Our drug problem: Prohibition, ads, incarceration and revenue

We wrote recently here about the new American Prohibition Museum here in Savannah.

Alcohol prohibition had a long rise in the US, starting as far back as the 1820s. States began passing their own temperance laws in the 1840s. We still see remnants of some of these today. Beer laws are changing in Georgia to allow breweries to sell their own product; this follows a similar change in Alabama last year. Pennsylvania is figuring out how to privatize liquor distribution. In some states you can't buy alcohol Sundays, or at least Sunday mornings.

The constitutional amendment that prohibited alcohol in the US (the 18th amendment), was ratified in 1919, and reads thus:

Section 1. After one year from the ratification of this article the manufacture, sale, or transportation of intoxicating liquors within, the importation thereof into, or the exportation thereof from the United States and all territory subject to the jurisdiction thereof for beverage purposes is hereby prohibited.
 
Section 2. The Congress and the several States shall have concurrent power to enforce this article by appropriate legislation.
 
Section 3. This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by the legislatures of the several States, as provided in the Constitution, within seven years from the date of the submission hereof to the States by the Congress.

Fourteen years later, in 1933, the 21st amendment to the US constitution was ratified. It reads:

Section 1. The eighteenth article of amendment to the Constitution of the United States is hereby repealed.
 
Section 2. The transportation or importation into any State, Territory, or possession of the United States for delivery or use therein of intoxicating liquors, in violation of the laws thereof, is hereby prohibited.
 
Section 3. This article shall be inoperative unless it shall have been ratified as an amendment to the Constitution by conventions in the several States, as provided in the Constitution, within seven years from the date of the submission hereof to the States by the Congress.

If Section 2 of the 21st amendment sounds a lot like Section 1 of the 18th amendment, read it again closely. The 18th amendment prohibits the manufacture, sale, transport, import and export of alcohol. The 21st amendment prohibits the illegal transport, import, possession or use of alcohol.

In other words, we went from no booze to don't be stupid with booze.


During the years of alcohol prohibition, we saw the rise of Al Capone, who made sure Americans drank their fill. We saw the rise of Walgreens, which expanded from a couple of stores to hundreds filling prescriptions for medical whiskey. Bootleggers were the first at-home auto tinkerers, and prohibition gave rise to NASCAR.

The years of prohibition also cost the US $11 billion in taxes and $300 million in enforcement. Adjusting to today's rates, that's $207.1 billion in lost taxes and $5.6 billion in enforcement.

Today, alcohol sales are a $211.6 billion industry in the US. The federal government makes about $10 billion a year in taxes on that, and states and municipalities take in around $5.5 billion.

Extrapolated over 13 years and assuming no change, that's about $201.5 billion, pretty close to what we calculated for the prohibition years.


The CDC estimates there are about 88,000 alcohol-related deaths per year. Add to that 480,000 smoking-related deaths each year and 33,000 heroin- and opioid-related deaths.

Cocaine overdose deaths are now under 10,000 a year.

Deaths related to LSD appear to be too low to measure.

The best (read: no political agenda) stats I've found on marijuana-related deaths show that traffic deaths in which one driver had marijuana in his or her system increased in Colorado after legalization. The numbers are somewhat tempered in this case by multi-drug use, meaning that if the driver had used marijuana and alcohol, or marijuana and some other drug, it was still classified as a marijuana-related death (and also an alcohol-related, other drug-related, death).


Colorado saw $1 billion in legal marijuana sales in 2016 and took in $141 million in taxes during fiscal year 2015-2016, a 60-percent increase over the previous year. That will likely be up another 50 percent when we get the final numbers for 2016-2017 in a few weeks. Near as I can tell (the data are presented differently), Colorado is pulling in $5 million a month or so in alcohol-related taxes, or about 45 percent of what te state brings in from taxing marijuana.

Washington state is also selling about $1 billion a year in marijuana sales, and is pulling around $7 million a month in state and local taxes, which extrapolates to around $85 million a year. Washington gets about three times that in alcohol-related taxes.

Colorado has slightly under the average population for a US state; Washington is slightly higher, according to 2013 Census estimates.


Alcohol and marijuana prohibition are probably the most parallel examples we have — both were at one time illegal and they brought about big business thanks to some combination of illegal trading and legal prescriptions.

Cocaine is rarely (if ever) still prescribed, though it used to be. Most of the opioid overdose deaths we see start with prescriptions.

There's good evidence that SSRIs — often prescribed to fight depression — lead to higher rates of suicide. From strictly a social science standpoint, it's impossible to tell if people on SSRIs who commit suicide would not have committed suicide if they weren't taking them. You don't get a do-over with suicide, and you can't ask reflective questions of someone who has committed suicide.

The National Institutes for Health have a deep-dive on the pros and cons of direct-to-consumer advertising of prescription drugs, but one stats-gathering organization says that for every dollar spent on advertising, we see an increase of $4.20 in sales of prescription drugs, so the advertising is getting better than a four-to-one return right now.


You probably, by now, have figured out where this is going, but I'm going to take it farther than you think.

First, I should disclose my drug practices. I am an occasional (two to three times per week) alcohol user; I will smoke several cigars a year (tobacco); and I have used marijuana recreationally fewer than three times in my life. I have not tried any of the other drugs mentioned here.

All drugs should be legal, taxed and regulated. You've read 1,000 words at this point; don't bail on me just yet.

I think alcohol serves as the best precedent we have to work from as a model. We have:

• An agency that controls the quality of the ingredients
• A uniform way to measure how much alcohol we get (ABV, paired with volume)
• A measure describing legal impairment
• A minimum age for purchase and consumption
• Rules on who can make, distribute and sell alcohol

Those are the basics. We need them for every drug, and legalizing everything allows us to write a catch-all for synthetics that haven't been invented.


It would, of course, take some research. We've learned that the brain finishes maturing around age 25. We should, then, wait until someone is 25 or 26 before we let them buy and use psychedelics.

If there's not a good way to measure levels of consumption (we use blood-alcohol content for alcohol, with a level of 0.8 percent meaning impairment, as far as driving is concerned), then there's a zero-tolerance policy. You can use the drug in your own home or whatever, but if you operate a vehicle or commit a crime such as theft or assault and have any of the drug active in your system, the penalties are higher because you're impaired.

If a drug is so dangerous it shouldn't be used, use fines and/or property forfeiture as the penalty. Some 46 percent of inmates in the US are in prison on drug offenses; many of them have also committed other jailable offenses, so it wouldn't decrease our prison population by half, but it would get 15 million or so people producing in the economy instead of costing governments money by sitting in prison.

[I got that 15 million number by taking Five Thirty-Eight's numbers that a quarter of the US population is in prison and 16 percent of those prisoners have drug offenses as the primary reason they're incarcerated.]

Even if a drug is so dangerous it shouldn't be used, you should probably be able to use it in your living room if you're just going to take the drug and leave everyone alone until it's out of your system.


The average prisoner in the US costs taxpayers nearly $32,000 a year, with places like New York skewing it a little high ($60,000 per prisoner across the state and over $167,000 per perisoner in New York City).

I'm having trouble finding good numbers for welfare programs (there are over 130 of them, with 72 of them assisting individuals), but I know from my days in retail banking that supplemental income (SSI) requires you to either work 30 hours per week or be permanently disabled. SNAP benefits (food stamps) are said to help 4.8 million people a year — and nothing on the order of what it costs to feed and house a prisoner.

We're starting to wander a little far afield here, but the point there is that even if every single person in prison on drug offenses alone was to be released and put onto SNAP rolls instead of contributing to the US economy via jobs, it would still cost less than keeping them in prison for nonviolent offenses.


In case you missed it in all the reading above we're not only talking about spending less money on people in prison (and also in not having to pay people to enforce drug laws including expensive long-term investigations and undercover stings), we're talking about more income from because all those newly legal drugs are regulated and taxed. Shops pay money to get licensed the way bars and liquor stores pay for licenses. If you have a product to distribute, it needs agency (something like the FDA, if not the actual FDA) approval. And then there are taxes on both the property from which the drugs are sold (new businesses, yay!) and on the drugs themselves — and that tax, like the taxes on alcohol and tobacco, can be higher than sales tax.

I think that about covers it. Your thoughts?

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