Thursday, May 5, 2011

Narcotics And The Law Of Supply & Demand

Given the new fiscal reality that our current weak economy is causing, some are beginning to rethink the economic costs of the "War on Drugs". This piece over at NPR looks at an argument that making drugs illegal, increases drug dealer's profit margins. From the story:

The academic argument against drug criminalization goes like this.

When you make a drug illegal, you make it harder and riskier to produce. That makes it more expensive.

But demand for many drugs is what economists call inelastic: No matter what drugs cost, people will still pay. So making drugs more expensive through criminalization just sends more money to drug dealers.

This brings up an interesting argument, would legalizing, or at least decriminalizing drugs reduce the profits in the drug trade and would the benefits of a less profitable drug trade be offset by any increase in societal costs should drug addiction increase?

We've already seen talk that the cost of incarcerating drug offenders is too high. I'm glad to see this conversation taking place more and more. It may just be cheaper and a much better public policy to treat drug addiction as a mental health problem and not as a criminal one.

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