Black Markets

One of most important advantages we talk about regarding legalization and regulation is getting rid of the violence, destruction, and corruption that is an inevitable part of the massive black market operation that is an inevitable by-product of prohibition.
Clearly our message is getting out there, because we’re now starting to hear push-back from prohibitionists (and prohibition apologists) on that very talking point. The usual response goes something like this:

“Some claim that legalization will eliminate black markets, but that’s false. There will always be black markets as long as drugs are taxed, regulated or controlled.”

And yes, they’re technically correct. The only way to completely eliminate any chance of a black market for a demand commodity is to have absolutely no taxes or regulation (economic freedom is an enemy to black markets). But their argument is specious and pathetic.
There’s all kinds of black markets. When a 22-year-old buys a six-pack for his 19-year-old brother, that’s a black market transaction. But it’s hardly comparable to Al Capone during liquor prohibition.
Say you live in South Carolina, where the tax on cigarettes is $.07 per pack and you’re visiting a friend in New Jersey, where it’s $2.57 per pack. Your friend may ask you to bring a couple of cartons with you when you visit and he’ll reimburse you. Despite the massive differential in taxation, it’s unlikely that the thought of the potential profit is enough to make you kill your neighbors and put their heads on pikes as a warning to other South Carolinians not to mess with your cigarette smuggling business.
So, yes, there will be black markets, but the prohibitionist argument is as stupid as saying “Sure, this treatment will cure your cancer, but you’ll still have a runny nose, so we probably shouldn’t do it.”
The fact that there will still be minor black market transactions in regulated legalization can be instructive — it will help us be cautious about setting taxes too high, or regulations too stiff, in order to limit the “sniffles.” But the most important thing is legalization, to cut out the worst of the black market — the cancer that is destroying us.

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