The Political Economy of Illegal Drugs

The Political Economy of Illegal Drugs

The Political Economy of Illegal Drugs

The Political Economy of Illegal Drugs

Synopsis

With debates surrounding the decriminalization of certain illegal drugs, this new book is a timely and sober reflection on one of the biggest social problems facing the world at large.

Excerpt

Why write an economics study that discusses drug trafficking and consumption? Of course, intuitively, the word 'drug' evokes an image of enormous sums of money, but an economist's work should not be reduced to an accountant's inventory of cash flow. The economic approach consists in examining the consequences that drugs circulating on the market have on consumer and dealer behaviour. Effectively, drugs are psychotropics that influence the perception of the individuals who consume them, but they are also forms of merchandise, which are exchanged in the market-place and have particular characteristics.

There is never a drug debate that does not very quickly begin to discuss the pros and cons of prohibition. For some, the intrinsic harm of drugs justifies their being banned; the existence of illegal markets is a result, regrettable of course, but one that a more repressive policy could do away with. For others, it is precisely repressive public intervention that is the root of all evil because it plunges the consumer into the midst of a web of transactions which are not only illegal, but are, above all, dangerous. The dogged opposition between these two theses explains the recurrent nature of drug policy debates. We should note, in passing, that it is in fact the societal debate which, by focusing on the violent nature of the functioning of these illegal markets, has invited economists to discuss the characteristics of market functions, and it is not the latter who have invited themselves to a debate where their presence has been requested by nobody.

The controversy on the root of the evil created by drugs dates back to an old and deep opposition between different economic approaches, notably liberal and interventionist. In order to determine when intervention is justified, it is possible to adopt a fairly simple rule that the most liberal authors would not contest. Consider as established that individuals are the best judges of their own well-being. Then, as long as an individual's actions affect only his well-being, and not that of other members of society, he must be free to act as he wishes. The rule is clear, but putting it into practice is less so.

First, is a drug-consuming individual still the best judge of his well-being? As Gary Becker has argued (Becker and Murphy, 1988), the

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