Stop Taxing Non-Addicts by Milton Friedman

Stop Taxing Non-Addicts

by Milton Friedman

From Reason Magazine, October, 1988

Legalize all drugs. They could be sold through ordinary retail outlets-primarily, I would presume, drug stores. There should be no FDA or other controls on the drugs. (In fact, I'm in favor of abolishing the FDA for reasons I've set out elsewhere.) However, I believe there should be restrictions on sales to minors.

With respect to restrictions on advertising, I feel uneasy about either position. I shudder at the thought of a TV ad with a pretty woman saying, "My brand will give you a high such as you've never experienced." On the other hand, I have always been very hesitant about restrictions on freedom of adver tising for general free speech reasons. But whatever my own hesitations, I have very little doubt that legalization would be impossible without substantial restrictions on advertising.

It's almost impossible to have a confident view about how legalization would affect patterns of usage. Some elements of legalization would tend to reduce the number of addicts, and some would tend to increase it. As to which would be dominant, I have no idea.

Currently, for, example, it pays a pusher of drugs to make a capital investment in creating an addict. He gives somebody a couple of doses free to get him started, because once he creates an addict he has a captive market. Given that the drug is illegal. his customer is likely to stick so him. After legalization on the other hand, it won't pay anybody to create addicts. This undoubtedly would tend to reduce usage.

There's no doubt, however, that legalization would drastically reduce the market price. The actual cost of producing drugs, whether cocaine, marijuana, or whatnot, is very low. They sell for as much as they do now because of the costs of bribing the relevant officials, making it financially attractive for people to take a chance on getting killed or going to jail, etc. So reducing the costs of bringing drugs to market would result in lower prices, which would undoubtedly have some tendency to increase the quantity demanded. Then there are also different effects on supply, so it is almost impossible to say what the net result would be.

It may well be that there would be more addicts, and I would regret that result. I believe that drugs do an enormous amount of harm. But no law has ever been passed that had zero negative effects. Judging every law requires balancing negative and positive effects. In considering the case for legalization, it is important to make a sharp distinction between addicts who hurt themselves and a legal process (that is, prohibition) that leads to a much larger number of nonaddicts being hurt.

Legalizing drugs would reduce enormously the number of victims of drug use who are not addicts: people who are mugged, people who are corrupted, the reduction of law and order because of the corruption of law enforcement, and the allocation of a very large fraction of law enforcement resources to this one particular activity. There are millions of people who are not addicts who are being harmed by the present system-not to mention the harm to the domestic pobtical systems of countries such as Colombia and Peru.

The costs of drug prohibition for nonaddicts, such as the increased risk of getting mugged, are the equivalent of taxes: they are government-imposed costs. We're imposing right now these very heavy costs on nonaddicts in the mistaken belief that we are thereby helping addicts. That's not sensible.

It would not be sensible after legalization, either. So although addicts should then be treated the way every other citizen is treated-getting the medical treatment provided any other individual-they should not be given special treatment compared to victims of other medical problems. I do not believe it is appropriate to impose special taxes on nonaddicts in order to provide benefits to addicts.

It would be very desirable after legalization for private, voluntary organizations to form for the purpose of treating addicts. I do not believe this is an appropriate function of government any more than I believe health insurance is an appropriate function of government. On the other hand, if government has a welfare system or a negative income tax, that should be available to addicts as well as anybody else. We should not impose on addicts any greater stigma than we attach to other victims. Equal treatment and equal opportunity ought to be the hallmark.

As I wrote in my Newsweek column on drugs 16 years ago, I believe that adults -by this I mean people whom we regard as responsible, and as a practical matter this means people who are neither insane nor below a certain age should be responsible for their own lives. I'm a Libertarian-a limited government libertarian, not an anarchist libertarian. People's freedom to make their own decisions is my fundamental objective.

Milton Friedman, who received the 1976 Nobel Prize in economics, is the author of numerous books, including, with his wife, Rose, Capitalism and Freedom and Free to Choose. These remarks are adapted from a telephone interview.