The Cocaine Price Support Program

The US Department of Agriculture spent about 95 billion dollars in FY 2005. A plurality of this money went to the various direct and indirect price support programs that raise the cost of food. The second-largest pile of billion-dollar bills goes to programs that buy food for the poor, who naturally can't afford enough nutritious food because of the price-support programs. A few billion goes to various money-losing deforestation projects on public lands that damage the environment and raise the cost of plywood.

Now I'm sure that we can all agree that 95 billion dollars (up only $23 billion since the previous year, due to the cost-cutting efforts of our Republican President and Congress) would be a small price to pay for all these benefits. Unfortunately, just like the multi-trillion-dollar Social Security and Medicare obligations, America's largest price-support program is "off the books."

History of the Cocaine Price Support Program

The Cocaine Price Support Program (which today includes thousands of other commodities as well, such as Rush's Oxycontin, diamorphine, THC, testosterone, etc.; the program is sometimes referred to as the "Drug War") dwarfs all other price support programs. The Drug War is not contained within a single government department. The Drug War is not even contained within one government or group of governments, but is an integral part of them all. There are many urban legends claiming that one government or another (e.g., Holland) does not participate in the Drug War. Academic research has shown these rumors to be false. The Drug War extends throughout the Solar System and beyond.

Drug price supports have a very short history, as government functions go. There were no US price supports for drugs of any kind until the Harrison Act (passed December 17 1914, took effect April 1915). The Harrison Act specifically reserved the rights of physicians to prescribe opiates. Within months this had been "interpreted" to mean the right to imprison physicians for prescribing opiates. The courts allowed this bizarre progression down into legal Wonderland, and the Federal government had its precedent. The bloodstream of all US citizens was now owned by a government agency.

More widely felt at first than the Harrison Act was the Ethanol Price Support Program ("Prohibition"), Amendment XVIII, passed in 1919. While the EPSP had some of the same effects as the Drug War (more murders, more deaths from adulterated products, etc.), it fell short of its potential for several reasons. The most prominent of these reasons was that Alcohol Prohibition operated within the US legal system, and thus died ignominiously in 1933 when it was repealed.

The Drug War did not repeat this mistake. The Controlled Substances Act of 1970 and the other informal traditions of the Drug War simply asserted their own legitimacy, with no appeal to Constitutional authority. In fact, many government agencies draw the authority for their actions from their alleged usefulness to the Drug War, rather than from any obsolete Constitutional precedents. The invasion of Panama, foreign aid to the Taliban regime and other dictatorships, etc., derived their moral authority from the Drug War itself.

The Inversion of Authority

This new inverted authority supersedes all other civil authority, in the same way that the witch manias of medieval Europe did. At this point in history the entire US population, drug-using or not, lives in a state of perpetual Double Secret Probation. At any time of day or night, black-masked hoodlums waving German submachine guns and cursing wildly may kick in your doors, shoot you and/or your Labrador retriever and throw your family on the floor. Your property may be forfeited without trial. And just as in the witch manias, all sorts of false testimony can be used against you without recourse. If the ritually masked hoodlums bring their own drugs with them, and "find" them on your property, you are guilty. (In Dallas, they only have to "find" some billiard chalk… but that is another long story).

The Conspiracy Theory of Drug Price Supports

There are many in the mainstream media who promote a conspiratorial origin of the Drug War. Their claim is that the Congress, CIA, DEA, etc. (all groups noted for their altruism and concern for the common man) are engaged in a massive conspiracy to promote public health by raising the cost of certain drugs. Like most conspiracy theories, it is somewhat nondisprovable as to its claims for the motivations of the political classes. However, we can disprove the notion that raising the cost of drugs to users is good for them.

There have been many controlled experiments in this field. Take the previously mentioned case of US alcohol Prohibition. Deaths from adulterated alcohol soared during Prohibition, then went back down after repeal. Murder rates also went up, as did the economic cost of providing alcohol. Alcoholism rates were not affected. Then to add insult to injury, large well-controlled medical studies proved that moderate alcohol consumption, especially of red wine, is an important component of cardiac health. So it's a good thing that Prohibition failed so completely, or millions would have suffered early heart attacks.

Another controlled experiment was Canada's attempt to put a $5 tax on cigarettes. Mass smuggling began immediately through the Mohawk Nation, with the usual murders and mayhem. Did Canadians quit smoking because their nicotine cost more? Did anyone expect them to? Of course not. New York has tried the same thing many times, with similar consequences.

The same story is repeated with opiates and cocaine. Before the Harrison Act, Americans used cocaine and opiates. Just like Rush Limbaugh, most of them used their drugs to overcome the various pains of life, while continuing to hold down their jobs and live their lives. Cheap heroin and cocaine didn't cause financial havoc for the users. And of course, most people weren't affected… because they didn't touch the stuff. Abstinence was somewhat promoted by the fact that drugstore sellers of legal drugs didn't come into the junior high schools and push their wares.

Death rates from illegal drugs are less than precise. Still, it is clear that hundreds of thousands of people die from tobacco use yearly, while deaths from all illegal drugs are estimated to be in the neighborhood of 5,000. Deaths from alcoholism and alcohol/drug interactions are in the tens of thousands; overdose deaths from marijuana (a drug with some substitution potential for alcohol) are zero.

The final nail in the benevolent-conspiracy theory is this: it is forbidden to sell safer alternative recreational drugs. The pharmaceutical companies are quite capable of providing drugs that mimic alcohol, nicotine, or whatever you want with fewer side effects. In fact, there is an alcohol mimic that has a "sober-up pill" to go with it; anyone concerned about the safety of children on the highways would have to see this as a positive social good. But there is no FDA category for "recreational drug." Anyone who tries to save the cirrhotic liver of the alcoholic will be locked up. This shows that whatever the motivation of the Drug War, it isn't concern for health.

The Costs of Drug Price Supports

Cost #1: Taxes. The US Bureau of Justice Statistics has moved some of the drug war off the books since 2003; they now count "only those expenditures aimed at reducing drug use, rather than those associated with the consequences of drug use." This Enronically reduces official Federal drug war spending to only 13 billion dollars, from the 19 billion of 2003. The most recent figures the site provides on state spending are from 1998, given as 78 billion dollars. Given that the cost-cutting Republicans have been very busy since 1998, I think we can safely say that the actual direct tax costs of the drug war are over $100 billion.

Cost #2: The high prices of illegal drugs. All estimates of this cost are suspect (they are provided by those with a vested interest in making the problem appear as big as possible). But while the actual number of drug users may be open to debate, there is no question that legal heroin and cocaine only cost about as much as aspirin; marijuana is literally a weed. Now that they are illegal, they cost the economy tens of billions.

Cost #3: Loss of labor. About 1.5 million people were arrested for drug possession and/or sale in 2003. The overall US prison and jail population is over 2 million. Let's say roughly half that number is related to the drug war. When each drug user is criminalized, they turn from a worker making an average of $40,000 to an inmate costing around $30,000; that would be another $70 billion or so annually.

Cost #4: Real (not victimless) crime. Murder has soared since the Drug War expanded in the 1970s.

Other crime rates attained heights in recent decades that make the Wild West look like Amish country. Inner-city youth can find easy "careers" as drug distributors. If drugs were legalized, these careers would disappear, along with drive-by shootings and "gangsta culture."

Cost #5: Terrorism. Every half-baked wannabe dictator with a few AK-47s can fund his nonproductive lifestyle with illegal drug sales. From the Taliban to the FARC in Colombia, US-designated "terrorist" groups make money from the US drug trade. If cocaine and heroin cost no more than aspirin, all these moochers would have to get real jobs.

And of course, all the law enforcement effort and prison space that goes into catching and jailing marijuana users is not available to look for murderers and terrorists. After 9-11, supposedly our politician's security priorities changed… but they didn't. Any serious attempt to catch terrorists smuggling weapons (or low-flying drones carrying biological weapons) doesn't have a chance of finding them among the thundering herds of drug smugglers.

So…. Why Drug Price Supports?

Drug Prohibition's costs are obviously much greater than any possible benefit to the general public. So why does every drug-using political hack from Rush Limbaugh to the most leftist pot-smoking Democrat advocate Drug Prohibition? For the same reason that politicians support price supports for milk or sugar: they increase the power of politicians. All price supports confer arbitrary power on those who administer them. Every "cost" I've listed above is a "profit" for the parasitic class. Let's run through them again:

Cost #1: Taxes, ~$100 billion.

To the politician, a bureaucracy isn't a cost. It's a source of patronage and lucrative contracts.

Cost #2: The high cost of illegal drugs.

To the politician, an artificially high price isn't a cost. It's a source of funds; study the career of Chiang Kai-Shek or any number of US politicians.

Cost #3: Loss of labor.

The ability to lock political opponents up at will is worth billions to any politician. Not to mention, felons can't vote or own firearms, so the more convicts, the fewer effective political opponents. Of course politicians' children may get arrested occasionally for Prohibition violations, but that just makes them more dependent on Dear Old Dad.

And like any other bureaucracy, the prison industry is a source of patronage and contracts.

Cost #4: Real (not victimless) crime.

There was no Federal gun control in the US until after Prohibition; pre-1935 US citizens had machine guns, artillery pieces, tanks, whatever took their fancy. The first national gun control law was passed in the 1930s, supposedly as an anti-gangster measure; it put a $200 tax on great-Grandpa's tommy gun. Today's gun control is justified as an anti- "gangsta" measure; supposedly if we confiscate Grandma's .38 revolver, this will prevent drive-by shootings from inner-city youth using illegal full-auto AKs. While not heavily dependent on logic, the contemporary support for gun control is driven largely by the violence caused by Prohibition.

Cost #5: terrorism.

Needless to say, terrorism is not a "cost" to those who want to expand government power. Drug Prohibition can be used by the US Imperator as a casus belli against any nation anywhere, for what nation does not "harbor" evil drug lords who sell their wares in the US? Even the sinister Canadians have numerous websites selling cut-rate pharmaceuticals to America's elderly poor. Drug Prohibition can be used as an excuse to give foreign aid to literally any regime; even the Taliban received "anti-drug" money.

The Obvious Solutions

The obvious solution for the productive classes is to abolish all price supports, whether for milk, cocaine, or sugar. Abolition of Drug Prohibition in the US would effectively end it worldwide. This would return trillions of dollars and millions of people to productive work, and divert their support from the parasitic classes around the world.

The obvious solution for the political class is the opposite; their solution is to try to make nicotine, caffeine, and phenylethylamine illegal too. If you like your green tea or dark chocolate, better oppose cocaine price supports on principle.

February 19, 2005

Political Theatre

LRC Blog

LRC Podcasts