20 April 2010

Seriously, who benefits?

Henry has just reminded us that many legal drugs are more harmful and more addictive than many illegal drugs. So if it's not the harmfulness, and it's not the the addictiveness that determines which drugs are banned and stigmatized, what is it? How do governments decide which drugs to prohibit, which to regulate as medicine, and which to allow for recreational use by adults? (In addition to harm and addictiveness, one might also look at the benefits of these drugs. Here again, it seems not to make sense that marijuana is illegal and and alcohol/tobacco legal since marijuana has some medical benefits and the two legal drugs have none.)

Henry hypothesized that the only beneficiaries are the triads, but I think his real point was that society at large doesn't benefit from current drug policy. But laws can be changed, so if governments choose to retain and enforce laws that don't benefit society at large, it makes sense to ask what subset of society might benefit from that enforcement. This is economic analysis, not conspiracy theory. I'll ask two questions: what groups, organizations, or individuals benefit from current drug laws? and do those groups, organizations or individuals have sufficient access to the political system to influence drug policy?

The obvious answer, if you look at the graph in Henry's post, is anyone who makes drugs that cause a relatively high degree of harm, have a relatively high degree of addictiveness, and yet are still legal. Anyone who makes these types of drugs (alcohol and tobacco are the most obvious from the graph, or from common sense) benefits by having free access to their target market, and also by having potential competitors (like anyone who grows marijuana) kept out the market. People who make or sell these types of drugs also benefit by being able to advertise. Makers of less harmful competitors are not only denied the right to advertise, but must compete with government propaganda demonizing their product.

It certainly looks like alcohol and tobacco manufacturers benefit from current drug policy, as do makers of prescription drugs that might compete with marijuana, like opiate painkillers. Doctors also benefit, since people often visit doctors for prescription drugs (though in HK this is unnecessary, since any drug made by a corporation is freely available without a prescription in the pharmacy, regardless of how harmful or addictive that corporate-made drug is).

So do these groups have sufficient access to the political system to get their preferences enforced by law? In the US, where much of these policies originated, the answer is clearly yes. Campaign contributions and lobbying create a situation where any group that is sufficiently well-organized and well-funded can subvert the public interest, provided the public isn't organized against them. This is largely the case with drug laws, though things are changing (in many states, the public is organizing for the public interest and things are becoming more reasonable). Things seem to be changing in the opposite direction in HK (enforcement is up, not down, and getting more oppressive). I'll leave it to readers to decide whether these groups have enough access to the political system in HK, since I'm new here.

It seems to me that the crucial difference between marijuana and alcohol isn't harm, but simply the fact that marijuana is easy to manufacture; it just grows. It doesn't require elaborate brewing processes, or plantation agriculture. So if it becomes popular, and people choose it over more harmful corporate-made drugs, corporations are out a lot of money. In any economic analysis, it makes sense to begin by following the money.


  1. Having a group to villainize is also strategically convenient for politicians. Cultivating already existing antagonism towards a certain group is an effective way to rally support for your campaign.

  2. Yeah for sure. If you read the legislative history of marijuana prohibition in the US, it's filled with racist, anti-Mexican hate speech. So scapegoating Mexicans was definitely useful for convincing people that marijuana should be illegal. But I'd argue that the racism was just the way of selling it to the public, and that the real reasons were economic.


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