Drugs: Are We Better off Legalizing Them? (Part 1)

The fundamental point behind making drugs illegal is that in addition to law abiding citizens, those who wish to abuse anyways face high production and sale costs which in theory should decrease demand. But illegal drugs are a special case in that their price is fairly inelastic because they’re addictive. The result is that unlike most other commodities, people are always going to be willing to pay any affordable amount to get high. So making drugs illegal simply limits the number of dealers to those who can overcome legal barriers, and in the process makes them richer and spikes crime rates.

So to test this beyond the theoretical economic mind, NPR’s Planet Money talked to Freeway Ricky Ross who after became a large scale crack dealer in Los Angeles was sentenced to life in ’96 only to be released on parole 13 years later.

So the first part: making drug sales illegal drives the price up. To judge take a look at Ross’ numbers. Ross went through up to $3,000,000 a day out of which he made between 200 and 400k off each million. Of this profit he estimates that the forbidden nature of his products is responsible is responsible for approximately a thousand fold spike in their price.

                Now onto part two, that part of this money funnels into higher crime rates. Rick worked with 30-40 guys each of whom at any given moment was required to be armed. This thug and armed environment had obvious effects.