The W.o.D New World

New World

“State law trumps city ordinances,” Police Commissioner Charles Ramsey told the Philadelphia Inquirer. And while marijuana may be legal in four states and D.C., under federal law it is still as illegal as heroin or LSD — and even more tightly controlled than cocaine or pharmaceutical opioids.

The Obama Administration has decided, for the moment, not to interfere with the states that have legalized marijuana, but times change and so do administrations. We cannot begin to enjoy the benefits of managing drugs as a matter of health and safety, instead of as a matter of law enforcement, until the drugs are legalized at every level of American jurisprudence, just as alcohol was re-legalized when the United States repealed the Eighteenth Amendment in 1933.

One of the evils that led to Prohibition in the first place was the system of “tied houses” — saloons owned by alcohol producers that marketed their product aggressively.

As Prohibition was ending, John D. Rockefeller commissioned a report published as Toward Liquor Control that advocated total government control of alcohol distribution. “Only as the profit motive is eliminated is there any hope of controlling the liquor traffic in the interests of a decent society,” he said. That never happened, of course.

 Tied houses were banned, but Seagram, Anheuser-Busch, and other companies became gigantic from the manufacture and sale of alcohol; only eighteen states assumed any direct control over the distribution process.

We’ve grown used to living with the consequences of legal alcohol, even though alcohol is undeniably costly to the nation in lives and treasure. But few would argue for a return to Prohibition, in part because the liquor industry is so lucrative and so powerful. Binge drinkers — 20 percent of the drinking population — consume more than half of the alcohol sold, which means that for all the industry’s pious admonitions to “drink responsibly,” it depends on people doing the opposite.

At the same time, Big Alcohol’s clout keeps taxation low. Kleiman, of NYU, estimates alcohol taxes to be about a dime a drink; the societal cost in disease, car wrecks, and violence is about fifteen times that. Neither the binge-dependent economics of alcohol nor the industry’s capture of the regulatory process is something we would want to mimic when legalizing substances such as heroin and crack cocaine.

We’ll have to do a better job at legalizing drugs than we did at re-legalizing alcohol if we want to hold addiction to a minimum, keep drugs away from children, assure drug purity and consistency of dosage, and limit drugged driving. Last November, Ohio voters rejected marijuana legalization, most observers believe, precisely because the proposed initiative would have allowed only ten companies, all of which sponsored the initiative, to grow and distribute marijuana in the state.

If we can summon the political will, the opportunity to establish a state monopoly on drug distribution, just as Rockefeller urged for alcohol in 1933, is now — before the genie is out of the bottle. Switzerland, Germany, and the Netherlands have successfully made heroin legally available to addicts through networks of government-run dispensaries that are divorced from the profit motive.

he advantages of a state monopoly over a free market — even a regulated one — are vast. In the 1970s, the eighteen states that established government control over alcohol distribution at the end of Prohibition began to water down their systems by feeding their wholesale or retail alcohol businesses, or both, to private industry.

 Still, in 2013 a team of researchers at the University of Michigan found that even in “weak monopoly” states, consumption of spirits was 12 to 15 percent lower than in states with private liquor stores or grocery stores.

In states that retained control over retail sales, alcohol-related traffic fatalities were about 7 to 9 percent lower than in states that did not; crime rates were lower as well.

Just about everybody who thinks seriously about the end of drug prohibition agrees that we’ll want to discourage consumption. This goal could be accomplished, at least in part, under a system of regulated, for-profit stores:

by setting limits on advertising and promotion (or banning them altogether), by preventing marketing to children, by establishing minimum distances from schools for retail outlets, by nailing down rules about dosage and purity, and by limiting both the number of stores and their hours of operation. In a for-profit system, however, the only way government can influence price — the strongest disincentive to consumption — is by levying a tax, and getting taxes right is no small task.

First, on what basis should the tax apply? Federal taxes on alcohol are set according to potency, but keeping up with the THC content of every strain of marijuana would be impossible. Weight? The more potent the drug, the less you need to buy, so taxing by weight might end up promoting stronger drugs over weaker. Price?

 Post-legalization prices are likely to plummet as the “prohibition premium” — which compensates dealers for the risk of getting caught — disappears, competition sets in, and innovation increases production.