Hashishi

The Drug War and everyday economics
2-25-`07 | Zeal For Truth

There are some basic laws in economics that most people understand. If not intellectually, they definitely can grasp these laws intuitively as they interact with others in the marketplaces of idea, goods, services, politics and human relationship.

Everyday Economic Examples

For example, we may not think about it as much, but all of us who are married are monopolists. We have obtained a scarce resource - our spouse - and made a contract with them guaranteeing us exclusive use of their bodies (at least). Monogamy is a monopolistic concept. If another man engages in force to break this contract between my wife and I, or if my wife willingly violates this law with another man - many people would see me as justified in seeking justice over the broken contract.

We can understand the basics of supply and demand. Many people might notice that HDDVD players dropped in price quite a bit over this last month, almost half in some stores. People paying attention to the news on this know that Blue Ray has won the next gen format war and that HDDVD support is going to dwindle. It is no shock to them, then, that prices have gone down, as the demand for these goods is sloping downward in favor of the victor.

Rising prices is something that is understood in the same way, but the inherent emotionalism of people often clouds the interpretation. Nevertheless, there is still some basic part of everyone that can rationalize why Superbowl tickets can sell for over a thousand dollars. It does not take an MBA to know that there are literally hundreds of thousands of people who would like to go to the Superbowl, but only about 70,000 seats. The demand far exceeds the supply - this is going to push the price up dramatically.

The Universality of Economics

Yet while people do generally understand the way the world works (for this reason, much of economics fits into a broader category of science and sociology called “natural law”) they fail to apply these principles universally. Professor Edwin W. Patterson said it thusly:

"Principles of human conduct that are discoverable by “reason” from the basic inclinations of human nature, and that are absolute, immutable and of universal validity for all times and places. This is the basic conception of scholastic natural law … and most natural law philosophers."

While this explains our inherent understanding of monogamy or HDDVD prices, it does not explain why it is that we still pursue such economically infeasible and irrational projects such as universal health care, farm supports, wage and price controls and even the drug war.

Application to Drug Laws

Take the issue of the illegal drug trade. The United States and most countries with anti-drug laws are entirely focussed on fighting drug use by attempting to overwhelm economic law. It is US policy to go after the “supply side” of drugs - dealers, suppliers and importers.

But this policy is inherently flawed. For instance, we know that it is demand for a good or service which drives the market. A good can be either scarce or abundant, but until lots of people want it, no one does much to bring it to market. Oil was never a valuable substance until it became an instrumental element of energy creation and expenditure. Drugs are heavily demanded because of their addictive nature. A heroin addict is going to want the drug (or a valid substitute) whether it is $10 or $1,000 a hit.

This is why supply-side enforcement practices fail. Every time the coast guard, FBI, CIA or police manage to prevent or arrest a supplier of drugs, the result is an increased scarcity (with no decrease in demand). This is akin to a drought in California, with steady demand for oranges remaining. The price shoots up, encouraging farmers of other goods to switch to making oranges to satisfy the demand (and obtain higher profits). Drug busts do the same thing - people who were doing law-abiding professions now risk criminality to grow a few pot plants on the side to cash in on the high price. This criminalizes more and more of society, and perpetuates and expands the drug problem.

Victory in Surrender

The very fact that were “fighting” the drug war is causing us to lose. With every single “victory” - we are bringing about more drug use and encouraging more of the anti-social and criminal activity that accompanies a black market.

But the irrationality persists. It absolutely baffles some as to why people like myself, who do not use drugs (nor ever will), could support the decriminalization of all drugs. I have been called unchristian, I have been called an anarchist (with malevolent intent) and I have been even called ignorant or reckless for such a proposition. But the reality is that universal natural law is on my side - because I detest drug use and the crime that surrounds it, I see no other moral alternative but to support the only rational solution to the problem.

Until we admit that we cannot “fight gravity” (that is, overcome natural law by government laws) then we are just going to keep jumping up towards the sky in futility, wearing ourselves out. We will devote more and more resources, better used in much more productive pursuits, to an unwinnable war. We will drain the economy, encourage crime and strengthen the “enemy” until the economic backlash against us is so strong that it will knock us over.

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Unregistered

That was a great article, keep posting

CruSolder

very nicely put. :]