Cut Them a Check

On an otherwise boring lunch break, listening to one of my favorite radio programs, I heard a conversation about drug legalization unravel. The general consensus of the hosts and the callers seemed to be towards some kind of legalization or decriminalization. About the only skepticism towards this arose when a supposed DEA agent called in. His claim centered around the current slate of drug-trafficking criminals; particularly those partaking in violent clashes in Mexico. He argued something to the effect that if we took the (black) drug market away from them they'd start engaging in more violent criminal activities (robbery, hostage-taking, etc.) to get their money. Of course, I didn't have the chance to directly engage the caller to see how sound or authentic his hesitations were. But, inspired by good-will-arguing from the likes of Bryan Caplan, my immediate thought was...

"Well, then just cut them a check."

The economic arguments against prohibition are prominent if not well-known. There is a high demand for a certain prohibitive substance. It's prohibition reduces supply to near-zero (legally). High demand and low supply creates an incredibly lucrative black-market for said good. Criminal syndicates form (naturally) to settle disputes and supply protection. Criminal organizations that arose during alcohol prohibition would be an excellent example.

When those substances are legalized, it opens the distribution system to the whole market. Entrepreneurs bolster mass production. Supply rises. Criminals can't effectively compete. Syndicates see black market revenues plummet. This is largely the story of the end of alcohol prohibition in the United States.

So, the agent's argument would demand that these criminals would just resort to other forms of crime. To this I say both yes and no. I would like to point out that the crime syndicates involved with the bootlegging of liquor were incredibly crushed by the legalization of alcohol. And to the extent that they still exist at all, you'll quickly notice that they are receiving most of their revenues by offering a market in other prohibitive goods (drugs, gambling, etc.). But let's put that point aside for the time being.

One thing we have to remember is the ever-true economic point that decisions are made on the margin. Getting involved in drug-running (depending on where in that ladder you happen to be) has a particular cost and reward associated with it. Even if we hold the average financial benefits to be roughly the same (regardless of the nature of the particular racket you're engaged in), the cost is certainly not. I would venture to guess that there are a great many more people, by several factors, that would be willing to engage in the voluntary trade of illicit substances for a certain payoff than people willing to engage in murder or kidnapping for that same payoff. And, again, that's assuming the same general payoff. I'm also willing to venture, again using some basic economic reasoning, that if violent crime like that was as lucrative (given the costs associated with it) that such syndicates would already be doing so with much more frequency.

But, for the sake of this particular point I have in mind, let's just assume that violent crime is much more lucrative (beneficial) than the current trade. So now we're confronted with a group who will engage in precipitously violent acts to get the money they're seeking if we take away the drug market. So let's take a look at a couple of broader points.

Firstly, what are the costs associated with a preemptive war on drugs. We have literally millions of incarcerations of otherwise peaceful people (some claim up to three quarters of all incarcerations are drug-related). Now, even if we were to completely ignore these absolutely egregious violations of human-rights regarding these arrests and detainments, think about all the money that's going towards not only enforcing drug-laws and catching such "criminals", but also to housing, clothing, and feeding all those we brutally incarcerate. Imagine what kind of upper-hand our policing agencies would have against whatever remains of violent criminals if they had all this funding and man-power freed up. Why isn't this factored in?

And, finally, my thought of last resorts goes something like this: Given the tremendous costs I've laid out above, both in terms of the rights of peaceful people and the dollars and cents that ultimately fund this massive anti-drug program, I can't imagine any way in which we wouldn't be better off by just writing such would-be-violent-criminals a check. Don't get me wrong, I think I'd be among the last people to defend aggression on anyone's behalf. But if that total lump-sum payment pales in comparison to the hundreds of billions of dollars that has been funnelled into the war against drugs, and if millions of families will be made whole by the non-incarceration of peaceful consumers of currently prohibited substances, then how or why would a person so worried about violent crime in the wake of legalization not support just subsidizing those people instead.

For the sake of all of us, once again, I say, just cut them a check.