ECONOMIC SCENE: WAR ON DRUGS IS UNDER ATTACK

If the war on drugs is indeed a battle of good vs. evil, then Satan is
gaining some impressive allies.

An open letter to the U.N. secretary-general, on the occasion of the
General Assembly's special session on drugs, asserts that "the global
war on drugs is now causing more harm than drug abuse itself."

Among the signers of the letter were Javier Perez de Cuellar, the
former secretary-general; Robert Strauss, the Democratic Party's
lobbyist-lawyer; George Shultz, the former secretary of everything to
Republican presidents, and even Walter Cronkite.

More striking from the parochial perspective of this column, the list
includes high-profile economists ranging from Milton Friedman (the
Hoover Institution) to Jagdish Bhagwati (Columbia) to Gavin Wright
(Stanford). On second thought, perhaps it is not so surprising. Most
economists these days are alert to the unintended consequences of
regulation. And in the case of drug policy, they do not have to look
far. "The harmful side effects -- everything from the spread of AIDS
to violent crime to abuse of civil liberties -- simply overwhelm the
benefits," said Jeffrey Miron of Boston University.

The only way to reduce illegal drug use is to reduce the supply or the
demand. Consider supply-side strategies first.

Common sense says the place to start is at the border, or even in
farmers' fields. But in this case, suggests Peter Reuter of the
University of Maryland's School of Public Policy, common sense is a
ticket to frustration. Smugglers of low-bulk drugs have adapted easily
to interdiction efforts, he says. Confiscation of large quantities at
sea or at the border has only modest impact on importers since the
value of the drugs outside the country is so much lower than the value
once they cross the border. By the same token, discouraging drug
production by subsidizing alternative crops is a fools' game. Drug
entrepreneurs can always afford to pay more since the cost of the raw
material is a minute fraction of the wholesale price of the delivered
product.

What about disrupting wholesale and retail markets on this side of the
border? It can and has been done through policing efforts -- though at
a cost that makes economists, as well as legislators and civil
libertarians, wince. With more than a half-million arrests annually
for marijuana possession alone, the bulk of police, prison and court
resources is now devoted to drug law enforcement.

Besides, Miron notes, for supply-side policies to work, drug prices
must rise. And if, as most economists believe, the use of drugs is not
particularly sensitive to price, the total value of drugs sold
actually increases when enforcement is successful. This breeds
ancillary crime as users steal to pay for their habits and dealers
fight over turf. If supply-side anti-drug policies create a vicious
circle of higher prices and more crime, demand-side policies should
lead to a virtuous one. Lower demand means lower prices, lower revenue
and less incentive to steal and kill. By no coincidence, then,
demand-reducing drug treatment and education have become the centrist
politician's mantra.

Reuter acknowledges that treatment is often cost-effective. But he
doubts that even the most dedicated treatment policy would reduce
addiction by more than one-third. Miron points to another problem:
pushing addicts off illegal drugs all too often pushes them into legal
ones -- methadone, alcohol and tobacco. "You have to be skeptical that
the benefits of treatment would exceed the benefits of simply
minimizing the adverse side effects of illicit drug use," Miron said.

For Miron the best of all possible worlds would be one in which

dangerous drugs are legal, with their use discouraged with taxes and
social pressure. But many people who buy arguments against the
flat-out prohibition cannot stomach policies that would probably lead
to greater drug consumption. For his part, Reuter argues that
legalization has become a straw man that diverts attention from the
messy task of reforming regulation. That might include the
decriminalization of drug possession without making it legal to sell
drugs for a profit.

Or the quiet abandonment of expensive border interdiction. And it
would certainly mean a more nuanced policy in which the use of
marijuana by adults ceased to preoccupy the justice system. Is the
world ready for a change in drug policy as usual?

Ethan Nadelmann, the director of the Lindesmith Center in New York,
which sponsored the open letter, is encouraged by the growing numbers
of very important people ready to take a stand in favor of a fresh
start.

But he doubts that the United Nations' own drug bureaucracy can lead
the way. "It's hard to turn that big boat around," he lamented.

Checked-by: (trikydik)