Llad Phillips 1 Casual Users, Substance Abusers, and Public Policy The War On Drugs

Llad Phillips 2 Questions u Should public policy towards marijuana be any different than public policy towards alcohol consumption and cigarette consumption? –Why?

Llad Phillips 3 Drugs and Crime: The Perception of the Victim Source:

Llad Phillips 4

5

6 Arrests: The War on Drugs

Llad Phillips 7

8

9 State Prisoners Federal Prisons: In 1996, Drug Offenders accounted for 60% of accounted for 60% of Federal Prisoners Federal Spending on Drug Control 1981$1.5 Billion 1989$6.7 “ 1990$9.8 “ 1995$13.0 “ 2000$17.9 “ 2001$18.1”

Llad Phillips 10 Federal Drug Budget By Function  Total $17,940.3 $18,053.1  Drug treatment $2,915.2 $3,168.3  Drug prevention 2, ,515.7  Criminal justice system 8, ,357.7  International 1,  Interdiction 1, ,950.4  Research  Intelligence  International (U.S. Support  for Plan Colombia 954.4

Llad Phillips 11

12

13

14 Drug Use by High School Seniors ER Incidents

Llad Phillips 15

16

17 Death Rates from HIV

Llad Phillips 18

19

20

21 Questions About Crime u What are the Social Policy Options Towards Victimless Crimes? –education problem F prevention –health problem F cure for addicts and abusers –fiscal problem F control use through taxes –law enforcement problem F focus on demand? –users F focus on supply? –distributors

Llad Phillips 22 Education u Let an informed public make a choice –An individual would weigh the benefits against the costs –If the benefit/cost ratio exceeds one F smoke F drink –Could impose costs on others F driving under the influence F second hand smoke –Protection of Minors F blandishments of advertising F influence of peers

Llad Phillips 23 Health u Treat substance abuse –Need to identify the abusers F many citizens are not covered under health plans –Difficult to cure addicts

Llad Phillips 24 Fiscal Policy u Use excise taxes, a tax per unit, to control demand –tax per pack of cigarettes –tax per bottle of gin u Policy moderates rather than eliminates use –lacks the moral suasion of a law prohibiting use

Llad Phillips 25 Law Enforcement u Control demand? –hard to keep tabs on numerous users –loss of respect for the law F people like to party u Control supply? –at home F search and destroy policies have a low success rate –abroad F interdiction of supply has low success rate F we export our enforcement problem to: –producing countries, e.g. Bolivia –transhipment countries, e.g. Mexico

Llad Phillips 26 What are the Tradeoffs Among Policy Options?

Llad Phillips 27 Some Consequences from Criminalizing Substance Use u barrier to law-abiding suppliers u enriches crooks –prohibition financed the Mafia in the US –drug profits have created a new Mafia in Colombia u high prices drive some users to crime to support their habit u easy money corrupts some law enforcement officials

Llad Phillips 28 “Scale, nature, and perception of the drug problem are very different in...” u United States u Canada u Western Europe Source: Peter Reuter et. al., Comparing Western Europe and North American Drug Policies, Rand

Llad Phillips 29 The Western Nations Drug Problem

BehaviorSocial Problem drug use crime AIDS ( violence: US with guns, 50 million hanguns in private hands = 100 times the per capita rate in Europe) (free needles for addicts: Germany Italy Netherlands Switzerland Great Britain)

Llad Phillips 32 CountryNumber of Heroin AddictsEpidemic Decades US600, ,00060’s & 70’s Great Britain60’s Germany60’s Netherlands60’s Spain80’s CanadaNone CountryNumber of Cocaine AddictsEpidemic Decades US1,800,000-2,000,000*80’s CanadaNone * 12,000,000 users of at least once per year

Llad Phillips 33 The Western Nations Drug Problem

Llad Phillips 35 Market Analysis u Compare and contrast –free market –enforcement –fiscal policy F excise tax as a control device

Llad Phillips 36 Market Analysis u concepts –market supply F marginal cost of production: the additional cost of one more unit F cost of production equals the sum of marginal costs F revenue = price * quantity sold –market demand F price some consumers are willing to pay F expenditure = price * quantity bought F consumer surplus: a measure of welfare for those consumers willing to pay above the market price

Llad Phillips 37 Market Analysis u Concepts –supply and demand F determines the market price –the marginal cost of production = the marginal value of consumers F the quantity demanded equals the quantity supplied F profit = revenue - cost of production –profit, or producer’s surplus, is a welfare measure F total welfare benefit = consumer’s surplus + producer’s surplus

Market Supply

Market Demand

Market Supply and Demand

Enforcement Policy: Search, Confiscate, Resale

Enforcement Policy: Search, Confiscate, Burn

Fiscal Policy: 50% Excise Tax, Government Keeps the Revenue

Fiscal Policy: 50% Excise Tax, Government Keeps Revenue

Fiscal Policy: 50% ExciseTax, Use Revenue to Buy Marijuana