Drug Policy is Deja Vu All Over Again

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Drug Policy is Deja Vu All Over Again

• Stephen T. Easton
• Simon Fraser University
• and
• The Fraser Institute

2
To set the stage for todays discussion

• We need to go back a little to see how future
  history will treat us by remembering the last
  prohibition

3
Remember the Last Great Prohibition

• Canada prohibited the consumption of alcohol from
  1917 to 1922 (more or less)
• The United States prohibited the consumption of
  alcohol from 1918 to 1932

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The Consequences

• As an enduring testament to futility,
• Recall that the Untouchables is still running
  on TV.

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History anyone?

• There they are, deeply committed to fighting what
  is now a legal and respectable line of work
  brewing and distributing alcohol.
• So, sip your Chardonnay, have a brew, or mix a
  retro martini and applaud Elliot Ness and the
  Untouchables as he fights your kind of crime.

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A Message to Current History

• We cannot prevent people from consuming illegal
  substances that they want
• It is a war that was lost in the 1920s and 1930s
  and is being lost again
• Lets take a look at the facts

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Lifetime Numbers
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Current Users
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Business is about Resource Allocation

• What do we do in a business oriented approach?

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Business is about Resource Allocation

• We look at the harm inflicted.
• We look at the difficulty of enforcement
• We reallocate resources so that they reflect the
  observation that an additional unit of effort
  yield the same payoff in each activity to which
  we are committed

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Business is about Resource Allocation

• We spend too much time and money on vainly trying
  to control the uncontrollable -- Elliott Ness and
  you.
• We spend too little time in preventing, educating
  and remedying those who are in misery with drugs.
  
• Incidentally, our policy makes available large
  sums of money to people who violate the law.

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So Is Drug Control Really about the Harm they do?

• Lets ask about what is currently legal
• Tobacco and
• Alcohol

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27 of the Canadian Population Currently Smoke
(Tobacco)
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72 of Canadians Use this Formerly Prohibited
Substance
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What is the Putative Effect of Behaviours such
as Smoking and Drinking?
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What is the message?

• Clearly, the harm the substance may do is not the
  criterion by which we determine illegality.
• Even with the poignant story over the weekend,
  nobody is suggesting banning cars that can drive
  fast simply because some do drive fast.

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The futility of trying to stop drugs from the
production end

• Let us take the most obvious example of drug
  production that absorbs police energy
• Marijuana Production
• It is profitable
• It is easy.

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Some Costs of Production
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So Why Do It?

• Cost 100,000
• Value of Crop 50,000
• 3 Crops a Year!
• Value of 150,000 on a Cost of 100,000.
• A very good return on capital even with these
  very, very conservative assumptions

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There is lots of money in marijuana, not to
mention the other drugs

• Marijuana alone probably nets at least 700
  million into producers pockets -- just in
  Vancouver.

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Drug W and Charges Canada and British Columbia,
1998
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What does the pattern mean?

• In BC marijuana possession is in some sort of
  legal limbo.
• How the Courts proceed is anyones guess
• It is not just we, the general public who are
  confused about crime and punishment

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So is our money well spent?

• It is pretty clear that enforcement in the case
  of marijuana (and most other drugs) has not
  limited their accessibility -- just ask at any
  local high school, not only at Hastings and Main.
• Many producers use drug money for other
  undesirable ends (just like Al Capone)

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What if we legalize drugs?

• We will end the supply of money to people who use
  it for bad ends.
• More people will do them. Yes, but we can
  treat/educate in the open.
• Just imagine if alcohol was still illegal.
  Replay Hastings and Main multiplied by a factor
  of 70!

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Conclusion

• We have a problem. We have been trying to
  interdict the supply and punish users and
  suppliers.
• Prohibition does not seem to work and is very
  costly -- as detailed by others here.
• The costs of the alternative, if alcohol
  prohibition is a model, are worth considering.

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Oh yes, as an economist

• If it is legal, we get to measure it, tax it, and
  regulate it, something we simply cannot do when
  it is illegal.