Previously by Mark Thornton: Lower the Debt Ceiling
An MP3 audio file of this article, narrated by the author, is available for download.
The Panic in Needle Park was a 1971 movie starring Al Pacino, about a heroin addict couple whose life spins out of control. It was set in a New York City park frequented by heroin dealers and heroin addicts. The other well-known "needle park" operated in Zurich, Switzerland, during the 1990s, when authorities experimented with an open park for heroin dealing and consumption.
Military man and drug warrior Joseph Califano and former drug czar William Bennett recently teamed up to write a Wall Street Journal editorial entitled "Do We Really Want a ‘Needle Park’ on American Soil?" The editorial is an attack on the recent report by the Global Commission on Drug Policy, which declares that the US War on Drugs has failed and is ruining civilization around the globe. The commission consists of 19 prominent people with credentials equal to or better than Califano and Bennett’s. It calls for the substitution of legalization and harm-reduction policies for the hopeless war on drugs.
The Califano/Bennett editorial has more holes in it than a heroin addict’s forearm. First, the Pacino movie was about illegal drugs, not legalized drugs. The setting was the early years of Nixon’s war on drugs. Marijuana was getting harder to obtain and heroin and LSD were rising in prominence. The portrayal in the movie is what advocates of legalization, not prohibition, would expect.
In addition, the economy of the time was turning from boom to bust. The movie debuted six weeks after Nixon closed the gold window. Governor Nelson Rockefeller would soon get to work on the infamous Rockefeller drug laws that Murray Rothbard called "the epitome of the belief in treating a social or medical problem with jail and the billy club." These draconian laws required long-term prison sentences for small-time dealers and even drug consumers. They would go down in history as a fiasco. Can’t the drug warriors ever learn?
Conditions at Zurich’s needle park also fail to support the Califano/Bennett opinion. True, the park was a haven for heroin addicts, but that was how the city designed it: a tiny island of legalization without controls or medical and social infrastructure. Naturally, addicts from all over the city, the country, and even other nations gravitated to the park. If I lived in the neighborhood I would have complained too.
However, instead of going the mistaken route of the Rockefeller laws, the Swiss learned from their mistakes. They set up drug consumption rooms that provided a "clean and safe" place for addicts to inject heroin under medical supervision instead of in public view. They also established a needle-exchange program whereby addicts received clean new syringes when they returned their used ones. It should not be surprising that the Swiss have one of the lowest rates of HIV infection among those people who inject drugs – 1/8th the US rate and 1/20th that of Thailand, which maintains a fully draconian antidrug policy.
Califano and Bennett argue that legalization will only increase the use of legalized drugs. That is a fair opinion, but they then leverage this argument to conjure up stories of a massive increase in crime. They say that violent crime will increase because of drug use, and that property crime will increase because more addicts will need more money to feed their habits. This, of course, is ridiculous. Most violent crime is committed by people on alcohol or drugs like crystal meth, which was only recently introduced because of drug prohibition. With legalization, drugs would be affordable even for those with a minimum-wage job. The idea that property crime would increase because of legalization is far-fetched indeed.
Califano and Bennett argue that legalization would increase healthcare costs to taxpayers. They argue that 30 percent of taxpayers’ healthcare costs are attributable to drug abuse, that drug abusers on Medicaid are three times as expensive for taxpayers, and that for every dollar received in alcohol and tobacco taxes, we incur $9 of taxpayer expense. Of course, one can expect that such freeloader programs would experience such results. Free ambulances, free emergency rooms, free doctors, free hospitals, free medication – what would you expect? The secret truth is that government healthcare actually encourages drug abuse.
Furthermore, Califano and Bennett’s article reminds me of the study that found smoking kills 450,000 Americans each year. It gives you the impression that every year the equivalent of the entire population of a city the size of Atlanta just drops dead from smoking-related illness. But in reality, the study was only a "simulation." The simulation was designed to calculate the number of smokers who die each year. Yes, smokers do die younger on average than nonsmokers, but they still live well into their 60s, on average.
Let us take their three claims in order. First, what about that 30 percent of Medicaid dollars going to drug abuse? Well, the bulk of this expense is "attributable" to alcohol and tobacco, rather than to illegal drugs. For a fuller description, let’s draw from Califano’s own webpage, where he states,
Some 30 percent of Medicaid health care dollars are spent to treat the injuries from violence and accidents and the 70 plus diseases caused or aggravated by substance abuse and addiction.
So first he folds in the problems of tobacco and alcohol (which is the biggest cause of drug-related violence and accidents), and then he adds in “the 70 plus diseases caused or aggravated by substance abuse and addiction.” Furthermore, the poor pot smoker who gets hit by a car is part of this “30 percent of Medicaid health care dollars.” I am willing to admit, freely, that illegal drug use does cost the taxpayer a great deal of money on freeloader programs, but this 30 percent figure undermines the credibility of Califano and Bennett.
Next, what about Medicaid spending on drug abusers being three times higher than on non-drug users? Well, again they mix both legal and illegal drugs. They ignore the fact that marijuana use in and of itself does not contribute to higher healthcare costs. In fact, it is emerging as a very cost-effective way of treating various ailments, and it is now recognized as a likely treatment or even cure for certain types of cancer. Second, they ignore the fact that illegal drugs result in relatively more catastrophic incidents, like death from drug overdoses, whereas tobacco and alcohol result in relatively more chronic lingering ailments, like heart disease and lung cancer, which entail large expenses over long periods of time.
Now we go back to Mr. Califano’s webpage for some clarification. It turns out that Medicaid expenditure for drug abuse is not simply three to one here, but between two and three to one.
Medicaid patients with drug and alcohol problems cost $5,000 to $10,000 a year more in healthcare costs than those without such problems [i.e., $5,000].
So, not only do Califano and Bennett blame all health consequences on one aspect of behavior, i.e., drug use (which is scientifically illegitimate), but they also conflate legal and illegal drugs, and they take the top estimates of additional costs and then misreport those inflated numbers.
Finally, there is their claim that every dollar in alcohol and tobacco taxes collected results in nine dollars in government spending on federal healthcare, criminal-justice and social-service costs. I could not find a reference to this fact on the Internet, except in their work.
Admittedly, I have seen a study arguing that smoking results in social costs that are several times the amount of excise-tax revenue collected. However, this study forgot to include the benefits of smoking in its calculations and wrongly considered private costs to the smoker as social costs. When these are taken into account, smoking generates more tax revenue than social costs.
Another study finds that smoking causes absenteeism at work. However, this study just looks at whether an absentee worker was a smoker or nonsmoker. When you include other variables like weight, gender, age, and marital status, the statistical significance disappears.
When you read about research with alarming statistical findings, you are probably reading about biased research funded by the nanny state.
No one wants a needle park in his or her neighborhood, but that is exactly what prohibition brings. Prohibition also brings increased violence and property crime. Legalization would bring commercially produced products that are reasonably priced. Consumers would be able to afford the products and could consume them in the privacy of their own homes. Violence and property crime would decline. Sellers would be required to provide sufficient safety information and would be liable if they sold an inherently deadly product.
I have no doubt that if Califano and Bennett were in charge, they would invoke Rockefeller-style laws or even worse (Bennett once suggested that beheading drug dealers was "morally plausible"). The reality is that limited legalization has been shown to work, and that full legalization is the policy we should be working toward. The recent legislation sponsored by Representatives Barney Frank and Ron Paul is one step in the right direction.
 “Report of the Global Committee on Drug Policy,” June 2011, p. 6.
 Robert B. Ekelund Jr. and Richard W. Ault. “The Political Element in Science and Technology: SAMMEC II and the Antismoking Lobby,” Research Conducted for Savarese and Associates (August 1991), pp. 37
 See, for example, “The Costs and Benefits of Smoking Restrictions: An Assessment of The Smoke-Free Environment Act of 1993,” Executive Summary.
 See, for example, Willard G. Manning, et al., The Costs of Poor Health Habits, Cambridge, MA.; Harvard University Press, 1991; and Pierre Lemieux, “Social Costs of Tabacco: All Smoke, No Fire,” The National Post, January 20, 1999, p. C7.
 R. Ault et al., Applied Economics, 1991, vol. 23, issue 4B, pp. 743–54.
Reprinted from Mises.org.
Mark Thornton [send him mail] is a senior resident fellow at the Ludwig von Mises Institute in Auburn, Alabama, and is the book review editor for the Quarterly Journal of Austrian Economics. He is the author of The Economics of Prohibition, coauthor of Tariffs, Blockades, and Inflation: The Economics of the Civil War, and the editor of The Quotable Mises, The Bastiat Collection, and An Essay on Economic Theory.