It is an old belief among conspiracy theorists that the push to make marijuana illegal was a tactical move by Dow Chemical to take hemp off the market allowing them to sell more nylon and other synthetic fibers. Of course this is absurd. There was public worry about marijuana long before nylon was synthesized, as well as some local legislation against marijuana and opiates, not to mention alcohol prohibition. The drug war being simply a variation on the temperance movement, we do not need a conspiracy to explain it.
However, that does not mean that companies will not take advantage of the law when it works to their benefit.
One recent example is the legislation against flavored cigarettes, excluding menthol. The argument, of course, is that it is for the children, but that is the explanation for almost everything in recent times. But it is likely true. Most of the supporters are probably legislators who really believe that mint or citrus flavored tobacco will make children smoke. So, why exclude menthol? Well, because one of the few supporters from the tobacco industry is Phillip Morris, who sell no flavored tobacco products, but make a lot of money from menthol cigarettes. Of course, their competition is doing well selling currently legal flavored tobaccos. Which may explain why they are welcoming more regulation of their industry.
Another area where existing industries benefit from regulation is the pharmaceutical industry. I have mentioned this before in passing, but there are many examples. For instance, under a free market if a doctor prescribed a medicine by name, you could choose to take a generic or not. However, under our extremely regulated market, a doctor can force you to buy only the brand name, which is beneficial to the company owning that name. Likewise, the regulation serves to insulate these companies from competitors, as even the generic market is handled by only a handful of labs. The incredible amount of regulation simply makes the barriers to entry excessively high. Even with the elevated profits from effective cartelization, the entry barriers keep the cartel closed.
And that is the truth of regulation. While many libertarians will tell you industry suffers from regulation, that is not entirely true. Many businesses suffer from regulation, but not all. Existing companies can often benefit from regulation, either by giving them an advantage over competitors or by keeping out competitors entirely. So, while the economy as a whole is harmed by regulation, it does not always harm individual companies.
So, how does this relate to my topic? Why isn't this over on Random Notes with the rest of the general economic and political essays?
Well, because I think that ending pharmaceutical regulation is just as important as decriminalizing illicit drugs. While most "dug legalization sites" focus purely on allowing people to use marijuana and cocaine, I think that those freedoms are meaningless if we keep the current prescription laws. What sense does it make to allow citizens to buy cocaine if they need a doctor's approval to get antibiotics? Not only does it make no sense to have heroin sold on the street while morphine sulfate is kept under lock and key, but it also sets up a precedent which has the potential to restore drug prohibition.
Let us imagine that all of the prohibitions on marijuana, cocaine, amphetamines, heroin, and so on have been removed, yet we still have our prescription laws in place. Is it not likely that someone, seeing all the ahrm done by drugs, will propose that perhaps we should make recreational drugs prescription? There is even an already existing argument. Birth control pills are by prescription because, among other reasons, it is a way to get women to see their gynecologist. And while I think this is more of a make work than public health measure, obviously others do not. So with that nominally benevolent example, is it not a good idea to have drug users see their doctor every so often? After all they have lots of health problems, so what is the argument against making drugs prescription?
And so, once again, drugs are under lock and key once more. Admittedly, the control is handed to doctors rather than judges, but that fits with our modern health-oriented nanny state. And who really cares? If my tyrant is a doctor or a politician, it matters little to me. What does matter is that someone else has legal control over something that should be my decision alone.
So, if there is to be decriminalization, I would argue that the prescription system is clearly part of the system that needs to be eliminated. Without that reform, any other changes will be simply meaningless.
Originally Posted in Examining the War on Drugs on 2008/06/19.