Should we legalize all drugs?

Legal drug sales would be good for the economy

Question: Should we legalize all drugs?
Position1 of 3›: Yes, all drugs should be legal
Argument‹5 of 5: Legal drug sales would be good for the economy

Already-legal drugs such as alcohol and marijuana generate enormous revenue, and other drugs can too.

The argument

Recreational drugs are a large global market, with U.S. consumers alone legally spending over 200 billion dollars a year on alcohol. The scale is the starting point of the argument: this is not activity that legalisation would create, but an established pattern of consumption that already exists and is already being paid for. Illegal drugs generate a comparable amount of revenue already. A RAND Corporation study of the period between 2006 and 2016 found that spending on illicit drugs in the U.S. totalled over 120 billion dollars each year. The difference between those two figures is not whether the money is spent but who receives it and whether any of it is taxed. Instead of having this money go to the criminal organizations behind illicit drug sales, it could be a part of the legitimate economy, providing tax revenue and creating jobs. The transactions occur either way; prohibition determines only that the profit accrues to organisations which contribute nothing to the public costs their trade creates, and that the work the trade supports is criminal work rather than the taxable kind. There is a worked example rather than only a projection. The state of Colorado legalized marijuana in 2014, proving the economic benefits of legalization: one year after cannabis was legalized, tax revenues on marijuana exceeded taxes from alcohol, with the two generating 70 million and 42 million dollars respectively. That a newly legal market out-earned an established and long-taxed one within a single year indicates how much activity had been taking place beyond the reach of the tax system, and how quickly it can be brought within it once the legal position changes. Because legal drug sales would move an existing market of this size out of criminal hands and into the taxable economy, generating revenue and employment that prohibition currently forfeits, all drugs should be legal.

Premises

[P1]Recreational drugs are a vast market, with Americans spending over $200 billion a year on alcohol and over $120 billion on illicit drugs. [P2] Legalizing drugs would move that money from criminal organizations into the legitimate economy, providing tax revenue and jobs. [P3] Colorado proved this when, a year after legalizing marijuana in 2014, its cannabis tax revenue exceeded that from alcohol. [C] Therefore, because legal drug sales would be good for the economy, all drugs should be legal.

Counter-arguments

The revenue argument generalises illegitimately from soft to hard drugs. The examples — alcohol and Colorado's cannabis — are comparatively low-harm, regulable substances; extrapolating from their tax yields to legal commercial sale of heroin, methamphetamine and fentanyl ignores that the latter carry far higher external costs. Addiction to the most dangerous drugs generates healthcare spending, lost productivity and social harms that economic studies of alcohol and tobacco suggest can exceed the tax revenue collected, so 'good for the economy' cannot simply be assumed once the whole spectrum is included. The Colorado figures show a regulated cannabis market can raise revenue; they say nothing about the net fiscal effect of a legal fentanyl industry. Moreover, the criminal-market gain the argument prizes — moving money out of cartels — is largely captured by the sibling policy of decriminalisation plus regulated harm reduction, which removes the criminal premium without a commercial incentive to market the deadliest substances. The economic case, in short, supports regulating some drugs, not legalising all of them.

Rejecting the premises

[Rejecting P1] Alcohol and cannabis spending figures do not generalise to heroin, meth and fentanyl, whose addiction-related health and productivity costs can exceed any tax revenue. [Rejecting P3] Colorado shows a regulated cannabis market can raise revenue, not that legal commercial sale of the most dangerous drugs would be a net economic benefit.

Proponents cited

Paul Stares
“[If drugs were legalized] governments could abandon the costly and largely futile effort to suppress the supply of illicit drugs and jail drug offenders, spending the money thus saved to educate people not to take drugs and treat those who become addicted.”
James Ostrowski
“The total cost of drug-related law enforcement-courts, police,prisons, on all levels of government-is about $10 billion each year. Each dollar spent on drug enforcement yields seven dollars in economic loss. Prohibition takes $10 billion from taxpayers and uses it to raise $80 billion for organized crime and drug dealers, impoverishing many drug users in the process. To pay for expensive black-market drugs, poor drug users then victimize the taxpayers by stealing $7.5 billion from them. Thus, the total economic cost of prohibition is about $80 billion each year (excluding the $7.5 billion in thefts).”
Jeffrey Miron
“Legalization would reduce state and federal deficits by eliminating expenditure on prohibition enforcement — arrests, prosecutions, and incarceration — and by allowing governments to collect tax revenue on legalized sales.”