By Dave Anderson:
In August 2008, I argued that drug prohibition is counter-productive and stupid as well as expensive, especially as it applies to marijuana because it creates and sustains a massive black market. The black market has norm enforcement through violence instead of lawyers, and the fund flow is easily skimmable by groups that have a strong and vested interest in hollowing out states.
We also know that prohibition has not been successful in eliminating
drug use in the United States or other rich nations. It is a
moral/political posture of luxury that may bite us in our ass as it
fuels a visible insurgency in Afghanistan, potentially funds Hezbollah
in Lebanon and could potentially lead to a massive failed state in
Mexico with the attendant mass migration flows that would entail.Bringing the drug market into the overt and open white market and
away from the black market would be a significant blow to these
insurgencies. Legalizing most narcotics and then taxing them at a high
rate is a viable option. It will strengthen weak states where the
United States has a strong interest for stability. This will occur by
removing a significant funding stream
for the guerrillas and transferring it to the state. Prohibition is
a failed luxury that I am not sure we can afford for that much longer.
Not much has changed in the past sixteen months. A few more US states are dabbling in the medical marijuana masquerade of consumer legalization, and several more states are moving towards decriminalization of personal possession, but the cash flows are still massive and flowing into the black markets that fuel instability in both American cities and most of Mexico.
The Wall Street Journal this week is taking a look at the argument of defensive legalization in order to cut a major smuggling cartel cash cow. The idea is gaining acceptance in the terms of debate and policy discourse.
Growing numbers of Mexican and U.S. officials say�at least
privately�that the biggest step in hurting the business operations of
Mexican cartels would be simply to legalize their main product:
marijuana. Long the world's most popular illegal drug, marijuana
accounts for more than half the revenues of Mexican cartels...."Economically, there is no argument or
solution other than legalization, at least of marijuana," said the top
Mexican official matter-of-factly. The official said such a move would
likely shift marijuana production entirely to places like California,
where the drug can be grown more efficiently and closer to consumers.
"Mexico's objective should be to make the U.S. self-sufficient in
marijuana," he added with a grin.....Making pot legal might actually increase violence south of the border
even more in the short term, with drug gangs fighting over a smaller
economic pie of the remaining illegal drugs. But it would eventually
reduce the overall financial clout of cartels.
Pulling marijuana into the overt economy makes dispute resolution a matter between barristers, not bullets. We saw this as alcohol was relegalized; Capone and the other bootleggers quickly lost market share to Budweiser, Miller and Coors and while they and their associaters were still very powerful, the Mob was marginalized as one of their great money makers was now 'legit' and they could not out-compete the fully capitalized 'legit' producers.
Deborah White's current post Marijuana Legalization May Boost Economy in 2010 has several pertinent links and opens with this...
ReplyDeleteA bright economic spot in 2010 for the U.S. may be the legalization of marijuana, which would generate billions in legal annual U.S. sales, plus related sales and income tax revenues for state and federal governments.
This is an issue that the administration should be well out in front of...partly because the easiest way to deal with issue is rescheduling cannabis (a process that fall entirely within the executive branch); partly because the politician who moves on it will reap enormous political rewards (and not just from a single "base"); and partly because it would behoove Mr. Obama to take action before his hand is forced. And there's a good chance that it will be forced when CA's ballot referendum on decriminalization goes before voters in 2010.
ReplyDeleteFor example, MI passed a medical referendum in 08 that won by a significantly larger margin than Mr. Obama did. Since then, the state says that 11,517 applications have been received every business day since Apr 6, 09. (i read that last week)
He was a fool to laugh at the question of economic benefits of marijuana decriminalization. They are real and they are large, and the money is already flowing through the economy under the radar. Nor is it just Mexican cartels. If you live in a state that has loosened the rules, you can figure that someone within about a block of you is growing on a fairly large scale. (you'd only have to go further afield to find someone in a still restricted state)
Check you local yellow pages for "hydroponic supply" shops. Go for a visit. Someone is buying enough $100/gallon fertilizer and $500+ horticultural lamps to keep those places in business.
I agree fully with your excellent comments. Something I have not seen mentioned anywhere is the fact that the legal product must be significantly cheaper than the illegal product to gain a competitive edge.
ReplyDeleteAs a sidebar, can you think of anything that will boost restaurant revenues better than legal weed? I see it as a loss-leader, with eateries offering disposable pipes of strains that increase appetite at discount prices--sort of like Happy Hour half price drinks.
The phrase “drug legalization” makes me uncomfortable. Do we really want to make all pharmaceuticals available over the counter? If certain legal and technical barriers could be overcome, e.g. identifying those driving under the influence, I wouldn't be opposed to legalization of marijuana.
ReplyDeleteI'm uncertain about the legalization of all recreational drugs. What isn't a recreational drug? Is it a meaningful distinction?
However, I'm very skeptical about the argument being made here, that great benefits in both revenue and economization can be obtained through a partial implementation. I can see how complete abolition of drug laws could see the benefits being described (along with even more severe adverse effects). I don't see how just legalizing marijuana would have those effects. Wouldn't the illegal dealers just change over to selling something else that's still illegal?
"Legalizing most narcotics and then taxing them at a high rate is a viable option."
ReplyDelete===>
"Legalizing most narcotics and then taxing them at a reasonable rate similar to beer, tobacco and alcohol, possibly based on health factors, is a viable option."
there .. fixed your typo...
There is a big space between decriminalizing marijuana and making all pharmaceuticals available over the counter. Even at the state level where "legalization" of marijuana is creeping along there is no trend to do likewise with other substances. And there is an even bigger space between state legislatures and the US Congress.
ReplyDeleteWhen and if the matter gets serious discussion in Washington look for the drug and medical corporate communities to have their sticky hands all in it. Where money is to be made there is no limit to the Yankee imagination.
Individual states have used gambling and alcohol as revenue streams for years, either by licensing fees, outright operational profits or both. Marijuana would slip easily into a ready-made administrative model.
At the federal level we have an interesting mission morph at ATF.
Effective January 24, 2003, the Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) was transferred under the Homeland Security bill to the Department of Justice. The law enforcement functions of ATF under the Department of the Treasury [as in IRS] were transferred to the Department of Justice. The tax and trade functions of ATF will remain in the Treasury Department with the new Alcohol and Tobacco Tax and Trade Bureau.
Make that "Alcohol, Tobacco and Mary Jane Tax and Trade Bureau" and go on about your business.
(And when Obama laughed at the suggestion it was an unguarded moment when the question popped up without warning. His impromptu response was like the "police acted stupidly" gaffe of Gatesgate. When the issue becomes serious, so too will he.)
ReplyDeleteThere is a big space between decriminalizing marijuana and making all pharmaceuticals available over the counter.
I agree, Hootsbuddy. I'd like to see someone who's pro-legalization make the case that the benefits that they're claiming can be achieved without complete drug legalization.
Lex (second comment above) has the answer: reschedule cannabis. That would be "Tetrahydrocannabinols" and its variants now on Schedule I.
ReplyDeleteI have no idea how that works, but if he is correct about executive authority Obama might be waiting for an opportunity to attract pissed-off hippies back into the wagon.
Not only is THC listed on the schedule, but the entire genus of Cannabis (there is only one species in the genus) is listed as well. Why that is i do not know, though possibly as a catch all because Cannabis doesn't start producing THC in any quantity until the flowering phase of its life cycle.
ReplyDeleteThis scheduling of a plant genus, btw, is why US farmers cannot grow "hemp" for either fiber or seed even though in the case of the former harvest happens before flowering and in the latter the plant produces very little usable THC because the female flowers are pollinated and devote their energy to seed production.
According to the Controlled Substances Act of 1970, the DEA and the FDA are responsible for determining the placement of particular substances within the schedules. To the best of my knowledge, both of those agencies are within the executive branch. Congress could theoretically revisit the CSA, but when questioned, most Congressmen refer the question of scheduling a particular substance to the executive branch.
And it is in scheduling that marijuana decriminalization could be addressed without total decriminalization of all drugs.
It should also be noted that there is not always a significant overlap between marijuana users/distributors and other drugs. Dealers of other drugs will often also sell marijuana, but not the reverse.