Then, after Prohibition really kicks in, what Henry Smith Williams sees is two massive crime waves. Firstly, drugs are transferred from people like him to armed criminal gangs. These gangs are violent and jack up the price massively — I think the figure is 1000% — because you have to pay people a premium to take the risk of going to prison in order to sell it. Then, to pay these massively inflated prices, you get the second crime wave, which is people who previously bought their drugs at low prices from pharmacies suddenly stealing or prostituting themselves to pay for it. He also notices a huge increase in the death rate among addicts. So all sorts of changes happen, and, having previously been very unsympathetic to addicts, he starts thinking, ‘We’re really destroying these people.'...
The other fascinating thing about Drug Addicts are Human Beings is that he talks about why drugs were banned in California. The loophole of doctors being able to prescribe drugs to addicts is shut down state by state, and California was one of the last holdouts, partly because politicians there were quite brave. Henry Smith Williams reveals the story of why it was eventually shut down. I went and looked at the archives of the court case involved. It turns out the Chinese drug gangs in California were really pissed off, because in Nevada they had shut down medical prescription, and so drug addicts had to go to the drug gangs to get their drugs. In California they could still go to the doctor, so the drug gangs bribed the narcotics police to introduce the drug war in California. What this tells us is that, right at the start of the drug war, criminal gangs were paying for it to be introduced because they’re the only people who win from it. They’re the beneficiaries.
For me, it was fascinating seeing the same dynamic at the end of the drug war, when I interviewed the people who led the Colorado marijuana legalisation campaign. They would make the case that we should legalize marijuana because it would bankrupt the cartels. But Steve Fox, one of the leaders of the campaign, explained to me that people in Colorado were really scared, they thought the cartels would threaten them or even kill them if they made that argument publicly. It’s fascinating to see, both at the beginning and end of the drug war: Who wants it? Who wins from it? Who benefits from it? It’s armed criminal gangs. For everyone else, it’s a disaster.The war on drugs increases the costs of supplying the market, due to the risks of imprisonment or fines for sellers. This in turn substantially raises the equilibrium price of drugs. Another reason for the increase in the costs of supply is the risk to sellers being a victim of murder or violence (more likely from other sellers than from buyers or the police). As Hari explains:
The best way to explain it is like this: if you or I go to the local off-license [liquor store], and try to steal the beer or vodka, the owner will just call the police. He doesn’t need to be violent or intimidating. If we go up to the local coke dealer or the local weed dealer and try to steal their product, they can’t call the police, because the police will arrest them. So they do have to be violent and intimidating. The sociologist Philippe Bourgois says that prohibition creates a culture of terror. Charles Bowden, who wrote Murder City, talks about the war on drugs creating a war for drugs. Because drug dealers have no recourse to the law, they have to establish a reputation for being intimidating and violent, so that no one will dare to take them on. This massively increases the murder rate, as they have to establish and maintain their patch by force. Milton Friedman, the Nobel prize-winning economist, calculated there were an additional 10,000 murders each year in the United States because of this dynamic.The article has a lot more of interest, including on drug decriminalisation and rehabilitation in Portugal:
In 2000, Portugal had one of the worst drug problems in Europe. 1% of the population was addicted to heroin, which is mind-blowing. Every year they tried the American way more: they arrested more people, had more people in prison and the situation just got worse. One day the prime minister and the leader of the opposition got together and said, ‘We can’t go on like this, what can we do?’ So they set up a panel of scientists and doctors to figure out what would genuinely solve the problem. They agreed in advance that they would do whatever the scientists recommended, because it took it out of politics.
The panel went away for a year-and-a-half and came back and said: Decriminalise all drugs, from cannabis to crack, but — and this is the crucial thing — take all the money we currently spend on arresting and imprisoning drug users, and spend it on the lessons of Rat Park. Let’s turn addicts lives around, let’s help them to reconnect.Decriminalisation lowers the cost of supply, while rehabilitation decreases the demand. Overall the price of drugs will fall (which substantially lowers the incentive for criminal gangs to be involved in distribution), but we can't say a priori whether the quantity of drugs traded will increase or decrease. One study (PDF) by Caitlyn Hughes (UNSW) and Alex Stevens (University of Kent) finds increases in drug treatment, decreases in drug-related deaths and public health improvements, as well as "a shift in drug use patterns, with increasing use of cannabis and decreasing use of heroin", which supports the lack of a clear pattern in changes in quantity.
Again, I encourage you to read the whole interview with Johann Hari.
Update: I almost missed the obvious tie-in to Paul Quigley (emergency doctor and clinical toxicologist at Wellington Hospital) calling for the legalisation of MDMA (the main ingredient in the drug ecstasy). Can we hope to follow Portugal's lead?
[HT: Marginal Revolution]
More on the war on drugs: