The Case in Favor of Legalizing Drugs

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February 22, 2012
Juan Carlos Hidalgo, Latin American public policy analyst for the Cato Institute
La Nacion, Costa Rica

English Translation

Otto Perez Molina of Guatemala has become the first sitting president to propose legalizing drugs as a way of combatting drug trafficking. As such, he has opened the debate on a topic that has been widely discussed in academic circles but rarely mentioned on the political level. His proposal deserves the support of the other Latin American presidents.

There is no doubt that drug prohibition has been a failure. In the U.S. the percentage of the population 12 years or older that consume drugs has risen from 5.8% in 1991-93 to 8.9% in 2008 (21.8 million individuals). According to the 2011 National Drug Threat Assessment by the U.S. Department of Justice, the abuse of various types of illicit drugs, including heroin, marijuana and methamphetamine, appears to have risen, especially amongst youth. There is no doubt that prohibition has not stopped the use of illicit substances in the biggest global market.

Harmful effects of prohibition. Just as much as there is demand for drugs in the U.S., there is also supply. The question is whether this trade should be in the hands of legal businesses – like alcohol and tobacco – or in the hands of violent criminals. Prohibition chooses the second option with well-known results: in Mexico, the war against drugs has cost 500,000 lives in the last 5 years; in Central America, drug trafficking is responsible for around 60% of crime and has placed countries like Honduras, Guatemala, El Salvador, and Belize amongst the most violent in the world; and in South America, the profits from drug trafficking has financed terrorist groups such as the FARC in Colombia and the Shining Path in Peru. It is clear that in Latin America, the war against drugs imposes an enormous cost in terms of lives, money, and deterioration of institutions.

Drug prohibition has made drug trafficking an extremely lucrative trade. This is because the prices of illegal substances are determined more by the cost of distribution than the cost of production. For example, what people pay in the U.S. for cocaine is more than 100 times the actual price of the coca leaf. Depending on the drug, over 90% of the retail price of the drug corresponds to the premium generated by prohibition. For this reason, the profit margins of the drug cartels are enormous. According to United Nations data, the global drug trade is worth $320,000 million a year.

In spite of the clear failure of prohibition, there are many misconceptions about drug legalization. Therefore, it is important to clarify the following:

  • First: legalization does not imply the approval or encouragement of drug use. The consumption of drugs is a historic reality that we have to live with.
  • Second: there is an important difference between drug consumption and drug abuse, just as there is a huge difference between alcohol consumption and alcoholism. Not everyone who consumes drugs becomes an addict.
  • Third: there is a crucial difference between the negative consequences of drug addiction – such as familial disintegration, health problems, and productivity losses, etc. – and the negative consequences of drug prohibition, such as crime, violence, corruption, and high levels of deaths caused by overdose. Often, in arguing against legalization, people imagine violence and crime when in reality those are caused by prohibition and would significantly diminish if the black market for drugs disappeared with legalization.
  • Fourth: it is important to clarify that legalization will not solve the problems of drug addiction or the social harms associated with addiction, even though it is better approached from a health rather than a criminal view. What legalization will solve is the negative effects of prohibition outlined above.

Unfounded fears. The main argument against legalization is based on the fear that there will be an increased use of drugs. In answering this, it is important to bear in mind the Portuguese experience, which in 2001 became the first country to officially decriminalize the consumption of all drugs, including heroin and cocaine. A study conducted by Glen Greenwald for Cato Institute concluded that decriminalization in Portugal did not have any adverse effects on the rate of drug consumption, which actually are now among the lowest rates in the European Union.

It should be noted that although the consumption of drugs did not increase as many had feared, the number of addicts registered in rehabilitation clinics tripled between 1999 and 2998. Which means that decriminalization enabled the tackling of drug addiction by removing the social stigma associated with addicts and by being able to treat them as patients.

The experience in Portugal is valuable. However, the decriminalization of consumption, despite being a step in the right direction, does not eliminate the black market of drug trafficking. It is important to remember that the failed experiment of alcohol prohibition in the U.S. from 1920 to 1933 was based on decriminalization: the consumption of liquor was allowed, but the sale and advertising of it was not.

By legalizing drugs, as proposed by the Guatemalan president, governments will retain more control over the drug market and could regulate and tax the production and sale of drugs, such as is done for tobacco and alcohol. The money gained from taxes on drugs would allow the government to offer treatment to addicts. However, the greatest advantage of legalization is that it would dispel the criminal elements of the drug trade, decreasing - if not eliminating - the violence, crime, and corruption associated with drug trafficking.

No proponent of legalization says that it will be a panacea. However, it is substantially better than the failed model of prohibition. Legalization is not a solution to the “drug problem” because drug addiction will also exist. But just like the prohibition of alcohol resulted in a false focus on alcoholism, the war on drugs has falsely focused on the problem of drug abuse.

Otto Perez Molina has hit the nail on the head with his proposal of legalization. It was time for a Latin American president to finally raise his voice against the war on drugs, whose costs fall disproportionally on this region.

View the article in Spanish.

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