Economics 101

The Economics Behind the US Government’s Unwinnable War on Drugs

Benjamin Powell, in this essential article, has explained the basics of economics and the drug war in plain English. This is a great piece to share with people.

One of the biggest problems with those who support supply-side drug policy is a basic lack of understanding of simple economics. Once you understand the trade-offs that are a necessary result of the laws of economics, then it’s impossible to support the drug war if your goal is really to do what’s best for society.

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16 Responses to Economics 101

  1. thelbert says:

    so, a simple plant is more powerful and smarter than all the prohibition agents and leos in amerika. a simple plant can get people defend it with their lives. if the fools running this lash up don’t get smart, a simple plant will bring down the country.

    • Duncan20903 says:


      It appears to me that people just can’t help anthropomorphizing inanimate objects. The people who advocate gun control do it with guns. The people who want campaign finance reform do it with money. Why in the world would anyone be surprised that the prohibitionist parasites and their sycophants do it with (some) drugs? Hasn’t anyone else posted in another comments column specifically about cannabis only to see a prohibitionist covert it to “drugs” in their response? If not you’ve had limited exposure to these discussions because it doesn’t take much at all to prod one of the Ignorati into doing that.

  2. claygooding says:

    We know hemp is a wonder plant,,the people that had it banned knew it was a wonder plant,,now America is learning it is a wonder plant. Cannabis is so much medicine man cannot copy it,,cannabis is so strong no other natural fiber is longer or stronger,,cannabis is so versatile it will grow anywhere there is soil and appx 4 months of “summer”(Ruderalis)sp and cannabis is just too strong for man to control,that is why prohibiting was doomed before the rich bastards attacked it.

  3. DonDig says:

    Brilliant analysis Pete, thank you for finding this.
    Never seen it explained so elegantly before, but it makes perfect sense: the harder the (supply–side) wod is fought, the more profitable the situation for the black market. The cartels will never run out of funds, and Washington can never win. The stakes can escalate in perpetuity, with the various subcontractors applauding.
    Capitalism at its best. Perfect!
    This makes the meaning behind Hilary’s comment all the clearer now. ‘It’ll never be legalized, there’s too much money in it!’

    (where’s my sarcasm font?)

  4. Rick Steeb says:

    Fewer and fewer people are buying the idiotic concept of eliminating the supply of anything by raising its value.

  5. Duncan20903 says:


    The phenomenon is called “The Invisible Hand” in economic circles. It’s peculiar that the prohibasites don’t recognize it because all the rest of their evidence is invisible too. E.g. there’s a large cohort of people who are sober because of the law. We can’t see them because even those people affected don’t know that they’ve been saved. Likewise there’s a lot of people who aren’t driving while impaired because of the law. Lots of people who aren’t schizophrenic, lots of people who are productive taxpayers, etc, etc, etc.

    It is very difficult to disprove the invisible that doesn’t exist.

  6. Servetus says:

    OT. Regarding hactivist Edward Snowden’s disclosures on American spying, Digby asks, “What if the people running our secret programs are idiots ?”

    In fact, as Mr. Snowden’s documents have shown, the omnivorous agency’s operations range far beyond terrorism….

    Only the dumbest and least likely to succeed of terrorists were Skyping their attack planning….

    …But, it’s increasingly clear that we’re using this capability for the boondoggle also known as the drug war, which means this information must be being shared with the DEA and the FBI. (Everybody on board with that?)

    • nonpartisan says:


    • Goldwater Conservative says:

      Comrade, would you support a drug war if someone on YOUR side of the ideological fence advocated it? Here is my honest opinion: Edward Snowden should be shot.

      • War Vet says:

        Who in there right mind would support a drug war? Since Radical Islam profits off illegal drug money, the only people I know who support the Drug War are Jihad terrorists as seen in our prison camp in Baghdad. Everybody who supports the drug war is by default or by consequence a Muslim Terrorist or a Muslim Terrorist Sympathizer, just like 2 is the outcome or consequence of adding one and one together. But what Mr. Snowden did was the duty of every law abiding American, lest we apologize for our terrorist behaviors back in the 70’s and 80’s during the 18th Century. Drug money kills more troops than leaking secretes. My Baghdad prison I worked in held the mafia from Russia and Italy and the Asian Triad and Latin American and Nigerian smugglers while I was there, but you’ll never believe that because it’s inconceivable for the Mafia to be in Iraq . . . but then again, War Kilos cost less than peace time kilos and I heard a rumor that Iran (Golden Crescent nation) was next to Iraq and I herd a rumor that the Mafia were a part of organized crime.

        May I ask: What did Mr. Snowden do to deserve your desire of shooting him? I would shoot him with a raygun full of love, but giving him a hug would be cheaper. Would you shoot a U.S. WWII Veteran for doing the exact same thing as Mr. Snowden? All he did was obey the law by leaking secretes about a domestic terrorist threat coming in the form of the illicit Federal Government (lest we shall say: All Hail Hitler). Who is worse: Mr. Snowden or the Federal Government who openly gives terrorist their money via the consequences of illegal laws that bring about the drug money that finances terrorists the most? American drug users buy mostly from Latin America and domestic growers, not from Muslim growers/manufactures/smugglers etc . . . European, African and Asian buyers were bamboozled by the U.S. backed and manipulated illegal 1961 U.N. Single Convention on Narcotics, which created a global drug black market. If a terrorist has no money and cannot harm you or anyone for that matter, is he then a terrorist? Besides, we have no proof Mr. Snowden did anything illegal or treasonous. Can an illicit government filled to the brim with treason and terrorism claim that someone else is a traitor, though that ‘notional’ traitor. George Washington was a terrorist traitor in the eyes of the Empire. Snowden is a Patriot . . . at least for this one act he did . . . I cannot comment on the other things he might have done.

        • War Vet says:

          Edit: Though that notional traitor was obeying the law in every sense of the word.

        • War Vet says:

          Edit: Though that ‘notional’ traitor obeyed the law in every sense of it.

          Sadly Americans have been led to believe that ‘Patriotism’ looks different from what it really means. Just because one puts on a Uniform in War doesn’t make you a patriot depending on the war . . . what you do afterwards is what may give one that right to be called a patriot.

          Sorry Mr. Goldwater Conservative, it’s the 4th of July and I’ve still got friends getting killed because of drugs in places like Afghanistan . . . over a decade after the fact. At least what Mr. Snowden is doing means my friends aren’t fighting or dying in vain. I believe in the America that can be, not in the America that is and you’ll not find a truer more patriotic group of conservatives anywhere except for on this couch, we call Pete’s Couch. I’m not questioning what you did in Vietnam or Korea or wherever you went Mr. Goldwater, but fighting for freedom has a new meaning in today’s America . . . what give us the right to protect ourselves and others from terrorism when we promote domestic terrorism and domestic tyranny and treasonous acts with our taxes, laws and Law Enforcement officials.

  7. Servetus says:

    OT: The NY Times reports all parcel post letters and packages are being photographed by computers:

    …the Mail Isolation Control and Tracking program, in which Postal Service computers photograph the exterior of every piece of paper mail that is processed in the United States — about 160 billion pieces last year. It is not known how long the government saves the images.
    Together, the two programs show that snail mail is subject to the same kind of scrutiny that the National Security Agency has given to telephone calls and e-mail.

    First class mail still requires a warrant to open it, but with all those Stasi letter steamers sitting unused in Germany, things could change. The spy provisions for snail mail could have a chilling effect on dissent for those confronting government corruption.

  8. War Vet says:

    This is a fantastic piece Pete, but since it talks about violence and Mexico, I was shocked that it didn’t say anything about Afghanistan when tallying up the $51 billion America spends.

    Granted, we can have a ‘War on Drugs’ cost from spending on prohibition and a ‘War on Drugs’ cost from the consequences and residual effects of drug prohibition. I think the right use of words and figures will work better in our favor instead of limiting the facts, i.e. if America’s war on drugs influenced global drug prohibition as seen in the 1961 U.N. Single Convention, this would play a factor in organized crime on a global level.

    And if drug money is the reason why (let’s call him) John committed an action and America spent billions of dollars to counter or fix said action, would that not be associated in the price of the War on Drugs? I don’t know, maybe what’s going on in Mexico, like in Afghanistan (and from the Iranian Golden Cresent funded insurgencies/civil war/Al Qaeda/terrorism in Iraq) is not a part of the War on Drugs . . . I guess the increased costs from the increase of illegal immigration solely coming from Mexicans fleeing for their lives (refuges not here for jobs, though will need work), isn’t a part of the War on Drugs or the money it will cost to the Feds or the States. Other than that, this was one of the best I’ve read Pete.

    Sadly many Americans cannot or haven’t been given a chance to see the Macro effects of the War on Drugs, just the Micro and that will keep our efforts slower than it needs to be. And while we as a nation slowly gather partial data, many children die in the Congo from drug money funded militias (and percentages thereof) . . . how much does our U.S. aid and or U.S. citizen’s private or corporate/religious/relief organizations’ donations cost just from the drug money aspect of what happens in the Congo and elsewhere etc etc?

    • War Vet says:

      p.s. I’m not ignoring the costs of supply and demand of drugs and the market vs the black market etc . . . I’m more concerned for the supply and demand of bullets and armies comming from drug money or fighting drug money. Do not wars cost money too and is that an economic loss?

  9. War Vet says:

    We also didn’t add up the missed out costs of keeping hemp illegal for decades at a time because of the War on Drugs and the price of keeping hemp away from the U.S. Military during war as well. I’m a firm beleiver that the War on Drugs cost us $6-8 Trillion in money spent and money not made.

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