this was the experiment, but it wasn't, it was just a dull task. half were paid, half were not. then afterward, they were asked about how the felt about the task.
the interesting result was that those paid described the task much more negatively than those who did it for free. the thinking is that we seek consonance between our actions and our attitudes. those paid were more able to dislike the task, because they had a reason for doing it. those who did it for free decided it wasn't so bad because otherwise they had to face the fact that they did something stupid and pointless for no reason.
i suspect that prohibitions work the same way. ban drugs, and we don't use them because they are illegal, but oddly, such proscription may mitigate the ability to internalize not doing them because they are harmful. the reason for the action is external not internal. this makes it easily subverted in situations where no authority is present.
i'm rapidly getting well out of my depth in this psychology, but i really do think that deciding not to do something yourself is a much more durable behavior than being told you will be punished if you do. any child whose mother just left the room knows this.
telling the kids not to jump on the bed or you'll spank them does nothing to stop their desire.
Bill,
A few thoughts for your consideration.
Part of the problem with the war on drugs is that one is inevitably fighting the law of supply and demand. Crimping off supply merely raises the street price creating greater incentive (and profits) for traffickers to fill the void.
As a society, we further exempt suppliers from the responsibilities of taxation, liability, quality control or the health consequences of their product and fail to provide the most basic level of consumer safety or legal oversight. When one considers the lawsuits around asbestos or tobacco or Vioxx, it seems that illicit drug providers are getting a free pass.
I certainly agree that drugs like heroin, crystal meth and cocaine do tremendous damage to the brain however, if the street price of marijuana were dropped substantially, it is very likely that marijuana would be consumed instead of more expensive and far more dangerous illicit drugs. Such a shift in consumption would represent a better health choice...not a perfect outcome but an improvement.
An additional cost to society is criminalization of possession. It is not just the costs associated with being the #1 jailer in the world but additionally, the effect of criminalizing a segment of the U.S. population. Does someone with a criminal record have the same employment opportunities as a person who does not? Is someone with limited economic opportunities more or less likely to reoffend?
Just some thoughts. I used to share your view that these products were far too dangerous however it is obvious that the war on drugs very expensive and has not worked. When one considers that one is fighting a losing battle against the law of supply and demand, it would seem that some other approach should be considered.
Morganovich and Bill,
One of the best debates I've read in a long time.
Thanks.
Morganovich and Bill,
One of the best debates I've read in a long time.
Thanks.
....then why not legalize other currently forbidden activities ....
Like we did with abortion, or like we might do with stem cells, or warrantless searches, or assault weapons, or keeping more than 90% of your own income?
"When one considers the lawsuits around asbestos or tobacco or Vioxx, it seems that illicit drug providers are getting a free pass."
Yep, even the avocado importers have to pass more stringent quality control regulations.
I have been a university prof. here in Mexico since 1988. The use of drugs here--even marijuana--is minimal, at least with the students I have dealt with. The only marijuana I have been offered, was by a guy from CALIFORNIA who was teaching here.
You can buy alcohol and cigarettes at any age almost anywhere, but the young people I know, don't seem to binge drink. Maybe prohibition DOES enhance the desire to try the illicit.
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