Harvard Economist: The Stunning Cost of the War on Drugs

Harvard economist Jeffrey Miron argues that prohibition is among the worst policies for curbing “irrational” drug use.

Most countries currently outlaw marijuana, cocaine, heroin, and a range of other drugs. These prohibitions first arose in 1914 when the United States adopted the Harrison Narcotics Act, and they expanded after World War I when the U.S. insisted that all Treaty of Versailles signatories adopt prohibition themselves. After World War II, multiple United Nations treaties further restricted the cultivation, trade, and use of those drugs other than for medical or research purposes.

Despite this long history of prohibition, however, policies towards drugs have lately been softening around the world. For example, several U.S. states have legalized marijuana for medicinal or recreational purposes, while Portugal decriminalized the possession and use of all drugs in 2001. Similarly, the Czech Republic has decriminalized possession and use of limited amounts of any drug. In 2014 Uruguay, one of the few countries to have never criminalized the consumption or possession of drugs for personal use, became the first nation to completely legalize marijuana. It is thus an opportune time to re-consider the wisdom of prohibition. I argue here that prohibitions do far more harm than good, so all countries should legalize drugs.

The key fact about prohibition is that it does not eliminate the market for drugs. Instead, history shows that prohibitions against drugs, alcohol, gambling, prostitution, and other goods and services mainly drive such markets underground. Prohibition potentially reduces drug use by imposing penalties on consumption and raising costs for suppliers, but the net impact on use is not necessarily large. A “forbidden fruit effect” might partially offset any reductions in use, and because black market suppliers operate in secret, they usually evade tax and regulatory burdens, offsetting some prohibition-induced secrecy costs.

Existing evidence indeed suggests that prohibition’s impact on use is modest. Though few societies have fully repealed their prohibitions, numerous “liberalizations” have been associated with small and sometimes undetectable increases in use.