Pubdate: Tue, 07 Aug 2007
Source: Financial Times (UK)
Copyright: The Financial Times Limited 2007
Author: Willem Buiter
Note: The writer is professor of European political economy at the 
London School of Economics' European Institute.


The UK government is considering reclassifying cannabis from a class 
C drug to a class B drug, carrying higher penalties for using and 
dealing. As an economist with a strong commitment to personal liberty 
and responsibility, my preference would be to see all illegal drugs 
legalised. The only exception would be substances whose consumption 
leads to behaviour likely to cause material harm to others.

Following legalisation, the production and sale of these drugs should 
be regulated to ensure quality and purity. They should also be taxed, 
as are tobacco products and alcoholic beverages. Greater resources 
should be devoted to educating the public, especially children and 
teenagers, about the health hazards associated with the drugs; more 
money should be spent on the rehabilitation of addicts.

Ideally legalisation should occur simultaneously in a number of 
neighbouring countries, preferably at the level of the European 
Union. When the Netherlands became an enclave of tolerance of drug 
use, drug users from all over Europe congregated there.

The principle-based argument for legalisation is that behaviour that 
harms others ought to be criminalised, not behaviour that hurts only 
the person engaged in it. It is not the government's job to protect 
adults of sound mind from the predictable consequences of their actions.

If the public is ill-informed about the consequences of drug taking, 
there is an educational role for the state. Children should be 
protected from drugs, as they are from tobacco and alcohol. So should 
the mentally ill and mentally incapacitated. Parents should be 
paternalistic, but when it comes to mentally competent grown-ups the 
state should not be. It is not the responsibility of the state to 
ensure our "happiness" - whatever that is. That is the road to a 
Brave New World.

The argument that countries with publicly funded or subsidised 
healthcare have the right to proscribe the use of drugs likely to 
cause harm to the user is a ludicrous misuse of the concept of an 
externality. Should we ban rugby because it is more dangerous than 
tiddlywinks? If it is considered unfair that those who do not use 
drugs end up subsidising the care of those who do, this is an 
argument for the National Health Service to develop a policy of 
discriminating among patients on the basis of how they have 
contributed to their illnesses.

A pragmatic argument against criminalising drugs is that 
criminalisation creates vast rents and encourages criminal 
entrepreneurs to use violence, intimidation, bribery, extortion and 
corruption to extract these rents. Another pragmatic argument is that 
it is pointless to waste resources fighting a war that cannot be won. 
The losing war on drugs wastes resources that could be used to fight 
terrorism and other crimes.

Another important argument for legalising, in particular, all 
cultivation of poppy and of coca (and their illegal derivatives) is 
that this would take away a vital source of income and political 
support for terrorist move-ments, including the Taliban and al-Qaeda 
in Afghanistan, and Colombia's Revolutionary Armed Forces (Farc) and 
various paramilitary groups.

The United Nations estimates that opium production in Afghanistan 
grew to more than 6,000 metric tonnes last year with a value 
exceeding $3bn. It is the origin of more than 90 per cent of the 
world's illegally consumed opiates.

A significant portion of the profits flows to the Taliban, who act as 
middlemen in the opium business. They combine extortion and threats 
of violence towards the poppy farmers with the sale of protection to 
these same farmers against those who would destroy their livelihood, 
mainly the Nato allies and the Afghan central government.

Following legalisation, the allies in Afghanistan could further 
undermine the financial strength of the Taliban and al-Qaeda by 
buying up the entire poppy harvest. If a sufficient premium over the 
prevailing market price were offered, the Taliban/al-Qaeda middle-man 
could be cut out altogether, and thus would lose his tax base. 
Winning the hearts and minds of poppy growers and coca growers is a 
lot easier when you are not seen as intent on destroying their livelihood.

This proposal for legalising poppy growing regardless of what the 
poppy is used for is much more radical than the proposal from the 
Senlis Council to license the growing of poppy in Afghanistan only 
for the production of essential medicines. The Senlis Council 
proposal would not end the problem of illicit poppy cultivation 
co-existing with licensed cultivation. With the illicit price likely 
to exceed the licit price, the Taliban would retain a significant tax base.

Is legalisation of all opiates an integral part of the proposal that 
the allies procure the entire poppy harvest in Afghanistan? Consider 
procurement without legalisation. The allies would find themselves 
each year with the largest stash of poppy the world has ever seen. 
What to do with it?

The entire global medical demand for morphine, codeine and other 
legal poppy derivatives could be satisfied - possibly even free of 
charge. The global demand for medicinal opiates at a zero price would 
greatly exceed the current medicinal use of opiates, since many 
developing countries are either in effect priced out of the legal 
market altogether or are, for budgetary reasons, restricted to 
purchasing inadequate quantities that leave widespread, unnecessary 
suffering among poor patients. Supplying the world's demand for 
medicinal opiates free of charge would create economic problems for 
the current licit growers of poppy for opium, in Turkey, India and 
elsewhere; well-targeted develop-ment aid could address this issue.

If poppies could not be profitably turned into biofuel and if opium 
and heroin remained illegal, the rest of the allies' poppy stash 
would have to be destroyed. This would drive up the street price of 
opium and heroin and create even more massive rents for the remaining 
suppliers. Poppy growers would try to withhold poppy from the allies' 
procurement round in order to sell it later in the illicit market. 
The Taliban would retain a tax base. Legalisation is crucial for the 
success of this squeeze play on the Taliban.

If opium and heroin were legalised, the allies' stash could be sold 
to regulated producers/distributors of opium, heroin and other 
formerly illegal poppy derivatives. Our chemical and pharmaceutical 
industries, and indeed our cigarette manufacturers, would be 
well-positioned to enter this trade. The profits made by the allies 
on the sale of the stash could be turned over to the Afghan 
government. It surely makes more sense for the government to tax the 
poppy harvest than for the Taliban to do so.

So legalise, regulate, tax, educate and rehabilitate. Stop a losing 
war, get the government off our backs, beat the Taliban and deal a 
blow to al-Qaeda in the process. Not a bad deal!
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MAP posted-by: Richard Lake