THE ECONOMICS OF ADDICTION

An interesting phenomenon, observable in campuses throughout the
world, is the speed at which new ideas are accepted by university
students. Some professor or author writes a book, and soon his
particular theory is the norm, not the exception, on campus.

This tendency of students to attach themselves to the latest academic
fad can be beneficial, but it can cause social problems as well as
solve them. Consequently, it's important to remember that just because
an idea is new, doesn't mean it's progressive.

My chosen discipline, economics, isn't immune to this tendency,
despite it being known as "the positivist social science." Economists
often accept the popular consensus without questioning the premise on
which it is based.

Take, for example, the policies many economists advocate to deal with
the problem of drug addiction: they argue that the legalization of
addictive drugs would be socially beneficial.

Their reasoning goes as follows: illicit drugs are illegal, so
suppliers of the drug will demand a high price for their product as
compensation for the risks of going to jail or of death due to
gang-related activity. These higher prices in turn end up causing many
social problems: addicts engage in theft, prostitution and drug
dealing to pay for their fix, and the problem of addiction is spread
to every level of society.

Thus if anti-drug laws were removed, it follows that drug prices will
fall, and the crime associated with addiction and the black market
would end, making life better for both addicts and society in general.

While this argument makes sense in theory, it's based on the general
assumption economists make: that people make rational decisions to
maximize their long-term satisfaction. For most people this assumption
is reasonable, but can we really apply this condition to the addict? I
mean, how many people do you know who set it as a goal to become drug
addicts or who rationally choose it?

These activities are acts of desperation, not rationality. Addiction
is a disease; people who are addicted know that the high won't satisfy
them, yet their body demands that they use it.

Because of this fact, it's doubtful that legalizing drugs will lower
prices substantially, if at all, because an addict will demand drugs
no matter what the price. This would cancel out the social benefits of
legalization. Furthermore, there's a strong current of libertarian
ideology among legalization economist advocates, so we should be all
the more skeptical in accepting these conclusions as simply pragmatic.

Ultimately, prevention seems to be the best method of dealing with
addiction. But to truly make an effort to prevent addiction, we have
to ask questions that have uncomfortable answers: what social and
economic forces cause addiction? In any event, although legalization
of illicit drugs might, theoretically, ease the some of the symptoms
of the problem, they won't cure it. Instead, academics should advocate
policies that address the causes of addiction, like poverty, abuse and
lack of education.