A Free Market Solution to the War on Drugs?

free market solution to the war on drugs pill vial over dollar bills

Is a free market solution to the war on drugs the best way to end the conflict? A decisive answer may be difficult, but it is safe to say the United States’s prohibition approach has been a failure. We have been fighting the “war on drugs” for almost 50 years and have lost every single battle. Tens of billions of dollars later (and millions of lives lost), street drugs have never been so cheap, potent, varied, and accessible; the drug cartels so powerful, profitable, and well-armed; drug interdiction so pathetically ineffective; governments so corrupted in drug producing and transporting countries; and drug cartel violence so frequent and unpunished.

The War on Drugs, 50 Years Deep

Drug cartels have developed and implemented a brilliant and robust business model that has effortlessly survived and thrived despite the futile efforts of the Drug Enforcement Agency (DEA) and Border Patrol; frequent jurisdictional and succession wars; imprisonment or assassination of top leaders; corruption scandals; well publicized massive drug busts; repetitive government crackdowns; and economic recessions.Hand dropped phone and pills after overdosing during the war on drugs

In the most affected countries, the drug cartels are better run, better armed, and more politically and economically powerful than the governments that theoretically are meant to control them.

Drug cartels could not exist without active United States support and quiet acquiescence. Our unconscionably stupid drug policies have provided the cartels with a massive market; endless billions of dollars; lethal weapons; money laundering channels; distribution networks; and training in gangland organization.

The drug cartels are flexible; fast moving;  and remarkably responsive to market forces. The governments theoretically fighting them are slow witted and slow moving; bureaucratically inept; and easily corruptible.

If insanity is doing the same failing thing over and over again- while continuing to expect a different result- then US drug policies are certifiably insane and perpetually self-defeating.

The Perfect Storm Warning Ahead

A great American philosopher, Yogi Berra, once malapropped “It’s tough to make predictions, especially about the future”. But the future of the war on drugs does look easily predictable- and it is sure to be much, much worse than its past. Unless we adopt radically different drug policies, an explosion of street drug lethality seems looming and inevitable.

Many factors have greatly increased the lethal dangers now inherent in every single purchase of street drugs:

  1. Chemistry: Ever more powerful and less detectable synthetics are being cooked up by ingenious labs (especially in China).
  2. Potency: Fentanyl is incredibly more lethal than any previous drug and lurks as a possible contaminant in all street substances, however labeled.
  3. Portability: The more potent the drug, the more conveniently it can be smuggled. Just one suitcase of fentanyl has enough lethal punch to kill millions.
  4. Vaping: An entire generation of young kids has been exposed early to legal e-cigarettes, already leading many to mature later into vaping dangerous street drugs.
  5. The Internet: The dark web provides a convenient Amazon-like purchasing vehicle that makes drug distribution even more efficient, invisible, and impossible to stop.
  6. Law and Order: The Trump administration has doubled down on the failed supply-side interdiction efforts of the past, while doing little to promote the drug rehab necessary to achieve demand reduction.

Any one of these dangerous driving forces would be problematic; all interacting together, they are likely to be catastrophic.

A Free Market Solution to the War on Drugs?

Every street purchase of a drug today can lead to quick death. The buyer never knows what he’s buying and the seller often enough does not know what he’s selling.

This growing crisis offers perhaps the only opportunity to finally win the drug wars against the cartels. It is long past time to admit that drug prohibition and criminalization is, and always has been, a total flop. Instead of continuing the futile and failed effort to destroy the cartels, we must shift gears and learn how to better compete with them. A free market approach may succeed where “war” has failed.

The best way to reduce the power of cartels is to attract away their customers and radically reduce their market share. The key is to legalize drugs; guarantee their quality and safety; and price them attractively. Why would someone buy a potentially lethal, contaminated, unknown poison pill on the street if he can instead buy a tested and much safer legal equivalent in a government licensed and monitored store, and the same price. Other countries have had marked success with this alternative approach.

Pricing the Cartels Out of Business

statue of liberty holding pill bottle representing american free market solution to the war on drugs

But how exactly would this free market solution to the war on drugs work? The key is pricing.

Results in states that have legalized pot are promising, but there is a big hitch in how it has been done. State governments have found it irresistibly tempting to piggyback hefty taxes on to the legalization of pot. This has been a surprisingly successful vehicle to raise large tax revenues, but often winds up pricing legal products out of the market. Drug dealers can easily and profitably undercut the inflated legal prices to retain customers and market share.

If we are serious about wanting to reduce drug deaths, the price must be right to drive contaminated cartel products off the market. The combination of affordable price and guaranteed quality would give legal drugs an unbeatable edge over illegal.

There would be many happy consequences: reduced overdoses, deaths, hospital costs; undercutting cartel finances, political power, ability to corrupt, troop strength, and firepower; cutting drug crimes and costly prison beds; increasing the stability of narco countries and reducing migration from them; ending the totally wasted funding of the war on drugs.

It is paradoxical that Republican administrations are typically for market solutions, except when it comes to drugs; against big government interventions, except when it comes to drugs; for states’ rights, except when it comes to drugs. Painful experiences teaches that the drug wars against the cartels can only be won in the heartland, via marketplace competition and treatment programs, not at the border.

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Photos Courtesy of Shutterstock. 

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