Reuters Drug legalization could reduce government costs and raise tax revenues, but opponents worry over health and social ills State governments facing massive fiscal deficits might consider a rather unusual way to alleviate those debts — through the legalization of drugs like marijuana and thereby ending the costly drug war. In a study for the Cato Institute, Jeffrey A. Just as important, drug legalization would translate into higher tax revenues generated by the sale of these newly-legalized products in the open commercial marketplace. Marijuana is already believed to be the nation's number one cash crop, exceeding the combined value of wheat and corn.
Every culture has a robust history when it comes to different types of drug use and each also has their own way of dealing with the substances.
No matter what our individual or societal views are when it comes to drugs, you have to appreciate the complexity of the world drug trade.
Humans have used various types of drugs through out our history. Department of Justice Bureau of Justice Statistics website, the amount of arrests for drug abuse violations has increased from just overin to well over 1.
Breaking these down to the number of arrests by type of drug law violations, we see that the crime of possession saw roughlyarrests in with an increase to over 1.
Putting it into more perspective, the amount of arrests in were almostadults and 91, juveniles. Inthe numbers increased to 1.
Based on this information alone, it is clear to see that the amount of money needed to curb drug use, manufacturing, and sales is enormous.
One can see just how much money is being spent this year, in real time, from the Drug War Clock on the Drug Sense website http: As of Sunday, November 15, at 3: This website makes their estimate based on the information from the Office of National Drug Control Policy.
With so much money being spent, one has to ask if the cost of curbing the behavior and not legalizing drugs outweighs the benefits of not curbing the behavior and legalizing drugs. Why is it so profitable? Simple, according to this survey: Other huge markups for other drugs were also noted.
Even with the markup, the worldwide market for illegal drugs is huge.
Actual numbers, of course, have to be guessed at because quantity of sales and prices are not known for certain. This high demand in the face of increased prices shows that the demand for drugs is inelastic. Another aspect addressed by the survey would be what would happen to the high demand if legalization occurred.
So, since they would spend less to get the same amount of drugs, this frees up more disposable income to spend on other things in the economy.
Economic Issues of Legalizing Drugs There is no way around it, drugs and drug use are ingrained human activities. Every culture has a robust history when it comes to different types of drug use and each also has their own way of dealing with the substances. Economic Issues of Legalizing Drugs There is no way around it, drugs and drug use are ingrained human activities. Every culture has a robust history when it comes to different types of drug use and each also has their own way of dealing with the substances. About $ billion of this revenue would result from legalization of marijuana, $ billion from legalization of cocaine and heroin, and $ billion from legalization of all other drugs. These estimates should be taken with several large grains of salt.
Another consideration to the mark-up of the drugs is the high cost of manufacturing and distributing the drugs. First, there is a very real danger of being caught by enforcement agents, as noted in the figures from earlier.
Second, the inherent violence that comes from being in the trade. With increased enforcement, the price of drugs increases. An increase in the price means that those that use and may be addicted to them would have to come by extra money to purchase them.
This may lead them to commit various crimes in order to get the money they need. So, with the decrease in price that would come from legalization, it would seem that drug related crime would also decrease.
Rent seeking in this case would be those involved with the manufacture and distribution of drugs are seeking to gain a monopoly advantage thru manipulation or exploitation rather than thru earning profits thru economic transactions. Another possibility for the violence would be insecure property rights felt by drug dealers.
Fear of being caught by enforcement agents, rent seeking, and insecure property rights all make the expense of illegal drugs increase. An increase in doing business causes a higher price in the product themselves.
The actual physical cost of transporting and selling the drugs would not be any higher than the transportation of any other product. If the drugs were legalized, then the cost of manufacturing and distributing would decrease, which would cause the price to fall.
So, why would anybody do it? The payoff must be substantial enough to make it worthwhile. The survey shows that this seems to hold true all the way from the dealers on the streets to the large cartels that bring the drugs to the U. If drugs were legalized, this would allow most countries to produce and distribute their own drugs themselves.
If they did not produce them themselves, they would at least have the ability to regulate where and who the drugs came from. This would severely reduce the amount of money flow to those countries that currently produce and distribute the drugs.
Most countries that produce illegal drugs are very poor, and the drugs are their major cash crop. It is true that the producers could just grow something else.
But, the high profits that can be earned, as discussed, have kept them producing the illegal drugs. It also makes their land far more valuable since there are only limited areas in the world where cultivation of drugs can take place without too much interference.
Another benefit from legalization would be the ability to tax the drugs. With inelastic demand, consumers would not decrease their demand just because of a change in price.Economic Issues of Legalizing Drugs There is no way around it, drugs and drug use are ingrained human activities.
Every culture has a robust history when it comes to different types of drug use and each also has their . Economic Issues of Legalizing Drugs There is no way around it, drugs and drug use are ingrained human activities. Every culture has a robust history when it comes to different types of drug use and each also has their own way of dealing with the substances.
impact of marijuana legalization and future papers will explore this new data. Future papers will focus on specific economic issues relating to marijuana legalization.
For example, papers will be published that will explore in more detail the environmental, medical, criminal, spiritual, productivity and . Consequences of Legalizing Marijuana. Legalization increased both marijuana use and marijuana abuse/dependence in people 21 or older. Marijuana use is illegal under federal law.
Legalizing and regulating marijuana will bring one of the nation's largest cash crops under the rule of law. This will create jobs and economic opportunities in the formal economy instead of the illicit market. The legalization of marijuana at the state level has created a fundamental conflict with federal law where it is still illegal and controlled as a Schedule 1 drug, the most serious category of illegal substances that have no currently-accepted medical use and a high potential for abuse.
As a Schedule 1 drug, the funds for research on medical uses are .