By: Hector A. Canciano
Almost two weeks ago, I went to a lecture by Steve Davis, historian for the Institute for Humane Studies, on a talk named “The History of the War on Drugs from 1906 to the Present.”
To understand the economics of Marijuana, we must first look at the history of the drug.
The following was taken from a documentary titled “The Union: The Business Behind Getting High”, which may be found here. I encourage all of you to watch this interesting video.
Something many people do not know is that marijuana, also known as cannabis, was very much legal in the United States. Not just that, it was also one of the largest agricultural crops in the world. Cannabis can also be hemp, which is the most robust, durable, natural soft fiber in the face of this planet. Up until 1883, and for thousands of years before, Cannabis hemp was the largest agricultural crop in the world. It had thousands of uses and products. The majority of fabric, lighting oil, medicines, paper, and fiber came from hemp. The first marijuana law to exist in the United States, enacted in Jamestown Colony, Virginia in 1619 encouraged farmers to grow hemp. Benjamin Franklin used it to start one of America’s first paper mills. The first two documents of the Declaration of Independence was written on cannabis hemp paper. Up until the 1800s most of the textiles made in the United States, was made with hemp. 50% of medicine marketed in the last half of the 18th century, was made from cannabis. Even Queen Victoria used the residence abstracts from the leaves to alleviate her menstrual cramps. But the funny thing from industrial hemp was you couldn’t get high from it. Yet, it was lumped in with the following, which also made little sense: “Reefer Madness”. In the early 20th century, yellow journalism had surfaced. Articles depicted blacks and Mexicans as frenzied beasts, who would smoke marijuana, play devil’s music, and disrespect the readership, the majority of which happened to be white. Some offenses included looking at a white woman twice, laughing at a white person, or even stepping on a white man’s shadows. And this ended up in the 1937 Marijuana Tax Act. A tax that would not only include marijuana, but also hemp and cannabis medicine. It speculated that hemp’s potential for an abundance of new products was going to be in direct competition with other resources. And this, added to the reefer madness, led to the eventual downfall of all forms of cannabis. Popular Mechanics magazine had actually prepared an article entitled “New Billion-dollar crop.” Hemp was touted as being able to produce more than 5,000 textile products from its thread-like fiber, and over 25,000 products from its cellulose, ranging from dynamite and Cellophane. Its superiority as a source for paper was also becoming known. Especially with the development of hemp processing equipment, like The Decorticator.
Now, the marijuana tax act was all fine and dandy, except one thing: if you wanted to grow hemp, you needed to buy a stamp. But they weren’t giving any out, to anybody. And so, in effect, all forms of cannabis became illegal.Things pretty much stayed that way until World War II, when the government again decided that hemp again was a good thing, and produced a video titled “Hemp for Victory.” But by the time the war was over, hemp again became bad. And in 1948, when the marijuana law once again became into question, congress recognized that marijuana was made illegal for the wrong reasons. It didn’t make people violent at all – it made them pacifists. The communists would use it to weaken America’s will to fight. Congress now voted to keep marijuana illegal for the exact opposite reason they had outlawed it in the first place. And year after year, commission by commission, report by report, the president of the United States has come back with the view that marijuana should have no criminal view attached to it (The Wootton Report- 1968, England; The Le Dain Report – 1970, Canada; The Consumers Union Report on Licit and Illicit Drugs – 1972, United States; The LeGuardia Committee Report – 1944, New York; The Shafer Report – 1972, United States; Ganga in Jamaica: A Medical Anthropological Study of Chronic Marijuana Use, 1975; Cannabis in Costa Rica: 1980, A study in Chronic Marijuana Use; CANNABIS: Our Position for a Canadian Public Policy – 2002, Canadian Senate.) Yet, marijuana continues to remain as illegal today as nearly 70 years ago.
In this blog, I will not touch heavily on the medical affects of marijuana, because that is not a strong argument, I feel, as a reason why it should be illegal. Marijuana is far less dangerous than alcohol or tobacco. Around 50,000 people die each year from alcohol poisoning. Similarly, more than 400,000 deaths each year are attributed to tobacco smoking. By comparison, marijuana is nontoxic and cannot cause death by overdose. According to the prestigious European medical journal, The Lancet, “The smoking of cannabis, even long-term, is not harmful to health. … It would be reasonable to judge cannabis as less of a threat … than alcohol or tobacco.” There are also no peer reviewed scientific evidence to show that marijuana causes brain damage, effects the reproductive system, is a gateway drug, nor suppresses the immune system.
On a constitutional level, this is a complete infringement on our civil liberties. The federal government can only exercise powers that have been delegated to it. The Tenth Amendment reserves all other powers to the states or to the people. The reversal of Alcohol prohibition proved that government has no authority in regulating individuals privately drinking whatever they pleased. Why should marijuana be any different?
Say’s law states that in a market economy, goods and services are produced for exchange with other goods and services, and in the process a sufficient level of real income is created in order to purchase the economy’s entire output. In other words, if there is an increase in demand then that creates the incentive for an increase in supply. Since in the United States there is a demand for marijuana, then there is a big incentive for there to be a supply. Because it is illegal, however, to buy, sell, and grow marijuana, that supply is created by gangs and criminals.
U.S. drug laws inherently create crime. For one, since marijuana is illegal, the price of the good increases significantly, since there is much risk to growing, and distributing the good. That increase in price incentives addicts to commit property crimes (like stealing) to pay for their expensive addiction. Moreover, since the individuals distributing the goods are criminals, they are more prone to settle disputes between buyers and sellers, or between rival sellers more violently. This often times leads to retaliation and open warfare in the streets.
It is important to note that the drug funds gangs, corrupt politicians, and even terrorists. Looking back at alcohol prohibition, it was the mafia who ran the black market of the drug. Legalizing the drug, will move it from the informal, to the formal economy, where it can be taxed, regulated, and the profits can be sold by legitimate businesses in an open marketplace.
The following is from the CATO Institute Handbook for Policy Makers, the chapter titled “The War on Drugs” which can be found here.
“[S]ince the calamity of September 11, 2001, U.S. intelligence officials have repeatedly warned us of further terrorist attacks. Given that danger, it is a gross misallocation of law enforcement resources to have federal police agents surveilling marijuana clubs in California when they could be helping to discover sleeper cells of terrorists on U.S. territory. The Drug Enforcement Administration has 10,000 agents, intelligence analysts, and support staff members. Their skills would be much better used if those people were redeployed to full-time counterterrorism investigations.”
Moreover, I’d like to note that marijuana usage has increased significantly since it first became criminalized. There has been well over a 500% increase in marijuana usage since the early 1900s. Is that because there has not been sufficient spending to enforce the drug laws? Well, the federal government spends about $19 billion to enforce drug laws each year. Taken from the CATO link cited earlier “When druguse goes down, taxpayers are told that it would be a big mistake to curtailspending just when progress is being made. Good news or bad, spendinglevels must be maintained or increased.”
Driven by the Drug War, the U.S. prison population is six to ten times as high as most Western European nations. The United States is a close second only to Russia in its rate of incarceration per 100,000 people. In 2005, more than 786,000 people were arrested in this country for marijuana-related offenses alone. Overcrowded prisons is another negative impact of marijuana being illegal. The mean federal sentence for a drug felony is 75.6 months. What is the man for all felonies? 58.0 months. All offenses? 56.8 months. Drug felonies are second to violent felonies in mean and median federal sentence. Enforcing marijuana prohibition costs taxpayers an estimated $10 billion annually and results in the arrest of more than 847,000 individuals per year — far more than the total number of arrestees for all violent crimes combined, including murder, rape, robbery and aggravated assault. Of those charged with marijuana violations, approximately 89 percent,754,224 Americans were charged with possession only. In past years, roughly 30 percent of those arrested were age 19 or younger.
Notice that the above statistics were for felons. What are the reprecussions in the United States for being a felon? Well, they face additional consequences due to the stigma of their felon conviction such as the loss of voting rights in many states; exclusion from certain lines of work and difficulty in finding a job in others; prohibition from obtaining certain licences; exclusion from purchase and possession of firearms, ammunition and body armor; and ineligibility to run for, or be elected to, public office. Some states even consider a felony conviction to be grounds for an uncontested divorce. All of these losses of privileges, including others noted explicitly by the judge in sentencing, are known as the collateral consequences of criminal charges. Additionally, if a felon is not a U.S. citizen, that person may be subject to deportation after sentencing is complete. When a drug user gets sent to jail, he/she is no longer a productive member in society, paying taxes, having a job, or providing for a family; but instead, is a drain of resources from taxpayers, and will then be completely stigmatized and lose many rights once he/she serves the sentence.
Marijuana is often said to be a gateway drug. I disagree with that notion, given that it has never been proven true by any peer reviewed journal, and that it logically does not make sense. Before I begin, I’d like to ask – why isn’t cigarettes currently considered a gateway drug to marijuana? It’s simple – it’s because it isn’t. Marijuana inherently does not make someone want to try more potent drugs. The reason someone who does marijuana is more prone to doing harder drugs, is because the provider of the drug may offer the buyer more potent drugs. When someone goes into a CVS or Wal-Mart and buys cigarettes, they are not offered marijuana, just like a liquor store does not sell alcohol to minors. Those businesses are highly regulated by the government to have certain restrictions on who/what they are allowed to sell, and would not risk getting fined/closed for 1 customer. The dealer, however, does not care to sell marijuana to a 50 year old, 30 year old, 19 year old, or 10 year old. The dealer is willing to sell the drug to anyone who is willing to pay the price. Similarly, the dealer may sell the buyer more potent drugs. None of that would happen if the drug was legal. If legalized, then CVS and Wal-Mart would be selling marijuana and cigarettes side by side, they won’t be offering a side of cocaine and heroine.
So in conclusion, I strongly believe that the negative effects of marijuana, all stem from the fact that it is illegal. It is not a novel idea to legalize the drug- for most of America’s history, it was not only been legal, but encouraged to grow. Cannabis is one of these most versatile fibers in the face of the planet; it would have thousands of uses today. Current legislation incentives gangs and criminals to generate the supply for the US demand. Having the drug legalized, would remove their profits, which will lead to the fall of much organized crime (similar to the mafia during prohibition.) It would also allow the drug to be regulated by much better hands (today, a dealer sells the drugs to both a 50 year old, or a 10 year old – legalizing it would allow there to be regulations, similar to how you must be 21 to buy alcohol, or 18 to buy cigarettes.) Legalizing the drug will also help reduce our deficit, since instead of being a drain on the budget (from the cost of courts, policeman tracking down users and dealers, and funding our overcrowded prisons), it will become as a source of revenue (through taxes.)
hector this is pretty legit man, nice work
Fascinating post, man! As always, you make a very compelling case.