Pubdate: Sun, 18 May 2014
Source: Bismarck Tribune (ND)
Copyright: 2014 The Bismarck Tribune
Contact: http://www.bismarcktribune.com/forms/letters.php
Website: http://www.bismarcktribune.com
Details: http://www.mapinc.org/media/47
Author: Edward Lotterman

'MEDICAL' MARIJUANA HAS ITS OWN ECONOMICS

A bill to legalize the sale and use of marijuana for "medical 
purposes" recently passed in my home state of Minnesota. Similar 
initiatives are under way in several other states, although passage 
is not likely for all.

But together with a similar law in California and recent legalization 
in Colorado following partial legalization or "decriminalization" in 
Washington and Oregon, there certainly seems to be a national tide to 
make cannabis use legal.

Social aspects of "mood-altering substances" are complex, to say the 
least. But what about economic ones? These certainly exist. Some 
libertarian economists, most notably Nobel laureate Milton Friedman, 
advocated legalization of marijuana use decades ago. So it is a 
legitimate topic for economic analysis.

The libertarian argument is that if there is some substance that 
humans want to use to increase their own satisfaction and no one else 
is hurt, laws ought not prohibit that, even if other people think 
consumption is immoral and even if use of the substance causes 
tangible harm to the person consuming it. Many economists who don't 
consider themselves libertarians, including me, agree with this in 
general terms.

The crucial issue, however, is whether there is harm to others. 
Another important consideration is whether the choice to use is an 
informed one. Or are potential users suckered by an "information 
problem" into starting frequent use that has far higher personal 
costs than they first realize, but that, given the physically 
addictive nature of many substances, is difficult to end?

If either of these conditions exists, legalization may decrease 
economic efficiency. In other words, society will see fewer of the 
needs and wants of people satisfied out of the same use of resources. 
Restrictions may make society better off.

Take the issue of externalities first. Using alcohol to alter mood 
pre-dates history. And it seems there always have been external costs 
of such use in the form of violence, destruction of property and 
decisions that waste resources made while in an irrational and 
misinformed state.

The broad social costs of alcohol consumption are enormous, running 
into the tens of billions of dollars. Lives are ruined, families 
sundered. Driving while intoxicated alone causes tens of thousands of 
deaths and many more injuries plus billions in property damage.

Governments spend further billions for police to control drunken 
people or for emergency personnel to clean up the aftermath. Yet, 
except for an experiment with Prohibition a century ago, we continue 
to allow use of alcohol, albeit with limitations, such as bans on 
sale to minors.

As a society, the consensus is that the external costs of a total ban 
on alcohol production and use are greater than tolerating them under 
regulated circumstances. Similarly, while we increasingly regulate 
tobacco consumption, there is little movement to ban its sale or use entirely.

Tobacco is interesting in that it may be even more addictive than 
alcohol or most currently illegal drugs. It also harms the health of 
nearly everyone who uses it. But for decades, if not centuries, the 
extent of such harm was not fully appreciated. The decision to use is 
often made at an age where true informed consent is not really 
possible. And there are some external costs, especially through 
second-hand smoke, although tobacco's externalities are small 
compared with those of alcohol.

The restrictions adopted are pretty much in line with what economists 
would see as the market failures. Bans on sales to minors address one 
"information problem." Health warnings or the pictures of cancerous 
organs required on packages in some countries also address the 
information problem. And bans on smoking in confined spaces cause 
some reduction in the external costs of second-hand smoke.

Advocates of varying degrees of legalization also argue that some 
illegal drugs, especially marijuana, provide positive benefits that 
are denied to society with outright bans. Among other things, 
cannabis can relieve glaucoma and the terrible side effects of 
chemotherapy. And there are other legitimate medical applications. As 
someone who was starting seven difficult weeks of chemotherapy myself 
just two years ago, I find this argument important. So do most other 
people, and that is why legalization for "medical" purposes is often 
the first step toward allowing broader use.

Marijuana, cocaine, meth, heroin and other illegal drugs all have 
external costs. But advocates of some degree of legalization are 
correct in noting that in many cases, the largest external costs are 
the result of the illegality, not the use itself.

Just as during prohibition, legal bans artificially boost the price 
and profitability of supplying a product. Trafficking on streets, 
thefts to support habits, bribing of public officials and violence 
between rival gangs all largely stem from prohibition rather than 
use. European countries that have adopted varying degrees of 
decriminalization have seen such problems drop, although not disappear.

The cost to government budgets of policing illegal drugs is enormous, 
as are the costs of prisons for the millions of people convicted of 
drug-related crimes, often ones of minor possession and use. 
Moreover, by branding millions of people as ex-convicts, we 
permanently harm their employability and hence their economic productivity.

Libertarians would add that economic efficiency is not the only 
consideration. So is liberty or individual autonomy. If an overweight 
economist with high blood pressure can choose to eat bacon when he 
wants, why can't someone else smoke a cigarette or a joint?

If so, why not let someone mainline heroin if they want? That is the 
uncomfortable question for many of us. Legalizing marijuana has broad 
support, but as the drugs get harder, public sentiment for less 
regulation wanes. But it seems clear that allowing "medical" 
marijuana is a step down the path to legalization of cannabis. And 
once that occurs, the argument for legalization or decriminalization 
of other substances will get stronger.

A final consideration is a global one. For years, we have 
strong-armed drug producing countries such as Mexico, Columbia, Peru, 
Afghanistan and Myanmar to crack down on producers. This has often 
imposed enormous budgetary and social costs on these countries. I 
worked at the fringe of drug-producing regions of Peru back in the 
1980s and know well how great those costs are.

Now, we are reversing course without any hint of consultation over 
this. Domestic politics usually trump international obligations in 
most countries, but we should not be surprised if the U.S. swing 
toward greater toleration of drug use causes some resentment in the 
affected countries.
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MAP posted-by: Jay Bergstrom