Letter to the Editor The Annals of Internal Medicine September 29, 1995

The legalization debate diverts attention from the need to fix prohibition's worst (but fixable) fault-- its drug/crime subsidy. The latter is the difference between the real economic value of drugs and the scarcity-inflated market price.

By official estimate, 1993 U.S. drug sales totaled $49 billion.¹Black market drug prices are estimated to range between 70 and 140 times real economic worth.²If the real worth of drugs sold was 1/70^thof the market price, then current policy caused American drug users to pay $49 billion for drugs worth only $700 million. The difference between the price paid and the real value is prohibition's $48.3 billion drug/crime subsidy. It finances gangs and gangsterism, drug running, corruption of the criminal justice system, and it motivates the seduction of new drug users.

How is that fixable? Since addicts are estimated to consume 80% of illegal drugs, we could eliminate 80% of the drug/crime subsidy by treating addiction as a disease, rather than a crime, and by providing treatment acceptable to addicts. Instead, prohibitionist policies exclude most addicts from treatment: 1) with long waiting lists, 2) with arbitrarily high admission thresholds, 3) by punishing relapse with expulsion from therapy, and 4) with treatment regimens many addicts find worse than the disease. Prohibition leaves untreated addicts as the captured clients of the drug merchants.

Sweden prohibits advertising and private commerce in alcohol but avoids the criminogenic effects we Americans associate with prohibition: a state monopoly supplies existing demand, preventing black market sales and demand creation. Swedish indices of alcohol-related pathologies rank with the lowest.³

The Swedish precedent suggests we could eliminate the remaining 20% of the drug/crime subsidy with a state monopoly supplying recreational drug users. Harm from adulterated black market drugs would be eliminated; the drug syndicates would be out of business; and the economic incentive to the seduction of new drug users would be curtailed.⁴

Donald C. Smart, Drug Policy Analyst 1405 Glendale Avenue, Berkeley, CA 94708

NOTES & REFERENCES

1) The retail sales estimate comes from the report of the Office of National Drug Control Policy as reported in the San Francisco Examiner and Chronicle of May 28, 1995, p. C2. If the sum of sales receipts was 140 times the ordinary and necessary cost of production and distribution, the drug /crime subsidy would be $48.65 billion. The drug/crime subsidy is insensitive to error in the estimate of ordinary and necessary cost of production and distribution because the latter is, in any event, a very small fraction of sale receipts.

2) Duke, Stephen B., and Albert C Gross (1993), AMERICA'S LONGEST WAR: Rethinking Our Tragic Crusade Against Drugs,New York: Putnum's Sons, p. 7.

3) The BOTTOM LINE on Alcohol in Society, Lansing, MI, vol. 16, Number 1, Spring, 1995.

4) Smart, Donald C. (1995), MARKET INTERPOSITION: A Comprehensive Public Health Strategy for Control of the Drug/Crime Epidemic,Berkeley, CA: D.C. Smart.