Legalize Marjiuana? The costs.

13/05/2011 David K. Levine Salvatore Modica

There is a simple point about legalizing marijuana that seems not to have made it into the debate.

Let us start by putting ourselves in context to say what we think of marijuana. It would be too easy to admit that we tried it, because most of us who are now in the mid-fifties have; a more selective question is “Have you ever bought it”, for which the answer is certainly “yes”. That said, one can debate endlessly the possible ill-consequences of marijuana. It is a relatively light drug for adults, but less so for youngsters. Like all drugs, especially alcohol there is the possibility of abuse. And it is easier for pot than alcohol to become a constant presence in a group of teenagers: to have a drink you usually go to some place, whereas to smoke a joint you just have to pick up the pot from your pocket and roll. Moreover, for some it weakens the willingness to do things, to work, to respect your schedules, and so forth. Along with this there is often a "Why should I care" attitude which in our judgment is not a good thing.

These views, which we share, are - often in exaggerated form, and often with a great deal of hypocrisy by former marijuana users - popular with many who argue against legalization. However, we do not believe that ethical considerations about personal behavior should form a basis for public action in a liberal State. We subscribe to the colorful expression that Linus Torvalds used in an interview a few days ago (here): "Ethics are something private. Whenever you use it as an argument for why somebody else should do something, you're no longer being ethical, you're just being a sanctimonious dick-head."

As economists we think more appropriate to approach the problem from a cost-benfit perspective. But a noticeable feature of the long-standing debate on the legalization of cannabis is that people on the "legalize" side always focus on benefits and gloss over costs. There certainly are benefits from legalization: the blow to organized crime; the lowered cost of police and incarceration over drug-related crimes; the reduction in judicial persecution; the additional tax revenue generated from legal consumption; and so forth. Still one must assess whether there are costs that potentially outweigh these benefits. Let us for once as proponents of legalization focus on the costs rather than the benefits. There is of course a great deal of posturing “we must send a signal to youth.” This has the unfortunate corollary “we must do so no matter how great the social cost.” There is, however, one legitimate cost issue: legalization would reduce the price of cannabis, it would increase consumption - and some of this would come from new consumers. The fact that people who would not otherwise use pot would do so if it was legal must be squarely faced.

One question, of course, is "how many" new consumers would there be? This is a bit too blunt, however: from a social cost-benefit point of view not all consumers are alike. Ethical problems aside, the cost of a new marijuana consumer to society is that he may become a less productive, less good citizen. That may sound cynical, but it is a fact. Naturally society will lose more if a highly productive individual becomes a pothead than if, say, a retired person starts to consume marijuana. So our simple point is that the question to ask is not "how many", but "what kind" of new consumers there would be. Are they likely to be those who currently contribute most to society? What then would be the productivity loss to society from new consumers of cannabis? We do not have an answer (you may guess what we guess), the point is that this is the issue which needs to be investigated empirically.

Here are our theoretical leanings. First is the issue of teenagers. They don’t contribute much to society currently of course, but they will in the future, and early consumption of marijuana may harm that future contribution. So we view it as desirable that they consume less marijuana. But: it is likely that illegalization makes marijuana more available to teenagers rather than less! Given that it is illegal also to sell to adults, from a seller's point of view there is no additional risk in selling to minors. For a legal seller this logic is reversed: selling to adults is profitable, selling to minors is forbidden, hence risky.

Second is the issue of people in critical positions, for example, airline pilots. Personally we would prefer that our pilots be sober when they fly us. However, they are easily excluded from consumption by contract and drug-test: they aren’t allowed to fly drunk either.

Third is the point that is perhaps the least obvious. Who is the most discouraged by illegalization? The serious user who incapacitates themselves? Or the light occasional user who relaxes once in a while by lighting up? It seems pretty apparent that illegalization has little impact on the serious user. As potential light users ourselves, it seems equally apparent that light users are discouraged by illegalization. Why go to the trouble - and at least some small risk, mostly of having to associate with some fairly undesirable characters - for something that isn’t going to be an important part of your life anyway? So the likely effect of legalization is few new serious users and many more light users. But the latter has to be counted a benefit rather than a cost.

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