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Illegal Drugs It’s the Economy, Man Review of Sex, Drugs & Economics Written by Diane Coyle Reviewed by Alan Jennings 3 Views on Drug Use • Drug use is Evil – War against drugs for drug-free society • Drug use is Illness – Medical Treatment – Social Programs • People should be Free to use Drugs – Show tolerance, – As long as it doesn’t harm others Premises Drug Use is Inevitable Premises Greek and Aztec used drugs In some Countries, • Up to half the population have used drugs illegally – Can something so popular be illegal? – Can so many criminals be meaningful? • Most people say the odd joint does not make a person bad or a criminal Drugs are not addictive Premises • In Switzerland, – 17% have tried drugs, 2% have used in last year • Vietnam Veterans used Heroin – Stopped when coming home • Drug consumption is much less in people over thirty • Hard drugs are addictive, – But many quit anyways Drugs use and Crime Premises • Most income for addicts comes from crime – More than 33% -Drug Dealing – More than 47% -Burglary, Assault & Prostitution • Illegal drugs use makes crime seem normal • Restricts ghettos from developing – Poverty, Violence Drugs as Market Item What has been observed: • Demand Price Heroin Price • Substantial Health Costs • Cash Crop for Countries – Normally Poor & Violent Premise Therefore Supply # of Deaths Government Intervention Economics • Penalties Affects Supply or Demand Supply Side Demand Side Harsh penalties for: Less penalties for users • Dealing People cut back use • Importing • Manufacturing More Risk Competition Decays 1. 2. 3. 4. Economics Prohibition reduces supply Competition is reduced as businesses leave Cost increase Near monopoly • • Formed by police and customs stopping drugs Enforced violently by existing drug dealers 5. Organized Crime spreads globally • Supported by high profits Externalities & Elasticity Economics • Private Choices cost society as whole • Reason for taxes on drugs (tobacco & spirits) – High public health cost supported by tax revenue • Elasticity – How much quantity is affected by cost? – No change, Price is inelastic, Tax affect is small – Changes, Price is elastic, Tax affects significantly Cost/Benefit Analysis Economics • Weighing benefits to losses gives insight into best solutions • Consider penalties relaxed or use sanctioned Benefit • • • • • More competition Lower price Less crime, Lower policing cost More taxes • • • • Costs More users More health costs Loss of productivity Leads to worse drugs Premises Response Premises are taken as fact for argument’s basis – No matter how unsubstantiated, false or harmful • Sources: – – – – Survey results Antidotal Generalizations Most completely unverifiable • Minority trying to enforce opinion on majority – Majority of Americans do not use illicit drugs – More position is spread, the more their own view is justified • Drugs are addictive – Drug use against all hazard shows irrational compelling force Economics Response • Government affect on Market – Clear example of punitive restrictions • Emergence of Monopoly – Demonstrates set of factors leading to monopoly – Ease of production not mentioned, • Undermines monopoly • Reasons for Government involvement – Treats taxes a revenue • Maximize drain on public • Ignores concern for citizens well being, only health Cost/ Benefit Analysis Response Other analysis is to result in Cost/ Benefit Analysis • Rightly commended as powerful tool • However, should mention discretion in evaluating – Costs and benefits should be weighed not just by money • Should qualify her conclusion is for her values – Has high value on government profitability – Has high value on independence – Has low value for individual burdens of addiction • Ignores broader impacts – Everything would have to then be designed for possible use by people under influence • Is currently done as a failsafe, but would then need additional line Conclusion Horrible, impersonal views used for analyzing in a skewed but useful manner Alan Jennings Coyle, Diane. 2004. Sex, Drugs & ECONOMICS: An Unconventional Introduction to Economics. Thomson Texere, New York, New York. Chapter 2. pp 8-16.
