It's Time We End The War On Drugs

40 years of the War on Drugs has enhanced the power of the state, eviscerated our property rights, eroded our personal freedom and radically disturbed the peace.

Federal, state and local law enforcement officers fight this War on Drugs in the vain hope that American citizens will not destroy their lives by abusing drugs. Yet today the nation is awash in drug abuse. What began as a noble effort to protect American citizens from themselves has backfired. It’s a good bet that today the average citizen is more likely to be injured by violence that attends the drug trade than by drug use itself. This is the true tragedy of the War on Drugs.

Simply put, the War on Drugs outlaws the civility, order and property rights inherent in a free market in drugs. It drives the demand and supply of drugs underground where, by definition, criminals reign supreme. As a result, the black market in illicit drugs is riddled by dog-eat-dog violence. Countries where illicit drugs are produced are terrorized by drug lords. Countries like the United States where illicit drugs are demanded and consumed are terrorized by drug pushers who menace grade school play grounds and lurk in suburban neighborhoods. Gangs of drug dealers routinely shoot up urban neighborhoods. Police efforts to end the drug trade result in SWAT team terrorization of innocent families, corrupted cops, wanton property confiscation and the incarceration of a good percentage of American citizenry.

In the face of this mayhem, there are among us those who still defend the War on Drugs. They contend that the billions (some say trillions) of tax dollars spent fighting this noble War is worth it. But surely it is not worth the ever growing number of dead and wounded in our streets.

Just the other day on a national radio talk show a pundit casually commented that he is against ending the War on Drugs because he has too many friends who suffer from addiction to illicit drugs. This intelligent, compassionate man missed the point entirely! The point is that the War on Drugs has been raging for 40 years and it has not prevented his friends from buying and using illegal drugs!

The truth is that the War on Drugs, because of the economics of the black market, proliferates drug abuse and encourages the use of “home brew” drugs, like crack cocaine and crystal meth. These offshoot drugs are even more corrosive than the drugs originally outlawed.

The economics of the black market are simple: When a government outlaws drugs, it severely restricts supply but it doesn’t make drugs or the demand for drugs go away. Those who demand drugs can still buy them on the black market but at a price far higher than the free market price that would otherwise obtain. In short, government prohibition drives up prices and profit margins. Huge profit margins are the only reason pushers can afford to deal drugs to children. The high price of illicit drugs is the only reason meth heads risk life and limb to make their cheap brew. By dealing in illicit drugs violent criminals can earn fantastic amounts of money by doing what they do best, breaking necks. The criminal manufacturers, distributors and customers they extort are beyond the protection of legitimate law enforcement.

If the government were to legalize drugs, free market producers (including backyard growers), enticed by huge profit margins, would enter the market. The supply of drugs would rise. Prices would fall. In time profit margins would shrink as supply adjusts to demand. Only the most efficient and consumer-oriented producers and distributors could successfully compete. This is the way of the free marketplace. This is the way of the law of supply and demand.

Drug lords may enjoy cracking heads and killing people in order to make a fantastic sum of money, but would they continue cracking heads and killing people for miniscule profit margins? Common sense and experience argue against it. Organized criminals are powerless in the face of the law of supply and demand.

Today, nobody extorts or murders beer manufacturers and distributors. Why? The reason is obvious: beer manufacture and distribution is legal. Thus, the profit margins of beer manufacture and distribution are set by the free market not by thugs. Profit amounts to a few cents on the dollar, a far cry from the enormous profits of black market bootleggers during the era of alcohol Prohibition.

From 1920 to 1933 the American federal government fought a War on Alcohol. The outcome of this war was remarkably similar to the outcome of the War on Drugs. This should not be surprising because the laws of economics apply everywhere and always to trade in all manner of goods and services. During Prohibition the manufacture and distribution of alcohol was driven underground. The price of alcohol increased. Profit margins drastically increased. Organized crime moved in by means of terror and extortion. Gangsters grew very, very rich.

Sound familiar?

However, when Prohibition ended, there was no longer big, easy money to be made bootlegging alcohol. Organized crime left the alcohol trade and moved into gambling and prostitution, where big, easy money could still be made due to continued government prohibition of these activities. Since crime no longer paid, many ex-rum runners went “legit” and integrated back into legal and honest society.

While some alcohol-related violence continues to this day in legal bars and night clubs, these few instances of violence are the result of individual, personal disputes. Machine gun-toting, organized gangsters no longer gun down innocent bystanders in the streets over the beer trade. The extent and proliferation of alcohol-related violence today is drastically reduced because the profit-motive from running illegal alcohol no longer exists.

History doesn’t prove economic theory; economic theory explains history and predicts the future. Thus, when the drug trade is legalized, we know the extent and proliferation of drug-related violence will be drastically reduced.

The bottom line is that if people want drugs, they will get them one way or the other. Black market killers and thieves will be eager to supply illicit drugs because only they are willing to extort and terrorize in order to earn enormous profits. The logic is indisputable. The history is illustrative. The only question is, given the logic and history of the matter, why do common sense Americans still insist on a wrong-headed policy that allows the law of supply and demand to work against them, a policy that guarantees that the only people allowed to profit from the drug trade are the dregs of our society?

The War on Drugs is a classic case of economic illiteracy and unintended consequences. It’s time the laws of economics worked for us instead of against us.

It’s time we end the War on Drugs!

Questions For Mr. Obama Over Dinner

Follow the link in this article, fill out the appropriate form and you could be the lucky person selected by the Obama campaign to have dinner with the President. By the way, no need to actually contribute to the campaign for Mr. Obama's re-election. As in all such contests, the fine print allows individuals to enter the dinner lottery FREE OR CHARGE. I say go for it. And I did.

Should I be selected to have dinner with Mr. Obama, I thought it might be prudent to prepare with appropriate questions for our fearless leader. I limit myself to questions because I have more to learn from him than he does from me:

1) Mr. President, every month the government releases data on the status of jobs created or lost in this nation, and every month you or your administration remind us that during your tenure as President the nation has experienced many, many consecutive months of private sector job growth. Tell me Mr. President, what specific, governmental economic policies that you or your administration initiated are responsible for this private sector job growth?

2) Mr. President, you recently commented that "there are some structural issues with our economy where a lot of businesses have learned to become much more efficient with a lot fewer workers." As an example of such structural unemployment, you named the banking industry's use of ATM's and the airline industry's use of check-in kiosks. Would you cite the economic theory which explains this "structural" unemployment argument?

3) Mr. President, you once said: "I do think at a certain point you've made enough money...” Would you please tell me at what point you and your wife will have made enough money?
  

A Question For Progressive Thinkers

A physician and a farmer freely and voluntarily engage in a trade: the physician takes the farmer's tonsils out in exchange for a dozen, fresh chicken eggs.

Which trader is being taken advantage of and, consequently, must be unsatisfied by the trade?

New Leftist Mantra: Big Business Is Sitting On Trillions!

The left has a new talking point exemplified by this excerpt from a post at DemocraticUnderground.com:

"Big corporations are enjoying VERY robust profits and are sitting on trillions in cash reserves. But they are not expanding and hiring, at least not to the levels they should."

Juan Williams just got through saying basically the same thing on the Sean Hannity Show a few minutes ago. During a newsbreak, I heard the ABC News announcer say virtually the same thing.

This new talking point betrays the left's distrust of the free market and it's infatuation with government overseers and spenders. In the post above the writer presumes to know the levels at which business should be "expanding and hiring." He also presumes to know better than the business owners and directors themselves. Unspoken is the implication that "big corporations" are sitting on trillions in cash reserves because they are greedy, profit-hungry goliaths that are preventing the little guys from sharing in this cash reserve bonanza. Also unspoken is the presumption that these trillions in cash reserves should be taxed away from the private sector and spent by the public sector because those in Washington know best how trillions in cash reserves "should" be spent.

Leftists like Juan Williams who spout such collectivist nonsense should be challenged with a basic and simple question: Who has the right to determine how money should be spent? The individuals who own that money? Or politicians and bureaucrats?

In other words: Do you believe in the principle of private property, or not?

Mr. Williams was recently awarded a $2-million contract by Fox News. Who does Mr. Williams think has the right to determine how that $2-million in private property should be spent or invested? Mr. Williams himself? Or federal bureaucrats and politicians?

I suspect corporations are sitting on trillions in cash reserves for the same reason the mass of American individuals are sitting on trillions in cash reserves: uncertainty. Before business invests capital in expansion and hiring, it must be confident that the return on such an investment will be worthwhile. Apparently, business is not confident that their return on investment in expansion will be greater even than the paltry interest earned on savings. This is how pathetic the business climate is in this country at the moment.

The investment climate in this country is not much better. Why should an individual with investable cash bet on today's chancy and lackadaisical market? The demand to hold cash is high no matter who you are. This is why individuals hesitate to spend their disposable income. People sense crisis around the corner. They are preparing to deal with this crisis as best they can.

The only spendthrifts in today's economic climate are politicians and bureaucrats. They can afford it. They're playing with house money, i.e., money they've either extorted, borrowed or printed.

Inflation Portent

According to this article at CNSNEWS.COM "the Fed has surpassed mainland China as the top owner of publicly traded U.S. Treasury securities." There can be no doubt that the Fed is monetizing U.S. debt, which can mean only one thing: our government has decided -- as all governments eventually and inevitably decide -- that the easiest way out of the hole it has dug itself is not spending reductions or tax increases but money printing. Inflation is the means most preferred by politicos because inflation allows them to repay debt with devalued money. Inflation is their silent partner who, at least in their mind, allows them to have their cake and eat it too.

The game they are playing reminds me of house-flipping during the housing bubble. The money is easy and plentiful so long as you are not the unlucky player left holding the bag when the bubble bursts. The problem is the bubble they are fooling with is the money supply. The fools do not appreciate the critical role money plays in our modern, division-of-labor economy. For the most part, modern human beings dwell in huge cities. The lifeline for these human beings is money, money they either earn by barter or obtain by government gifts, grants or subsidies. As the value of money declines, the stuff men need to live increases in price. Foodstuffs become dear.

This difference between the United States in 1929 and the United States in 2011 is the number of Americans who are self-sufficient, who have talents and skills suited to barter for stuff men need to live. In the time of the Great Depression a vast majority of the country was rural. People were accustomed to being largely self-sufficient. Moreover, people then were producers first and consumers second. Nowadays people do not produce what is needed to live. They produce -- at least those few who actually produce -- what is needed to play, to entertain, to amuse, to gratify. For years and years after the War Americans have increasingly lived primarily as consumers. This trend must and will take its toll.

Another Banner Day For Property...Freedom...Peace

Today I learned that the United States is conducting a "secret" air war in Yemen.

I also learned that on Tuesday of this week a U.S. Dept. of Education SWAT team invaded a California home and "reportedly roughed up a man."

Meanwhile, in Atlanta the Obama administration is in court defending itself against a law suit brought by Florida and various other States contending that ObamaCare is an unconstitutional overreach of federal power.

On Wednesday, back in Washington, the U.S. Dept. of Agriculture announced it has awarded $17.4-million to fund "pilot projects that will begin exploring how to establish a market for greenhouse gas (GHG) credits, a key component of a cap and trade system." (A cap and trade system, I might add, that has no chance of being passed in the Congress.)

While all this was going on, President Obama was at a northern Virginia community college saying that cutting federal spending on environmental and educational programs "is not our history, that is not who we are." He went on to say that he doesn't "accept that future for the United States of America."

How can anyone who values property, freedom and peace not be alarmed by these events?

That the United States is engaged in a secret war in Yemen is not shocking. Presidents making war around the world without overt Congressional consent is commonplace in this day and age. However, this news comes on the heels of a controversey occasioned by this President's flouting of the requirements of the War Powers Act. Apparently, we have a President in Obama who believes he need not be accountable to Congress or to the people for violating on a whim the sovereignty of foreign nations by means of military force (despite campaigning against such unaccountable use of military force). If the President notified Congress of his use of military force in Yemen, he did so behind the back of the American public.

But operating behind the back of the American public is standard procedure for this President. ObamaCare was rushed through the Congress largely on the word of this President. Few in Congress understood the provisions of the thousand-plus-pages bill. Many Congressman admitted they had not even read the bill. Throughout the process of passing the bill, the media centered its coverage on Obama's folksey explanations of the bill, but what he had to say was many times at odds with the bills provisions. Yet, he was not challenged. For example, Obama argued that the provision of the bill which mandated that Americans purchase health care insurance was not a "tax." To call the mandate a "tax" would have violated the President's famous pledge not to raise taxes on Americans who earn less than $250,000 per year. Yet, yesterday in federal court the Obama administration argued that the ObamaCare mandate is a "tax."

Bald-faced lies are the rule rather than the exception for this President and his administration. Except for internet sources, his lies are rarely if ever challenged. On June 4, 2011 this President stood before auto workers and said: "Chrysler has repaid every dime and more of what it owes American taxpayers for their support during my presidency.” This statement is a bald-faced lie and, on this occasion, the mainstream media did call him on it. According to the Washington Post (and the U.S. Treasury Department) "U.S. taxpayers will not recoup about $1.3 billion of the entire $12.5 billion investment when all is said and done." Any administration dithering to the contrary is nothing more than Clintonesque parsing of the language (hiding behind interpretations of what the meaning of "is" is).

When the President asserts that cutting massive federal spending on environmental and educational programs "is not our history," he is lying. A cursory review of U.S. history will reveal that massive federal spending on the environment and education is a relatively new phenonmenon with roots stretching no further back than the 20th century. Any honest and impartial student of U.S. history will admit the truth of the matter. Could they be informed that in the 21st century the federal government would include a massively expensive Dept. of Education empowered to enforce its edicts by means of military SWAT teams, our founding fathers would certainly roll over in their graves. There can be no question about that.

Yet, this is the state of our nation now. Moreover, it is a glimpse of the future that this President seeks to create for our once free nation. What he can't accomplish in the Congress by means of public lies, he seeks to accomplish in the federal bureaucracy he directs and controls. If the Congress, or the States, or the people object, he will take us to court, paying for his efforts against us with money he has extorted from us in taxes or created out of thin air.

In light of all this one is hard-pressed to argue that the crisis in America now with regard to property, freedom and peace is different than the crisis suffered by Americans circa 1776.

 

A Reason For Despair

Now in the market economy this alleged dualism of two independent processes, that of production and that of distribution, does not exist. There is only one process going on. Goods are not first produced and then distributed. There is no such thing as an appropriation of portions out of a stock of ownerless goods. The products come into existence as somebody's property. If one wants to distribute them, one must first confiscate them. It is certainly very easy for the governnlental apparatus of compulsion and coercion to embark upon confiscation and expropriation. But this does not prove that a durable system of economic affairs can be built upon such confiscation and expropriation.

When the Vikings turned their backs upon a community of autarkic peasants whom they had plundered, the surviving victims began to work, to till the soil, and to build again. When the pirates returned after some years, they again found things to seize. But capitalism cannot stand such reiterated predatory raids. Its capital accumulation and investments are founded upon the expectation that no such expropriation will occur. If this expectation is absent, people will prefer to consume their capital instead of safeguarding it for the expropriators. This is the inherent error of all plans that aim at combining private ownership and reiterated expropriation.

The above quotation is from Ludwig von Mises, Human Action, page 800-801.

Throughout human history in virtually every human society well-intentioned social reformers have observed with disdain a dichotomy of wealth: on the one hand there are the rich; on the other there are the poor. This dichotomy has existed and does exist in all societies no matter how they are organized with respect to property, freedom and peace. The reason this dichotomy exists is obvious: human beings are different. Some are strong; others are weak. Some are ruthless; others are gentle. Some are talented; others are dull. Some are industrious; others are lazy. Society is a cooperative arrangement between and among individual human beings. The differences between individual human beings in society are not without consequence. These differences result in differences in status and wealth between and among individuals, no matter how society is economically organized.

Well-intentioned social reformers dispute this last sentence. They imagine a society in which human differences are levelled, not in fact but in effect. They take an imaginary inventory of all desirable social products and services without regard to their productive source and then divide this inventory by the number of individuals in that society. Their mental gymnastics result in an imaginary society without rich and poor, a society wherein all individuals are blessed with more or less the same portion of desirable goods and services. Imagining such a society is easy. Imagining how such a society could be implemented in the real world is the hard part. Mises put his finger on the reason why.

We cannot imagine a human society able to exist in the real world without taboos against random killing and taking. Society is cooperative action between individuals. Individuals cooperate to attain goals they cannot attain without cooperative action. How could a cooperative society exist if the goals attained by some individuals could be legitimately appropriated by other individuals by means of random killing and taking? Such a society could not exist, at least not for long. Rational individuals would not form such a society, nor would they long cooperate in such a society. However, human beings are clever and creative.

While no society can exist wherein random killing and taking are legitimate social actions, societies can and do exist in which specific acts of killing and taking are legitimate social actions. Cooperative individuals draw distinctions between certain acts of killing and taking based on social context. Most societies allow individuals to legitimately kill in self-defense. Most allow individuals to legitimately take in taxation. Thus, specific social acts of killling and taking which are not deemed legitimate in a particular society are regarded as taboo and are called murder and theft. Therefore, by variously and creatively defining the taboos of murder and theft, societies of cooperative individuals are able to exist in the real world wherein the goals of some individuals can be legitimately appropriated by other individuals by means of legitimatized killing and taking. Of course, the longevity of such a society still depends completely on the willingness of individuals to cooperate in such a society.

Social reformers who seek to create an egalitarian society by apportioning the total goods and services in that society more or less equally among all individuals in that society can only do so by legitimizing more and more social acts of killing and taking. This must be so because, as Mises points out, desirable goods and services are produced not by some disembodied force of nature, but by individuals. Now, all individuals in such a society may selflessly volunteer the products of their toil to the common store in full measure according to their ability. Moreover, all individuals in such a society may prudently take products from the common store in a measure congruent only to their needs. However, these individuals would be imaginary. They would not be individuals in the real world who may be selfish, greedy or ruthless. In order to implement their imaginary egalitarian society in the real world social reformers must control and suppress these undesired traits of certain human individuals. They do so by legitimizing social acts of suppression, i.e., specific acts of killing and taking performed on some by others.

That collectivist societies can exist is clear. Mises tells us why they cannot exist for long. Eventually and inexorably capital is consumed. As a result the total inventory of goods and services in the collectivist society diminishes. Consequently, the portion allocated to each individual diminishes and approaches nothing. The collectivist social reformers never understand that the cornucopia of riches they seek to divide and allocate among the masses exists only because of capital owned and employed by individuals. As the reformers socialize ends they simultaneously destroy the only means by which those ends can be attained.

In light of the above consider this latest Gallup Poll: Americans Divided on Taxing the Rich to Redistribute Wealth. According to the poll a representative number of Americans were asked: Do you think our government should or should not redistribute wealth by heavy taxes on the rich? 47% answered in the affirmative. Moreover, according to the attendent article, Gallup "polling last year found two-thirds of Americans in favor of the wealthy paying higher Social Security taxes as a way to help keep that system solvent."

With almost half of Americans putting themselves in the collectivist camp of social reformers, there is reason to despair for the future prosperity of our great nation. I wonder how many of these social reformers understand that the policies they advocate will inevitably and inexorably lead not only to their own impoverishment, but also to the destruction of the very engine that makes prosperity possible -- private property.

How many of these individuals will read and understand Mises' quotation above? How many will believe it?