ECONOMICS EXPLAINS WHY WAR ON DRUGS IS HOPELESS

TERRE HAUTE-- It's gotten to the point that when I hear of a tragedy,
scandal or disaster, I find myself, after the initial shock, anger, or
sadness wears off, worrying what those in government will do in
response to the problem.

Lawmakers and other government officials want to be seen to be doing
"something" in the wake of a disaster, scandal or widely perceived
problem. Unfortunately, the laws they pass often create new problems
that will eventually result in new laws, and on, and on. One example
of this may be in the current legislative steps being taken to combat
the "methamphetamine epidemic" - the latest front in the government's
decades-old war on drugs.

It's possible that the steps being taken to combat meth are creating
new problems and it's also quite possible that the meth problem itself
has its roots in the government's policy of drug prohibition.

Without a doubt, methamphetamine is a very dangerous and harmful drug.
Its effects are disastrous for users and those exposed to "meth labs,"
including, very often, children.

But, in the same way alcohol prohibition resulted in people resorting
to homemade and often dangerous "wood" alcohol, drug prohibition may
arguably have led to growth and widespread use of homemade and
dangerous meth.

"The similarities between so-called 'bathtub gin' and modern meth are
inescapable," writes Reason Magazine's Radley Balko. Most "home
brewed" alcohol dried up after Prohibition was repealed, Balko notes,
adding that the same would likely happen to cruder illicit drugs, such
as crack cocaine and meth, if conventional amphetamines were less
strictly controlled.

One fairly recent step lawmakers eager to "do something" have taken in
light of the meth "epidemic" is to make the purchase of cold medicine
and other ingredients used in making meth more difficult to purchase.
Buyers of certain cold medicines now have to show an ID, sign a log
and give their personal information to a clerk.

The information eventually makes its way to local authorities.

Indiana law enforcement officials say these new laws are working in
the battle against meth. Since Indiana, following Vigo County's lead,
imposed these sorts of restrictions on cold medicine purchases, the
number of meth lab busts in the state has fallen 25 percent, according
to Indiana State Police. Busts in Vigo County are also noticeably
down. But it's not at all clear these new restrictions have improved
matters in the bigger picture, nor is it clear they have even reduced
the quantity of meth in the state.

The average street price of meth has remained unchanged for the past
couple of years, according to Indiana State police drug enforcement
officials.

Assuming there has been no drop in statewide demand for the drug, this
indicates the supply of meth in Indiana has remained the same.

"Restricting [sales of meth] ingredients just makes for bigger
importation issues," said Lt. Lori Petro, commander of the Indiana
State Police Meth Suppression Section. "If we can't make it here in
Indiana we've got to get it in somehow - it's supply and demand," she
said. Much of the new meth getting to users in America now is coming
from Mexico - and much of this meth is more potent than the homemade
variety, meaning, according to Balko, it is creating more addicts as
well as a nationwide criminal distribution network.

Economics helps us understand why the war on drugs is
hopeless.

First, by outlawing a product that people want, you cause its price to
increase because of reduced supply and greater difficulty obtaining
it. This means that a product that may be inexpensive to grow or make,
such as cocaine, can suddenly have a street value many times its costs.

As a result, profit margins in the illicit drug business are
astronomical. Indeed, every "victory" in the drug war is really
setting the stage for more failure.

For instance, when drug agents make a big cocaine bust, they reduce
the supply of cocaine, drive up the profit margin and therefore
attract new, often more efficient (and potentially more violent)
suppliers into the market.

In addition to all this, the drug war is also hugely
expensive.

In 2001, according to the Economist magazine, America's war on drugs
cost $35-40 billion per year in taxpayer dollars.

It has also led to damaged families and lost productivity when
nonviolent drug users are thrown in prison. About one in every four of
the approximately 2 million Americans in prison today is there because
of a drug offense - up from one of every 10 prisoners in 1980, when
the drug war was about to begin.

In addition to astronomical costs of keeping this many people in
prison, this also means less room in prisons for violent criminals.
Finally, the drug war is necessarily an assault on personal liberty.
Because drug transactions are conducted between consenting parties,
there is no "victim" in the sense that a robbery or other violent
crimes have victims.

Because neither party feels victimized by the crime, the only way the
police know of a drug transaction is through some sort of spying. This
opens the door more and more to police searches and often seizures of
private property and other violations of the basic right to be left
alone.

Drugs can be dangerous, addicting or both, but so can alcohol,
nicotine, caffeine and even fatty foods.

Once governments decide they should protect us from ourselves, it is
hard to see where the scope of their authority ends.

The late Austrian economist Ludwig von Mises summed things up nicely.
Long before the "meth epidemic" emerged, he wrote, "It is a fact, that
some people harm themselves and their innocent families by consuming
narcotic drugs. ... But once the principle is admitted that it is the
duty of government to protect the individual against his own
foolishness, no serious objections can be advanced against further
encroachments." These "encroachments" could easily be extended to
include nicotine, alcohol, and even the "mischief done" by bad books,
plays or ideologies, he wrote. The drug war is and always has been a
lost cause.

Its casualties continue to be innocent people caught in drug violence,
victims of crimes committed to pay for drugs made wildly expensive by
prohibition and the continued erosion of everyone's right to live
peacefully and according to his own rights.

The best way to destroy drug gangs, drug cartels and drug crime would
be to end drug prohibition. No other steps will have a significant
impact on the violence, waste and crime associated with illicit drugs.