The drug policy debate does not need any new thoughts, but it desperately requires some new ways of thinking.
When it comes to drug policy, ignoring the advice of scientists and the 
existence of evidence is becoming a Daily Mail sponsored tradition for the Home Office. The decision to make a drug illegal, or to change a drug’s classification so that the penalties for possessing it are increased, is a tricky one. In economic terms it is a decision based on two types of ‘costs’: individual and social. The most widely cited reason for the government ignoring its committee of scientists (the ACMD), is fairly simple and sounds reasonable: whereas the scientists are experts at determining the individual costs of using a drug (health problems, including addiction), the government is better placed to assess the social costs (like violence, crime, use of public money etc). The problem is, most of the social costs that we associate with drugs, exist because drugs are illegal, not because drugs are drugs.
The international prohibition of drugs has been a disastrous failure by almost every conceivable standard – but even for those who feel this, there often remains a deeply held sentiment that illegal drugs are somehow fundamentally different from other types of market goods, that they are somehow inherently bad. There is a very good reason for this widely held belief, and if we find it and explain why it is based on faulty reasoning, then we not only show why prohibition is broken and doomed to failure, but we also show how such an incredibly expensive, ineffectual, and violence inducing set of policies can become self-justifying.
The following few paragraphs is a story, or a thought experiment; it is based entirely on an economic analysis of the creation of illegal markets and the enforcement of prohibition (using evidence from 1920’s alcohol prohibition in the US, and more recently, the US led, but internationally sanctioned ‘War on Drugs’).
It’s February in 2016, and toilet paper is made internationally illegal. Starting from tomorrow you will be fined heavily if found in possession of anything from one sheet to a roll and will go to prison if found with enough to supply (3 or more rolls). Only rolls of greaseproof paper are available to buy as legal substitutes in the shops, these are widely perceived as being terrible substitutes – what happens?
Well, we can assume that a sizeable proportion of the people who currently use and enjoy using toilet paper will be sufficiently convinced of its merits, and the change in its legal classification and the small risk of a fine will not put them off using it; so some significant demand will certainly remain. Those who are willing to take the risk of getting caught and going to prison (and these people will certainly exist) will quickly enter the market as suppliers, but because not many people are willing to take such a risk (giving the seller monopoly power), and because a risk like this becomes incorporated into the perceived 'cost' of doing business for the toilet paper seller (you expect to be paid a premium when you risk going to prison), toilet paper becomes significantly more expensive. In some parts of the world, after crossing several international borders, its price rises to 20-30 times that of its ‘legal price’ - leaving a handsome profit for the new toilet paper dealers.
There will be those consumers that can easily afford this new price, as well as those that will struggle to afford it. Of those in the latter camp, many will adapt their spending patterns, so they can keep buying toilet paper to the detriment of other things (car insurance for example). A minority of those who cannot really afford it, but still want it, commit crimes in order to fund the purchase of their next few rolls. Thefts and crime in poorer areas increase dramatically and police – whilst initially not particularly keen on the new toilet paper law – respond to the rising crime with an iron fist; fully incentivised to first target the easy to catch toilet paper users in poorer areas. After all, they’re probably criminals anyway.
Many of the toilet paper dealers, taking advantage of the lack of state regulation and the super-profits available to toilet paper dealing, start producing a roll of paper that looks the same and feels similar, but is actually made from second-hand asbestos laced wallpaper. This is much cheaper to produce, but does a lot of damage to the end user’s health. Some toilet paper users realise that this is happening, but cannot appeal to any legal authority to complain about this dangerous drop in standards and it is not noticed or reported upon; in order to tell someone in authority about the dangerous toilet paper you have been sold, you must admit to the crime of buying the toilet paper in the first place.
The government has absolutely no way of knowing what the quality of the toilet paper now in circulation actually is, and how much of it is now contaminated with asbestos. Buyers finding themselves angry at being sold inferior quality toilet paper have a problem: they have been sold a dangerous product under false pretences, but any attempt to settle this dispute directly with the dealer is likely to end in violence, and not just because toilet paper dealers are ‘violent people’.
Illicit markets are tense and they tend toward violence because the state cannot step in when disagreements arise. Without a guarantee in the form of consumer rights and with no formal way of resolving disputes, it is my word – or my fist/knife/gun – against yours. The very existence of toilet paper, it seems, is responsible for a huge rise in street violence.
On an international scale, criminal organisations in countries with weak or suggestible governments have started to build toilet paper factories and are quickly growing in size and power. Instead of hiding these factories, they will simply use some of the super-profits available from international toilet paper trafficking, and pay off the leaders in the government, the army and the police to ensure their impunity. Those that refuse to be bribed or those that challenge or report on the rise of the toilet paper cartels, will most likely have their families and loved ones tortured and killed. Toilet paper funds corruption, insurgencies and brutally violent cartels.
The few people who bother to ask why toilet paper was banned in the first place are branded as immoral anarchists, who do not understand how socially costly toilet paper is… who cares why toilet paper was banned, look at the violence, crime and death that follows toilet paper everywhere it goes. Banning it was the most sensible thing we ever did!
Fortunately, a clear and growing popular consensus that toilet paper prohibition, even by its own standards, has simply not worked. It’s incredibly expensive, demand has not been significantly reduced, and supply has gone through the roof.
This is where the ultimate trick of lazy prohibitionist reasoning really comes into play: the more that prohibition is enforced, the more violence, crime and poverty it creates. As toilet paper is always followed around by violence, danger and criminality, then toilet paper itself is obviously the culprit, so we must make it even more risky to supply, users must be punished even more severely, and we must put aside even more money to police its ban. Eventually, many countries take a brave and macho stand against this new menace, and announce that they are embarking on a war… on toilet paper.
This is of course absurd, there is nothing inherently violence inducing about toilet paper, just as there is nothing inherently violence inducing about most drugs (with the huge exception of everyone’s favourite legal drug, which is known across both the scientific and anecdotal worlds for its tendency towards creating aggression and violence). So why has this market for toilet paper become so crime ridden and violent? Because when you make something illegal, its associated social costs increase immensely.
Remember, we ban drugs and ignore the scientists because we believe the government is better informed than the scientists about the social costs of drugs; things like crime, violence and an increased tax burden. It now becomes clear that a huge proportion of these social costs are a direct result of the nature of the market, not the nature of the drugs. Let me repeat that in a different way in case our Home Secretary, Theresa May, has accidentally found herself reading this: the social costs that are linked to the vast majority of illegal drugs, are a result of their being illegal, NOT of them being drugs.
Once we understand and accept that the net effect of enforced prohibition on societies' welfare is at best ambiguous, and in most circumstances, and by most measures, almost certainly negative, the question shifts from being about whether drugs are good or bad (a pointless question), to how we can best create a set of policies which reduces the risks to the user, reduces the costs to society and reduces the influence of international crime syndicates. Viewed in this light, the current strategy – which has been a spectacular failure even by its own warped standards – appears to be tragically short-sighted and actively anti-evidence.
The drug policy debate is too important and has gone on for too long to leave it to be held to ransom by the lazy reasoning of a reactionary press and the political posturing of spineless governments. The debate must start from the premise that prohibition itself is costly to society, not from the unrealistic, unscientific and unjust premise that all drug use is bad and must be eradicated at all costs.