The Sticky Demand for Drugs and the Externalities of a Black Market
As has been shown countless times in history, from prohibition to the criminalization of marijuana, the removal of a legal market only accomplishes one thing: create an illegal one. Because customers in these markets are often addicted, their demand is sticky and won’t be eliminated by criminalization. In fact, more users could be drawn in. For an example of this we can look at cannabis usage in the 1960s and 1970s. In a 1969 Gallup poll, before the Controlled Substances Act of 1970 (CSA) when it was made illegal under the Nixon administration, only 4% of American adults said they had tried marijuana. In 1973, three years after the CSA, 12% of respondents to a Gallup poll said they had tried marijuana. That number doubled by 1977. While some consumers, sensitive to the danger and potential for prosecution, will be taken out of the market — the tradeoff is overwhelmingly net negative.
In the black market, the transaction becomes a much more dangerous one. In 2017, the National Institute on Drug Abuse estimated that more than 72,000 drug users died from an overdose. With reduced information about their suppliers in an illegal market, Customers cannot be certain of the safety of the products they purchase. In Black markets, it is incredibly difficult for customers to spread information about product quality — there is no Yelp! for cocaine purity. With this, we see more and more overdoses from customers not provided the full information on their purchase that they would have access to in a legal market.
In addition, suppliers brought in by the black market compete often in dangerous ways. Countless bystanders are killed by these suppliers in turf wars and the like, a massive negative externality imposed on people not engaged in the market for drugs. From the CDC WISQARS database, in 2015 7% victims of homicides in the reported states were bystanders, and an additional 10% of homicides were related to drug involvement. It is important to note that these statistics from the WISQARS database are not nationally representative.
All this is overlooking the problem of creating criminals out of otherwise law abiding drug users. Rather than allowing drug users to participate safely in the drug economy and receive help when they need it— they are put in jail. Once they are imprisoned once, the cost of committing further crime is greatly reduced. This is because they already have been blackmarked as felons and forced out of jobs where they could contribute meaningfully to society.
A publication by the Bureau of Justice Statistics reported that for drug offenders released in 2005, 24.8% were rearrested in the five years following their release for a violent crime and another 33.1% of those released were arrested for a property crime in the same period. These past drug offenders have been converted from potentially law abiding drug users to criminals that inflict a great cost on society in the form of violent and property crime. This cost doesn’t even include the $50 Billion spent on drug enforcement, estimated in a paper published by the Drug Policy Alliance in 2015.
The legalizaiton of recreational drugs would lead to large social benefit from greatly reduced violent and property crime, overdoses and spending on law enforcement. By allowing drug users to participate in a legal market, we can all live in safer communities and lose fewer of our loved ones to overdose deaths.
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