Why the War on Drugs Is Hard to Win

Tyler Cowen provides more evidence for the empirical hypothesis that Gary Becker, Michael Grossman, and Kevin Murphy are geniuses:

Marginal Revolution: Why the War on Drugs is hard to win: Here is a summary of forthcoming work by Gary Becker, Michael Grossman, and Kevin Murphy:

The authors demonstrate how the elasticity of demand is crucial to understanding the effects of punishment on suppliers. Enforcement raises costs for suppliers, who must respond to the risk of imprisonment and other punishments. This cost is passed on to the consumer, which induces lower consumption when demand is relatively elastic. However, in the case of illegal goods... where demand... [is] inelastic[,] higher prices lead... to an increase in total spending.... The authors argue that excise taxes and persuasive techniques such as advertising are far more effective uses of enforcement expenditures. "This analysis... helps us understand why the War on Drugs has been so difficult to win... why efforts to reduce the supply of drugs leads to violence and greater power to street gangs and drug cartels," conclude the authors. "The answer lies in the basic theory of enforcement developed in this paper."

Comments

[Atrios]

Um, a quick skim shows that there's a bit more in the paper but the basic result - shifts int he supply curve increase total revenue - have been a stock intro micro example since I went to college, and one which I generally used myself.

[Jim Lund]

My first take is that it isn't hard to "understand why the War on Drugs has been so difficult to win". It has been a complete success. Thousands of politicians have campaigned on it and won. While benefiting Republicans to a greater degree it even has bipartisan support. The goals of this War, I don't think they are what economists are graphing...

[ogmb]

The Microsoft Effect: Economists explaining in Economese what the practitioners have understood and implemented for the longest time. Not genius material.

[christofay]

And for the white Christian party, the war on drugs has been a success. They've been able to demonize black Americans and lock up a lot of black American men. Not everything is measured in dollars and cents, it's a moral thing that the liberals don't get. I think this post topic demonstrates that.

[battlepanda]

Not that I'm a huge fan of the war on drugs, but a good comeback for this line of reasoning would be "well, if the drugs are so damned addictive, then it's all the more important to make them illegal to make it as unlikely as possible that kids are hooked on it in the first place."

Besides, I am highly skeptical that the demand for drugs is inelastic. You're telling me that quantity of drugs consumed in this country would not go up tomorrow if all of it suddenly became cheap and legal?

[D Stone]

I think it's pretty obvious that demand for drugs is elastic. It has been commonly observed that when one drug becomes unavailable others are substituted. The most commonly used drugs, alcohol and cigarettes, are also among the cheapest.

Those that support legalization pretend that the "drug war" problems will go away without new ones being created. They just haven't realized that this is what a "successful" drug policy produces; drugs that are expensive and stigmatized so that their use is relatively limited.

Alcohol is probably responsible for half the 50,000 annual traffic deaths and much social pathology. Cigarettes kill about 400,000 each year. Anyone who has taken care of drug users knows that each drug has its own constituency. There's no rationale allowing each recreational drug to become cheap and available enough to maximize its victims.

[Isaac]

Following Battlepanda's reasoning, I'm perfectly willing to believe that for those who are already addicted demand for drugs is inelastic, but I wouldn't be surprised if susceptibility to drug addiction is elastic. That is, I'm much more likely to try cocaine if it costs $5 than if it costs $1000.

Plus, I'm with Atrios: I'm not sure what is innovative about the cited passage, it seems like common knowledge.

[ogmb]

"I'm not sure what is innovative about the cited passage, it seems like common knowledge."

There are two types of great scientific discoveries: The ones that no one believes, and the ones where everybody claims they knew it all along. This is not to say that this one belongs in the latter category, but "common knowledge" seems to be a bit overreaching.

['As You Know' Bob]

I remember it like it was yesterday:

Nixon's Shafer Commission recommended decriminalization back in March of 1972. But Nixon got himself distracted by his desire to carpet-bomb farmers over in Asia, and then had to resign.

Finally, on August 2, 1977, the Democratic President recommended decriminalization to a Democratic Congress.

How the heck did we reach the 21st Century and the Shafer Commission's recommendations still haven't been acted upon?
Oh, that's right - we've lost a third of century of social progress to Republican administrations (with a couple of interludes of Dems trying to undo their damage).

[Bruce Webb]

"However, in the case of illegal goods... where demand... [is] inelastic[,] higher prices"

This is just stupid. As one that went through it in real time such stupidities as Operation Intercept (Nixon's semi-successful attempt to choke off the supply of cheap Mexican marijauna) http://www.druglibrary.org/schaffer/history/e1960/intercept/chapter1.htm had three immediate consequences: importation of stronger weed from Columbia, importation of opiate inhanced Thai sticks from Thailand, and the transition from pot to crack with the attendent gang violance and drive by shootings. In the early seventies it was fairly common that there just wasn't any cheap pot in town, even in Berkeley, so people just turned to other drugs. Squeezed supply of a mild, social drug at $10 an ounce (the going rate for marijauna in California in 1973) led to lots more dollars for more concentrated products. And the crack and powder cocaine epidemic of the late seventies and early eighties was the direct result.

Nixon declared war on $10 baggies and delivered more drug addiction than ever. We would all be better off if we were still spending hours sifting out the seeds and stems.

[kvris]

Umm, there have been *policy* changes based on arguments of this nature, c.f the legalization of certain drugs in Holland. Also, if one reads literature on people studying drug trafficking across the world, it is pretty obvious that the present drug control regime is a failure. I don't see the "genius" inherent in this paper.

[Oskar Shapley]

Common knowledge sucks until it's verified with empirical evidence.

[paulo]

As a friend high-up in US drug wars said, in my paraphrase, "It's impossible to 'win' any war on drugs. You don't try to 'win' because you never will. You can only manage the flows. Talk about 'winning' is just the stupid stuff of politicians."

[NinjaPlease]

To stop illegal drugs a few things are needed:

#1 Focus your efforts on cartels / corporations that develop, produce, cultivate and profit from the creation and distribution of illegal drugs. A kid who grows weed in his attack with a friggin heat lamp in Kansas does not deserve my the same attention (but is a much easier target.)

#2 Trace the money of these corporations and freeze their assests wherever possible. Use said assets to fund rehabilitation clinics and research to help people get unhooked.

#3 Go to where the drugs are made, and see if you can subsidize, or force the country where they are made to subsidize the farmers to grow other crops so that the financial incentive is lost. Have them grow rice or corn or sugar or anything else that does well within the region. Obviously this means pretty much all of South America.

Note that so far no bullets have been fired at anyone, and no one has gone to jail, regardless of their color, using these suggestions.

#4 increase federal spending to states so that they may fund their local law enforcement to be better equipped to deal with violent drug trafficers or violent offenders. Basically put the DEA in the hands of the states. Not every state has as bad a problem with drugs as say, the city of Miami does, or the State of california does.

#5 Use the remaining funds that would normally be spent on a War on Drugs on a War on Turning To Gangs As A Way of Life.

Fund new afterschool programs, especially and including afterschool tutors, subsidize small businesses who hire teens that work atleast part time (who normally receive minimum wage.)

No matter what you can't stop determined and or addicted people from buying drugs. The best you can do is offer better alternatives and take away the incentives of joining gangs. Kids join gangs for a sense of belonging, protection because the police "don't go into that neighborhood" or for a chance to make some "easy" money. If there were more afterschool programs, WHICH WERE SAFE, subsidized local jobs which paid $10/hr or something close to a MINIMUM LIVING WAGE (note that the current minimum wage pays well below the Federal Poverty Line,) I think you'd see a big big big decrease in kids using drugs, gang proliferation, kids doing poorly at school, and many other social ills.

A kid comes home to an empty house because his parent(s) are working two jobs to keep the heat on and "food on the family." That kid has nothing to do but hate / resent his status quo. This is broken and needs changing.

[David A. Spitzley]

Hey, NinjaPlease, any chance you're a Green? Because if not, we could defintely use you...

[Arun Khanna]

It's a very good paper. People who are claiming it was common knowledge won't know good research if they tripped over it.
I think states should consider providing free detox (for drugs) clinics. School presentations by drug addicts who have been ravaged by hard drug use would help make an impact on teenagers who might try out drugs otherwise.

[Walt]

I'm with Atrios on this one. Based on the summary, I'm having trouble seeing what's new.

[Alan]

One of the reasons for making drugs illegal is to try to stigmatize them, in the hope that the prohibition will reduce demand as well as supply. Economists seem to find this idea too sociological, but there are pretty good empirical examples of its effectiveness. For instance, the ban on the sale of ivory by CITES was designed to cut demand by bringing social pressure on consumers. I recall an article in the Journal of Economic Perspectives at the time suggesting the ban be used as a case study of the ineffectiveness of such restraints on the market, since there was no doubt that it would simply raise the price of illegal ivory and thus promote elephant poaching. In fact, the price of illegal ivory fell, poaching declined, and neither has regained its prior levels. My impression is that the demand for drugs was as much affected by its destigmatization in the 1960s as by the choice of law enforcement measures.

[Cranky Observer]

> They just haven't realized that this is what
> a "successful" drug policy produces; drugs
> that are expensive and stigmatized so that
> their use is relatively limited.

Everything I have observed in my teenage and adult lives, and now the teenage lives of my children and their friends, tells me that among Western males:

75% will ingest mood-altering substances from time to time, either occasionally or regularly.

25% will ingest stronger mood-altering substances, occasionally to excess and occasionally damaging their bodies somewhat in the process

1-3% will regularly ingest excessive quantities of mood alterating substances, damaging themselves and those around them.

And that these percentages appear to be fixed, at least for the 4000 years of human history for which we have any reasonable records. In other words, no matter what the cost and what the control regime, you will still get 75% having an occasional beer/toke and 1.5% destroying themselves.

This must be as apparent to policy makers as it is to me, leading me to think that the love of draconian laws and enforcement / insider contract buckraking / putting lots of black men in jail arguements are really what is involved here, and nothing to do with microeconomics.

Cranky

[kvris]

The common knowledge is very much based on empirical evidence. Many of the people who have been engaged with questions regarding narcotics policy are not idiots. For an example, where basic arguments (including inelasticity of demand) are made, see this:

http://www.afsa.org/fsj/jan02/reuter.cfm

The author is a well known academic authority on drug enforcement.

It may be that Becker et.al do have something completely new, but this is not obvious from what I've seen (and this may even be my lack of competence). However, given the expertise of many here, I would be glad if someone could point out exactly what is this non-obvious stuff.

[NinjaPlease]

I voted green in '04, but my wife is a psychologist, and I have a strong interest in human behavior.

I'm not sure who I'll vote for in '08, but I sure as hell am not voting for a Republican Congress unless they call for CONDITIONAL FREE TRADE, instead of carte blanche smash the working man free trade as has been prescribed by the executive branch & big business since atleast Bush 41. We learned nothing from the economics of Reagan years apparently.

It is a hell of a lot easier and less costly to give people a better choice than to simply police the hell out of them. Positive reinforcement would have so many more benefits--with far reaching economic effects:

less jails

better educated kids who will study harder and get better jobs

less gang violence

teens will have jobs and money to buy things. Teen don't go to China to invest their earnings or keep them there as "unrepatriated funds." They will spend them locally, further increasing the local economy. If black / hispanic (don't worry I'm of Cuban descent, i can use that word) neighborhoods are depressed having people spend money IN THOSE NEIGHBORHOODS will pull them out of economic depression.

Funding research into getting people off of drugs will help by simultaneously reducing crime and putting them back into the work force.

Seizing the assets of drug cartels or corporations or crime syndicates will spell out a pretty clear message: stay the f$ck out of the USA, your money is not safe here and must be heavily laundered to get into the USA, increasing their costs and cutting their profit margins. It's hard to run a distribution cartel when you can't pay your sellers.

Subsidizing foreign governments to grow other crops instead of drugs will allow the peasants who harvest the crops a chance to sell goods that don't kill people. I'd rather that they grow pineapples or sugar or alfalfa or coffee than cocaine or opium.

This last statement won't work everywhere, like Columbia, for instance, but I bet it would help Mexico and maybe Bolivia.

[Aussie]

A) Bomb Bolivia and Columbia with vast amounts of herbicide

b)Loosen wiretap laws so that surveillance can be me made allot easier. Australia's wiretap rate is 35 times that of the US (per head of population) and roughly double in number (with only 20M people) and we don’t seem to suffer for it.

c) Legalize Pot and Ecstasy and stop wasting your time with it. In Australia crowd control and incidence of violence have dropped dramatically since ecstasy became available it has become the drug of choice for NYE revelers , an Assitant Commissioner in NSW the largest state commented that incidents of violence had dropped by 90% in the last 10 years, a situation he attributed to the change in young peoples drug taking habits.

d)Loosen laws on search , in Australia drug dogs are employed to provide non invasive search capabilities to police. Cocain in Australia is now roughly $400 per gram compared to the US which I understand is selling for $100 per gram.

[NinjaPlease]

"and we don’t seem to suffer for it."

Are you speaking on behalf of all Australians?

By loosen, what do you mean? removal of oversite and record keeping, or removal of the requirement that a judge review the reasons for the wiretap in the first place?

The US uses drug dogs when going through custom's packages, but that's at the federal level.

My point about positive reinforcement is that drugs and gangs are the result of people being poor with nothing to do and with no positive future ahead of them. It's a cycle that needs to be broken, not a cold that needs it's symptoms covered up.

I don't know if you're serious, but serious opinions I've heard from uninformed / mislead GOP supports leave nothing to surprise now, but bombing columbia and bolivia with vast amounts of herbicide would cause those countries to starve and create a new enemy to fight, insurgents from south america.

No more enemies, please.

Less poor people staying poor please.

More better jobs please.

No more exporting poverty to the 3rd world via Free Trade agreements please.

[Roger Bigod]

Lumping all "drugs" together for policy considerations is similar to lumping together "weapons of mass destruction". In both cases, it's a ploy to demonize and blur thinking rationally.

In the case of "drugs", there are markedly different policy considerations between those that are compatible with a normal life-style (tobacco, cannabis, psychedelics) and those that lead to drug-seeking behavior that screws up job performance and carrying out family duties (alcohol, cocaine, amphetamines, opiates). There is general agreement that the latter group are public health problems and therefore legitimately fall under the common law "police power". But it's simple-minded to characterize them as having a fixed demand curve, however. Demand is elastic for casual users and inelastic for those who are "hooked".

We can go through the exercise of choosing policy that minimizes the economic damage, and it's difficult to fault the general choices society has made, although there are problematic issues like the severity of criminal sentences.

It seems difficult to make a public health case for cannabis and the psychedelics. Arguably, the laws criminizing their use are sumptuary laws and are detrimental to general respect for law.

[Dubblblind]

The federal government's position on cannabis is pathological as demonstrated by it's determination to trump state medical marijuana laws which serves no purpose except to increase suffering. Additionally, it has been known for decades that when pot is prevalent on the street crime goes down and when pot is scarce the movement to harder drugs increases crime yet government has been increasingly targeting simple marijuana possession. Insisting on continuing to make possession a crime and filling our jails with such offenders is counterintuitive and a waste of taxpayer money, oh wait, privatization of prisons is big business, never mind.

[dearieme]

Didn't the Prohibition adventure teach the essential lessons?

[Roger Bigod]

It's not clear that treating cocaine like we do alcohol would be a better policy. Consider this hypothetical: we have a product that usually causes no problems for consumers, but in about 7% of them there's an allergic reaction after a few months of use that causes them to be unemployable and incapable of fulfulling family and social obligations. (The 7% is from a study of powder cocaine mentioned in Scientific American years ago.) Would we permit the marketing of this product, even with warnings? Even with a tax that covered the cost of treatment? Of lost productivity? What if the appropriate level of taxation is so high that a black market develops?

I'm a big fan of economic analysis applied to policy questions, e.g. Calabresi's "Cost of Accidents". But the "hard drug" area is one where the numbers may favor a policy of criminization. The problem with the work of Becker et al., at least as presented here, is that it assumes a single demand curve. A better model is that there are two demand curves -- elastic for casual users, inelastic for people whose neural switches are flipped to the compulsive drug seeking mode.

Like I said, the issue of soft drugs is diffeent. It's difficult to come up with evidence for a public health problem, and in particular one that justifies felony convictions and prison sentences. It looks like one group in society oppressing another -- slavery without the rational economic calculation of benefit on the part of the slave owners, and hence more gratuitously nasty.

[Roger Bigod]

It's not clear that treating cocaine like we do alcohol would be a better policy. Consider this hypothetical: we have a product that usually causes no problems for consumers, but in about 7% of them there's an allergic reaction after a few months of use that causes them to be unemployable and incapable of fulfulling family and social obligations. (The 7% is from a study of powder cocaine mentioned in Scientific American years ago.) Would we permit the marketing of this product, even with warnings? Even with a tax that covered the cost of treatment? Of lost productivity? What if the appropriate level of taxation is so high that a black market develops?

I'm a big fan of economic analysis applied to policy questions, e.g. Calabresi's "Cost of Accidents". But the "hard drug" area is one where the numbers may favor a policy of criminization. The problem with the work of Becker et al., at least as presented here, is that it assumes a single demand curve. A better model is that there are two demand curves -- elastic for casual users, inelastic for people whose neural switches are flipped to the compulsive drug seeking mode.

Like I said, the issue of soft drugs is different. It's difficult to come up with evidence for a public health problem, and in particular one that justifies felony convictions and prison sentences. It looks like one group in society oppressing another -- slavery without the rational economic calculation of benefit on the part of the slave owners, and hence more gratuitously nasty.

[BillCross]

1. it's Colombia not Columbia not that it's a big deal except to those from Colombia (not me).

2. Drug use numbers essentially track the population demographics, as does dealing (I think), but jail time and felony convictions are heavily waited to minorities. i always thought this was part of the plan to destroy the Democratic party (or at least it's minority branches) by combining the unequal enforcement with felony non-voting laws

[piotr]

Parhaps there should exists a concept of legal harmful goods, with market rules that would differ from others.

Number one, as they are declared harmful, consumers would not be eligible for damages.

Number two, marketting efforts could be prohibited, or more precisely, extremally regulated. Sellers could post the products list and prices, but broadly understood advertisements would be prohibited. Perhaps the sellers should be state monopolies as it is with booze (except for beer) in PA.

Number three, taxes could be levied and directed at education, treatment etc.

About product elasticity: clearly, even if booze or drugs were free, a substancial proportion of the people would not touch the stuff, or use it with moderation. E.g. when free beer is offered to a gathering of scientist from my research are, the meeting ends with the participants being remarkably sober. Alcohol in general is very cheap and addiction, while it is a problem, is not a rising problem, and the average consumption is falling. Liquid cement is a similar example.

When we estimate success or lack of it in the WOD, we must give some weight to the loss of liberty. E.g. 100k for a year of incarceration of the society cost, first, the damage to the incarcerated person, etc. (How much for an accidental killing of a neighbor of an appartment where police was searching for drugs? 1M? 10M?) Perhaps one could check at what relative prices of liberty to health WOD would be a success.

[Roger Bigod]

There already exists a category of harmful goods which are permitted, but get special legal treatment. One aproach is Calabresi's, which looks at the cost of the bad outcomes intrinsic to an activity. In the case of alcohol, cocaine, amphetamines and opiates, this is the fact that some users go from casual use to intense drug-seeking behavior that wrecks their lives. The economic assumptions of microeconomics don't apply to those people. They question for policy-makers is whether to ban the drugs or discourage their use with measures like taxes. A tax that covers the external social cost of the damage has the merit that society at large isn't subsidizing the activity. In the case of alcohol, one study I've seen suggests that the tax doesn't cover the damage, but it may come close. In the case of the other drugs, the damages are arguably so huge that taxes would lead to a black market not terribly different from the present situation. If a product caused severe damage to 7% of its users, without corresponding benefits, it's difficult to say that banning is a totally irrational response.

Back in the real world, there are several reasons to fault current drug policy on hard drugs. The effects of the criminal justice system on the poor, especially African-Americans, are terrible. Drug maintenance programs for heroin addicts are another issue.

If we want to use an economic approach like Becker et al. propose, the place to start is with cannabis and psychedelics, since they don't have the feature of disrupting behavior in the way that "hard" drugs do.

[Scott Brison]

Even a police state would fail to stop drug use. Jails and prisons are, in essence, police states and we cannot keep drugs out of them, so why do we think that we can control drugs in a free society.

The problem is that most people have a flawed model of drug abuse. The prevailing wisdom is that choice is involved, and that fear of punishment will be an incentive to not use drugs. These people also think that prevention programs, such as DARE, will have an effect. DARE fails, as do other prevention efforts, because drug abuse is principally a problem of a genetic predisposition to addiction. If drug abuse is ever solved it will be in the laboratory by scientists and not on the street by cops.

Drug abuse is a medical issue not a legal issue. All drug laws do is create incredible profits for those who distribute and sell drugs. If we legalized drugs, organized crime would be dealt a severe blow and we could spend all the wasted dollars from the War On Drugs on genetic research and treatment of addicts.

[Denny Soinski]

In my opinion, one of the reasons “why the war on drugs is hard to win” is the mixed messages that exist in our society about alcohol.

Simply put, how can something as prevalent, accepted, and accessible in our society be so harmful AND illegal when consumed even in moderation?

Stated differently, consider the thousands upon thousands of bars and taverns in the United States. Now add to this list the restaurants, night clubs, sporting events, festivals, state fairs, hotels, casinos, carnivals, etc. where alcoholic beverages are regularly served. Finally, add the grocery stores, liquor stores, beverage stores, the Convenient Food Marts, the 7/11 stores, and the state stores where a person can purchase as many bottles, cans, and cases of alcoholic beverages as he or she desires.

The point: drinking alcohol is pervasively and intimately engrained in our society. Yet in all 50 states, driving with a blood alcohol level of .08% will result in a DUI or DWI if the driver is caught by the police. Something obviously is not right in our society and the way in which it views alcohol. If drinking two or three alcoholic drinks per day is considered dangerous to one's health AND can result in a DUI or DWI-related fatality, perhaps it's time that the number of bars and taverns is significantly reduced or eliminated. If drinking can lead to alcoholism by so many people in our society and result in severe health problems and alcohol-related injuries and fatalities, maybe alcohol should not be sold in the above list of stores and business establishments.

[Addiction Information Junkie]

Your post entitled “Why the War on Drugs Is Hard to Win” triggered some of my thoughts on alcohol and drug addiction.

Many times I have read comments such as the following regarding drug and alcohol abuse: “As with all drug prevention efforts, the battle against drug addiction and alcoholism should be fought with education.”

While I am 100% pro-education, especially when it comes to drug and alcohol abuse prevention, I don’t think that education is the only solution or the only weapon that can be successfully used in the battle against drug and alcohol abuse. Let me explain.

With respect to alcoholism and alcohol abuse in higher education, for instance, many reactive AND proactive measures have been initiated at some colleges and universities that have reduced the availability, acceptability, and irresponsibility of alcohol use on and off campus. The result: a noticeable, if not a significant reduction in alcohol-related problems manifested by students.

What are some of these measures? Establishing immediate consequences for excessive drinking, disciplining repeat alcohol abuse offenders, notifying parents about their children's drinking activities, eliminating mixed messages by college administrators about alcohol (for instance, removing alcohol advertisements from stadiums and from sports brochures), informing students about the long-tern negative consequences of alcohol abuse, increasing alcohol-free social and recreational activities that are attractive to students, having college administrators talk to the owners of local drinking establishments so that minors and/or intoxicated students are not served alcohol, and monitoring the drinking activities in the sororities and fraternities.

I used the above college “alcohol abuse” example as an illustration of the proactive and reactive measures that can be generalized and used in other applications. Having said this, I am also in agreement with “educational” approaches to the war on drugs that focus on finding a way to help people escape the trap of addiction as well as providing effective treatment to all who need it.

I still assert, however, that the above proactive and reactive measures, most of which are NOT education-based, are needed to compliment educational approaches. Why? I am enough of a realist to believe that even if medical research eventually discovered viable ways to escape addition and if the medical community offered effective treatment to all who needed it, there will always be those who, for whatever reason, will choose to disregard medical warnings, ignore their health, and who will discount common sense as they involve themselves in alcohol and/or drug abuse.

In closing, I wish to point out that the definition of a word has to be broad enough to include relevant information yet exclusive enough not to include everything. If the proactive and reactive measures outlined above are included under the umbrella of “education” (as implied by many alcohol and drug experts and professionals who use education in an all-encompassing manner), I assert that the term is too inclusive to be relevant.