Drug Prohibition Fails the Cost Benefit Analysis

Drug prohibition is arguably one of the biggest policy failures from the modern era. We have spent trillions of dollars attempting to eradicate drugs, yet the drug industry continues to thrive. At this point, there is more than enough information to deduce that the costs far outweigh the benefits.

Since 1971, drug prohibition and the drug war have cost tax payers $1 trillion by modest estimates. Annually, state and local governments $25 billion and the feds spend $15 billion.

Those are, however, only the direct costs. If taxed at rates similar to alcohol and tobacco, it would generate about $46 billion. This means that taxpayers lose out twice – once for the $40 billion spent, and a second time for the lost revenue.

If the intent has been to eradicate drugs, the results have been a total failure. In 2006, it is estimated that the United States consumed:

-4,285 metric tons of marijuana

-389.6 metric tons of cocaine

-157.3 metric tons of methamphetamine

-27.6 metric tons of heroin

The supply of drugs has hardly dwindled. In fact, we are the number one country for drug use.

Despite all the spending, drug addiction rates remain unchanged. Instead of treating drug use as a public health issue, we treat it as a criminal justice issue. Consequentially, lots of people end up in jail. In 2010, state and federal prisons housed over 330,000 inmates for drug related offenses.

Considering these costs and outcomes, I believe drug legalization will have more favorable outcomes. This does not mean there are no costs associated with it – just that the benefits would ultimately be worth more.

Regulated distribution would restrict access to children similarly as it does for alcohol. With an established court system and open competition, distribution-related violence would cease. Government resources could be more efficiently deployed to address drug use through public health institutions.

Tax revenues can fill many large fiscal gaps around the country. The $320 billion industry could be a huge boom for the economy.

We are fighting a war that is impossible to win. Drug prohibition has created more crime and played a notable role in police militarization. Enforcing drug prohibition is not only infeasible, but efforts to do so have also failed dramatically.



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