Prohibition versus legalization: do economists reach a conclusion on drug policy?

• Author: Thornton, Mark

The policy of prohibiting the sale and consumption of cocaine, heroin, and marijuana is of great public interest, with much debate about the effectiveness of the "war on drugs" and alternative policies such as legalization, decriminalization, drug treatment, and medical marijuana. Economists have been at the forefront of the debate, criticizing the effectiveness of the war on drugs, drawing attention to its "unintended consequences," such as violent crime and the corruption of police and public officials, and proposing alternative policies, such as drug legalization and decriminalization.

Milton Friedman (1972, 1980, 1984, 1989) has long advocated the legalization of drugs. Gary Becker (1987, 2001), George Shultz (1989), Thomas Sowell (1989), and William Niskanen (1992) have also endorsed liberalization. Both Milton Friedman and Gary Becker have been awarded the Nobel Prize in economics; in the Reagan administration, George Shultz served in the president's cabinet, and William Niskanen served as the chairman of the President's Council of Economic Advisors. Given that these noteworthy economists are associated with conservative politics, it might seem that a bipartisan consensus prevails on the direction of reform in drug policy.

Do these views represent the economics profession's views? Are they indicative of the views of economists who are actively engaged in research on drug policy? Or might they be a minority view? After all, the economists I have mentioned are strongly associated with the Chicago school of economics and a policy agenda of economic liberalism. Furthermore, only one of the endorsements, Gary Becker's, comes from an economist whose primary research is related to drug policy (via his study of addiction). Therefore, it is less than obvious that their views reflect those of the profession at large or of economists who research this issue.

In order to answer these questions, I conducted two surveys of economists' policy views: one of the profession as a whole and the other of economists who are actively engaged in drug-policy research (table 1). I then examined the results of both surveys in the context of the demographics of the profession and public-opinion polls on drug policy.

Economists Are People, Too

In 1995, I surveyed 117 randomly selected professional economists who belonged to the American Economic Association. The findings were initially reported in Thornton 1995, 73. Subjects were randomly selected from the 1993 biographical listing of members of the American Economics Association. I randomly selected one subject from alternating pages of the directory, contacted that person by phone, and interviewed him or her.

Of those who offered an opinion, 58 percent favored a change of public policy in the general direction of decriminalization. When asked to choose from among five policy options, only 16 percent of economists favored complete legalization. Among the economists who gave a response other than keeping the status quo, 71 percent favored either legalization or decriminalization. Less than 2 percent endorsed measures stronger than longer prison sentences and increased enforcement budgets. Thus, the survey shows that in 1995 a majority of economists, though not a strong consensus, favored changes in public policy in the direction of decriminalization.

Above-average support for decriminalization is prevalent among economists specializing in monetary theory, public finance, and labor economics. Business economists were the strongest supporters of prohibition. Among nonacademic economists, those working for private institutions were more likely to support decriminalization, whereas those working in the public sector were more likely to support the status quo or increased enforcement. Age and rank appear to be largely unrelated to policy preferences. The evidence also suggests that economists trained in the Chicago, public-choice, and Austrian traditions are more likely to support legalization, so ideology or training may have a strong influence on policy views.

A 1991 opinion poll of Americans showed that 36 percent favored legalization or controlled distribution of most drugs (Thornton 1991b). The poll, sponsored by the pro-liberalization Drug Policy Foundation, also found that 40 percent believed that decriminalization of cocaine would reduce violent crime and that most, by a three to one margin, preferred addiction treatment and counseling for drug users over fines or imprisonment.

These findings contrast with a survey of college freshmen in 1988, which found that 19.3 percent favored the legalization of marijuana. A survey of the high school class of 1987 found that 15.4 percent favored legalization, 24.6 favored decriminalization, and 45.3 percent believed marijuana should remain illegal. Approximately 80 percent favored the prohibition of LSD and heroin. Surveys show a precipitous decline in support for legalization of marijuana to 16 percent from 1977 to 1989. Afterward, however, support began to increase among high school students after 1989 and had doubled to 32 percent in 2000 (36.5 percent of college freshmen in 2001), with nearly 50 percent supporting marijuana decriminalization and 73 percent supporting medical marijuana. Moreover, majorities favor treating drug use as a disease and believe that too many people are put in jail for drug use (Maguire and Pastore 2001).

An examination of responses relative to demographic characteristics of the general population is revealing (see table 2). Prohibitionists are more likely to be female, older, from the South, blue collar, low income, Protestant, high school dropouts, and Democrat. Supporters of legalization in the general population are more likely to be male, younger, from the North and West, professional, highest income category, Jewish or nonreligious, college graduate or more advanced in education, and independent in politics. In recent years, these demographic distinctions have become less dramatic than they were ten or fifteen years ago.

Given that the members of the economics profession tend to match more closely the characteristics of the reformers in the general population, it is unclear that being an economist per se has much impact on the choice between prohibition and legalization, especially in view of the survey's wide confidence interval (plus or minus 9 percent). Brian Caplan (2001) has found that being male and well educated and having rising income is associated with the tendency to think like an economist and in general to favor liberal economic policies.

Economists Gordon Tullock and Richard B. McKenzie have suggested that economists have always opposed prohibition:

In the early part of this century, many well-intentioned Americans objected to the consumption of alcoholic beverages. They succeeded in getting the Constitution amended to prohibit the sale of alcohol. By the 1930s most of them had given up because they discovered how difficult it was to enforce the law. If they had consulted economists, I'm sure they would have been told that the law would be very difficult and expensive to enforce. With this advice they might have decided not to undertake the program of moral elevation. The same considerations should, of course, be taken into account now with respect to other drugs. (1985, 7) However, one of the leading economists of the early twentieth century, Irving Fisher, was an outspoken proponent of alcohol prohibition and wrote three books in support of the policy. As late as 1927, Fisher claimed that he could not find a single economist to speak against prohibition at a meeting of the American Economic Association (Thornton 1991a). At the end of the 1920s, Fisher remained solidly in support of strict alcohol prohibition: "Summing up, it may be said that Prohibition has already accomplished incalculable good, hygienically, economically and socially. Real personal liberty, the liberty to give and enjoy the full use of our faculties, is increased by Prohibition. All that the wets can possibly accomplish is laxity of enforcement or nullification; in other words, enormously to increase the very disrespect for law which they profess to deplore. Hence the only satisfactory solution lies in fuller enforcement of the existing law" (1930, 454-55). Clearly, economists did not always support liberal drug policies. They have come a long way, however, since the 1920s.

Vital Economists on Drug Policy

I define vital economists as those who write directly for publication on a particular policy, embrace policy-reform positions that are more than vague generalities, and...