The cost of drug prohibition

The topic of illegal drugs is one where I’ve changed my mind over the years. Growing up I agreed that illegal drugs should remain illegal, believing that taking drugs was both dangerous and immoral.

I’ve since decided that outright legalisation is the only moral policy, and I’m certainly no hippie, as my friends will attest. So why have I changed my mind?

Firstly, since becoming a libertarian, I believe the state has no business telling us what we can or can’t eat, drink, smoke, inject etc. It is a matter of individual liberty to decide whether you wish to risk getting cancer from smoking, or a painful hangover from the late night party. But this isn’t the most powerful reason for me.

The second, and most important reason to my mind, is the numerous costs that arise from prohibiting drugs. Many of these impact innocent third parties. Taking drugs certainly can be dangerous, but I have no doubt that prohibition makes things worse, much worse.

1. Drug prohibition raises the price of drugs

This of course is the very idea behind drug prohibition. The price of drugs rises not because  the actual cost of production, distribution actually rises by much, but to compensate the increased risk taken by those selling drugs.

2. Drug prohibition increases crime, including violence

As a consequence of the increased price of drugs, many consumers resort to theft in order to pay for them. The massive profits for those selling drugs makes violence common, and in many countries, the penalties for violence are not much worse that those for selling drugs. If you risk going to prison for 10 years, the risk of going to prison for 15 isn’t much worse. There is no legal recourse if you’re conned into buying the wrong thing.

3. Drug prohibition leads to more potent drugs

Due to the risks involved in producing and distributing drugs, there is a tendency to create ever more potent drugs – to get more “bang for the buck” as it were. This is exactly what happened during the prohibition of alcohol is the US in the 1920s – the speakeasys were full of whiskey drinkers, not lager drinkers.

4. Drug prohibition leads to more dangerous drugs

Since there is no legal recourse to take against those selling drugs, and because the production of drugs must take place hidden from view and in places not designed for the task, drugs become contaminated.

5. Drug prohibition corrupts law enforcement

The enormous sums of money involved makes bribing police officers worthwhile for the dealers and very tempting for the police. This was a serious problem during prohibition in the 20s.

6. Drug prohibition displaces more useful economic activity

In some parts of the world, growing poppies is more profitable than growing wheat or other food crops. Legalising drugs would lead more farmers to produce food instead, both reducing the supply of drugs and increasing food production in some of the poorest parts of the world.

7. Drug prohibition makes it easier for children to gain access to drugs

Since selling drugs is already illegal, there is no further risk to selling drugs to those under 18. This contrasts with alcohol and tobacco, where being caught selling these to children results in serious fines.

8. Drug prohibition doesn’t stop the supply of drugs

A fairly obvious point in some respects. Since there is demand for drugs, someone is going to try and meet that demand. Alcohol was easily available in Prohibtion-era America. Drugs aren’t hard to find nowadays either.

Today, Mexico is fighting a very real war against drugs, and it has become more violent than Iraq. Since 2006, over 40,000 Mexicans have died in drug related violence. Many other Central and South American countries are paying a very high price in the attempt to keep drugs off the street. Drug dealers are often castigated for their violent behaviour, but if the trade was legalised this violence would dry up very rapidly. All of the crime surrounding drugs is due to their illegality – we don’t see rival brewers taking to the streets with guns and knives to wipe out the competition. Police forces are being increasingly militarised to fight drug gangs and whole neighbourhoods are being destroyed.

With drugs legalised, drugs would become less potent and safer. Those selling drugs could do so openly – and as a result would need to protect their brand and reputation by selling exactly what they claim and ensuring they are safe. The reduced profits would reduce the incentives to use violence against competitors, and there would be no need to bribe law enforcement.

We don’t send alcoholics to prison – so we shouldn’t send drug addicts there either. It only makes their situation all the worse. They now have a criminal record, making future employment much harder. Drugs are easily accessible in prison as well, so it doesn’t even stop the addiction. Instead of wasting money arresting, convicting and locking up drug users, we could spend some of that money on treatment instead. One report estimated the UK alone could save £10bn a year by legalising drugs.

It is quite possible that legalising drugs may lead to an increase in overall drug usage. But this is a choice for those taking drugs. Currently, we are making countless innocent people victims of theft and violence, who made no such choice to be involved. I would rather see an end to the thousands of deaths in places like Mexico, even if a few more people do start taking drugs.

Milton Friedman nicely sums up these arguments in this old video, but no less relevant for its age:


For further reading, I recommend The Economics Of Prohibition by Mark Thornton, available for free at the Mises Institute.

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3 Responses to The cost of drug prohibition

  1. nomasir says:

    Excellent points Andy. How I long for the day when the people stop pushing “theocracy” (or pick another suitable term) in the interest of protecting other people from themselves … and costing us all a great deal in the process.

    • andyfrith2 says:

      Indeed, even if one held the view that taking drugs is immoral, it doesn’t automatically follow that it should also be illegal. Forgetting that there is a difference between the two leads to all the problems I listed.

  2. Pingback: Getting Stupid with Mr. Miyagi « Jeff Oakes

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