The Budgetary Effects of Ending Drug Prohibition

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David R. Brumbelow's picture

An old argument that if we just legalize illicit drugs we can tax them and make lots of money.  Yes, we make lots of money, and then spend lots of money dealing with the fallout from the legalization, increased use and abuse of those drugs. 

For example:

The effects of more drug use and traffic accidents, and accidents in general. 

The government dealing with addiction, homelessness, underachievement. 

Hospitalization and death. 


Mental health, etc. 

“First and foremost, marijuana is already associated with more abuse and dependency (now called substance abuse disorder) than all other illegal drugs combined. Roughly four out of seven problem users of illegal drugs are using marijuana. This is a dangerous blind spot exploited by many legalization advocates (although some of them are now warning about the growing risk of heavy marijuana use under legalization).”

David R. Brumbelow

Bert Perry's picture

No argument that big pot busts generate a lot of buzz (no pun intended), but the overall costs incurred by the government after legalization of some (or all) drugs would be medical costs incurred by added users after legalization, as well as the costs of apprehending/incarcerating additional criminality due to legalization, no?  And whatever these numbers would be, it would be offset by large drops in the costs of finding, arresting, prosecuting, and incarcerating today's dealers of drugs.  

And in that light, for at least "soft" drugs like marijuana, the evidence coming out of states which have legalized it is encouraging.  Legal availability of the stuff is not leading to large increases in usage, and it's also encouraging to have very promising drops in opioid deaths after legalization.  We might infer that what's going on in part is that people are now free to use a better drug to handle their ailments--things like back pain.

Obviously whatever we do, we need better science than what we've got today--I can't argue that what we have is absolutely conclusive--but all in all, I'd guess that legalizing the "less addictive" (really "not physically addictive") drugs might be a huge benefit for the country.  

Aspiring to be a stick in the mud.

Aaron Blumer's picture


Pragmatism ... when people reduce moral questions to nothing more than a question of quantifiable results. It's not a Christian way to think, for sure. But also not a civilized way to think.

Some things are just wrong, and civilizations spend resources to fight them -- because they're wrong, not because the fight produces a desired bottom line.

The love of money truly is a root of all kinds of evil.

Bert Perry's picture

Aaron, even the libertarians aren't being entirely pragmatic.  The moral argument is that our drug bans create a black market and a great opportunity for organized crime to ravage our inner cities, killing a lot of people and filling our prisons.  There is also a moral argument that if indeed enforcing our current drug laws costs a hundred billion bucks a year (or perhaps a lot more) and does little to reduce drug use, that is also a moral offense, and many of the techniques used in the war on drugs (e.g. asset confiscation, militarization of police forces)  are legally, Constitutionally, and morally dubious as well.

So let's not use a straw man here; agree or disagree, there is a very significant moral argument being made by Cato.  And as we discuss this, a gut check; if our arguments appear in Reefer Madness, go back to the drawing board.

Aspiring to be a stick in the mud.

Aaron Blumer's picture


I can concede that the act of spending always has some moral significance. Can concede as well that illegal market consequences have moral significance.

These are still essentially pragmatic arguments because they reject a priori that some moral struggles are important independently of the question of material or even observable behavioral outcomes.

So there are "pragmatic values" (pretty much utilitarian) and there are less tangible, transcendent values. To the degree a society is not officially opposing behavior that is seriously harmful to human flourishing, it isn't civilizing.

I have to admit too, though, that there *may* be ways to officially oppose apart from the traditional way of law and punishment. But it's hard to do that without sending the message that "this behavior isn't 'wrong' ; it's just unfortunate and has poor outcomes."

The completely secularized government most libertarians seem to dream of is so hollow, effete. 

Bert Perry's picture

Aaron, you're assuming that the moral statement that government ought to be making is the current policy.  That's at the core of the libertarian objection to the war on drugs, really, whether a worthwhile moral statement is made by creating this black market (and half our homicides, really) that we've got now and imprisoning people for smoking a joint.  You don't have to be a secularist (most libertarians aren't, actually) to say "hey, that is way out of proportion to the offense there."  

Biblically speaking, libertarians would point to a substance in Scripture that is (unlike some banned drugs FWIW) physically addictive, but no effort is made to ban it.  Historically speaking, they'd point to what happened when our country tried to do so, as well as the fact that as a rule, the church reformed the state--any Romans 13 leadership from government apart from punishing obvious crimes like murder came after the church changed the form of government.

Regarding the moral statement, you have to make a moral case of the type of "this substance is so dangerous we can't have it floating around legally", and that really hinges on lethality and physical addiction, in my view.  I am willing to entertain that for things like meth, cocaine, and opioids, and the like, but not for marijuana.  For reference, even the case against heroin is weakened when one realizes that 95% of Vietnam veterans who used it in Vietnam stopped when they came home.  There is a lot going on beyond the notion of the "evil drug", really.  (in that case, a war they all knew might kill them without generating any benefit for their country)

Not a stoner, don't condone intoxication (as Biblically defined) by any stretch of the imagination, but Exodus 20:13 and Exodus 20:15 come to mind when I consider the possibility that the war on drugs costs $100 billion annually, along with 5000 lives due to drug violence and the black market, and may not have much of a benefit to society.    That's not just pragmatism, that's Biblical. 

Aspiring to be a stick in the mud.

Aaron Blumer's picture


I don't think you're seeing my point, but it's fine. I'm finished making it.