The Crime of Prohibition

The Crime of Prohibition

By Michael Taillard, professional economist and board member of NORML Nebraska

The prohibition of alcohol during the 1920s facilitated the rapid growth of criminal organizations in the United States, giving birth to infamous names as Al Capone. It is largely for this reason that alcohol prohibition was universally deemed a spectacular failure. Nearly a century later, however, the mobs fueled by alcohol now seem like a joke compared to the militant terror cells, drug cartels, and street gangs that dominate large portions of the world. It’s been so long since the days of prohibition, that few people recognize the connection between these things.

While the global alcohol industry is quite massive, the US market alone worth about $198 billion annually according to a report by the US Beverage Alcohol Forum, the global narcotics trade is the 2nd largest industry in the world, smaller only than the global trade in arms and munitions. In the US, slightly over 50% of the entire narcotics market is marijuana. In a 2006 study on marijuana production in the United States by Jon Gettman, it was determined that marijuana is the largest cash crop in the nation, exceeding the combined value of corn and wheat (though not the combined value of corn and soy). Governments cannot eliminate markets, and the moment that the narcotics trade was made illegal, the entire industry was pushing into the hands of criminals. Demand for these goods did not disappear, and so long as people are willing to spend money for them there will always be someone to supply it, leaving the industry’s total value completely untouched, and free to grow as does any other legal market. By pushing the industry to the black market, the only thing that changed was that the industry was no longer provided the protections of legal and social obligations to adhere to ethical behavior, and so the massive profits generated by this huge industry have been used to fund violence and regional destabilization. The implications for crime have been immense, and it’s time that we, as a nation, recognize it.

By legalizing and taxing the marijuana trade, alone, total crime in the US will be severely reduced over the course of just a few years. There would be an immediate 60% average reduction in the total profits for US street gangs, and for drug cartels in Mexico and Colombia, which have production and distribution operations in the US – the largest consumer market for narcotics in the world. The difference in this reduction in profits, and the total narcotics market composed of marijuana, comes from the fact that domestic producers tend to focus on marijuana as a growth industry, while US cocaine consumption has decreased in recent years. Heroin consumption, though steady, is supplied almost exclusively from Middle Eastern nations such as Afghanistan, where terrorist organizations such as Al Qaeda and the Taliban tax farmers to fund their violence. Without these marijuana profits, criminal organizations across the Americas will largely lose their ability to fund operations, not only cutting their total size to less than half the current levels thereby cutting a large amount of violent crime in the US nearly instantaneously, but this also devastates the ability of these organizations to defend the operations which will remain from the relentless onslaught by law enforcement as they regain control over regions currently under control of the cartels and gangs. The grotesque amount of violence along the US-Mexico border as officials in both nations try to stop the movement of narcotics into the US, infamous for bold statements such as beheadings, will be mostly eliminated. That’s just the beginning, though.

As law enforcement resources are reallocated away from enforcing prohibition policies, they’ll be free to focus their efforts on violent and property crimes. As frequently touted by the National Organization for the Reform of Marijuana Laws (NORML), a marijuana user is arrested ever 42 second in the US, which clearly requires a huge volume of law enforcement resources, once you take into consideration the arrest, the paperwork, the court hearings, the prison systems, and probation. A 2014 study by the ACLU found that crime in Washington State dropped after fewer law enforcement resources were allocated to the enforcement and administration of marijuana prohibition, which is consistent with models proposed by such organizations as Law Enforcement Against Prohibition (LEAP). Increased efficacy of law enforcement against violent crimes (i.e.: improved certainty and speed of catching violent crime) is a strong preventative measure, reducing total attempts to commit crimes, as several studies published through the American Economics Association (AEA) have mathematically proven. Fewer violent criminals will be walking the streets not only as a result of improved efficacy of law enforcement, but by ensuring that violent criminals are not released early. Currently, the US prison system is at about 110% capacity – we imprison a larger percentage of our population than any other nation in the world, about 50% of them are incarcerated for drug-related offenses, 1/8th of which are being held behind bars for marijuana. This overcrowding of prisons creates financial and political pressure to release many prisoners early, resulting in the inappropriate release of killers and rapists, including the high-publicized release of Nikko Jenkins, who almost immediately killed several more people in Omaha, Nebraska. By treating drug users as criminals, far too often they actually become criminals; they’ll interact with violent offenders in prison, and are often recruited by criminal organizations. Even an offense for possession of marijuana will prevent someone from joining the military, getting work, or getting funding for school, turning that single act into the moment that will destroy any hopes they have to positively contribute to society, and encouraging them to turn to crime. The most commonly cited reason for dealing drugs is to make money, and these rates increase in impoverished areas or during recessions. By shifting this industry into the formal economy (i.e.: the legal one), a large volume of legitimate jobs are created in agriculture (i.e.: farming), distribution, retail, and the production of associated products. Sales for indoor agricultural LED lighting have increased significantly for companies like Hydrogrow LED, ever since the nation began the slow process of legalizing medical marijuana, requiring them to expand US operations and employment. The improved growth of the formal economy will improve personal financial and social influences on people, reducing their tendencies to turn to crime or violence. This is colloquially known as the “fat and happy” phenomenon.

Besides these direct influences on the reduction of violence in the US and around the world, legalization poses an optional opportunity to further reduce violence in our nation. The taxes on marijuana in Colorado currently total 27.9%, with an exemption available to people who have a prescription. During their first 3 months of legalization, the state collected about $22 million in taxes and fees, while the rest of the nation is projected to be losing about $33.48 billion per year in tax revenues. To add perspective, that would be enough to fund the entire Department of Justice, once the Drug Enforcement Agency is eliminated. The DEA costs $2.07 billion per year, while 99% of the total marijuana they destroy is “ditch weed”, which grows wild and cannot be smoked. By using these tax revenues to expand preventative measures such as predictive policing, which LAPD has used to decreased crime up to 8% per year for more than 10 consecutive years, the nation would experience large reductions in crime for decades. Other measures which would further reduce crime would be to fund drug rehabilitation options for people addicted to substances such as meth, coke, and heroin, helping people to quit using drugs and reducing the number of people who turn to crime to fund their addictions.

When taking into consideration all the different ways that the war on drugs contributes to crime rates in the US, it becomes clear that it’s not the drug markets which create crime: it is the prohibition of those markets. Governments cannot control economic markets by expanding their control over the people, and when they even try, the result is one that harms us all. Through the legalization of marijuana, alone, we can conservatively reduce long-run total crimes in the US by 1/3, while eliminating prohibition entirely could cause a long-run decrease of up to 1/2. Violent and property crime is monstrous under any circumstances, but the only way to defeat the beast is to starve it. Once it’s weakened, only then does it become possible to destroy it. Until that day, it will have nearly limitless resources with which to thrive.