Question

In an interview in Spiegel Online, economist Jeffrey Miron says, “If it legalized drugs, the United States could save $85 billion to $90 billion per year. Roughly half that is spent on the current drugs policy and half that is lost in taxes that the state could have levied on legal drugs.” Exact dollar figures aside, comment critically on this statement from the point of view of the principles of benefit cost analysis that we have discussed.

A. Explain why or why not.

B. Would the earned tax revenue be a benefit of decriminalization and legalization? Explain why or why not.

C. Oh, and should we count the profits of legitimate marijuana sellers as a benefit, or would they just be displacing the profits of illegal marijuana sellers?

Answer 1

With legalization of drugs, there is a disclosure of the details of the traders in involved in drugs trade and people associated with the drug trade will be saved from going with the anti-social or criminal agents. Further, the individuals getting addicted can be saved from the exploitation done by the drug peddlers and proper treatment with rehabilitation will be given to them on time. Further, people will also get the benefits due to the medicated use of drugs such as Marijuana. Besides, there will be control upon the black market of drugs, illegal immigrants joining the illegal drug trade and other criminal activities. Not legalizing will cause the spread of black market of drugs, unemployed youths joining the illegal trade and smuggling as well as exploitation of drug addicts. So, besides monetary benefits, there are many other social benefits that are more important than the cost. Thus, benefits of legalizing the drug are higher than the cost being incurred.

A.
Legalization of drugs should take place as it helps the authorities to not only to regularize the trade, but save the youth from joining and getting exploited by the drug peddlers. It will also lower the crime rate and black marketing as well as illegal immigration will also be controlled.

B.
Earned tax revenue will be the benefit of the legalization because the trade related to the drugs, will take place as per the government guidelines and traders will pay the tax to the authorities. But, there are many more benefits such as decriminalization of the trade, actual assessment of the drug trade business and prevention of the exploitation of the youth among the others. It will develop a healthy society for the nation besides offering medicated benefits of the drugs.

C.
Yes, it should be treated as profit of the marijuana traders as all the traders will be enrolled as per the government guidelines. Earlier it was illegitimate, but now it will be legitimate income.