by Lester GRINSPOON and James B. Bakalar

U.S.A. - Professor of Psychiatry at Harvard Medical School in Boston and a member of the Examining Commission of the American Board of Psychiatry and Neurology. He is a member of the Advisory Council of the Drug Policy Foundation and took part in the Legal Commission of the U.S. Senate in 1988. He is presently legal consultant for the States of New Jersey, Colorado, Washington, New York, Vermont and Massachusetts.

ABSTRACT: The authors propose a legalisation and taxation policy regarding drugs as an alternative to the present system of prohibition. Taxes would meet a twofold objective: first, they would have a dampening effect on potential use and secondly, they would finance drug education programs as well as subsidised costs of public safety linked to abuse.

("THE COST OF PROHIBITION ON DRUGS", Papers of the International

Anti-prohibitionism Forum, Brussels 28th september - 1st october 1988; Ed. Radical Party)

In the era of the Volstead Act, H. L. Mencken said of the alcohol problem that, between the distillers and saloon-keepers on one side and the Prohibitionists on the other, no intelligent person thought there was any solution at all. The same may be true of the illicit drug problem today, with its traffickers and users on one side and its moralists and police on the other. Only the problem is perhaps more serious because the acceptable range of solutions is so narrow. The report of the President's Commission on Organised Crime and recent political developments in this election year in the United States suggests how things are going right now. There is very little effective opposition to prohibition.

The American war on drugs began with the Harrison Narcotics Act in 1914, and has escalated over the last twenty years. Federal, state, and local governments now spend an estimated eight to nine billion dollars a year on direct drug enforcement activities and millions more to house and feed the drug dealers and users who now comprise one-third of federal prisoners and contribute substantially to the need to build more prisons.

Drugs enter the United States at a growing rate, despite the war effort, although that effort does inflate prices and keep the drug dealers' franchises lucrative. Another consequence is drug-related crime and violence, a product of the black market in drugs now as it was a product of the black market in alcohol in the 1920s. The threat to civil liberties grows as the warriors, already by necessity using entrapment and informers, now contemplate bringing in the military and random drug testing.

I would like to make a utopian proposal for an entirely different approach. Let currently controlled substances be legalised and taxed. The taxes would be used for drug education and for paying the medical and social costs of drug abuse. A commission would be established to decide these costs separately for each drug, and the rate of taxation would be adjusted periodically to reflect these data. Thus, the government would acknowledge the impossibility of eliminating all drug use and use its taxing power and educational authority to encourage safer drug use. The drugs that are now legal - alcohol and tobacco - would not be distinguished from the others.

The program might be instituted in phases, so that we could adjust and learn more before committing ourselves fully. Phase one might involve alcohol, tobacco, and cannabis. Alcohol and tobacco because they are already legal; cannabis because it is probably the least dangerous drug used for pleasure. They could all be sold through specially licensed outlets at prices determined by the commission. Advertising would be banned. Present prices might be maintained at the start. Then, as the commission collected more information, pricing could change to reflect social costs. If this system works as hoped, data would eventually show up that these drugs are causing less and less harm. At that point, we could consider bringing other drugs into the system.

The advantage is that we would no longer have the expense, corruption, chaos, and terror of the war between drug traffickers and narcotics agents. One of the by-products of Drug Wars is, as most of the participants in this meeting will recognise, a threat to civil liberties. Where the current line of thinking is leading is suggested by the proposal of the Organised Crime Commission for random urine testing of federal employees and employees of companies contracting with the federal government.

A self-reinforcing cycle may develop, as drug enforcement operations begin to pay for themselves by funds confiscated from the drug traffickers whose operations they make enormously profitable. The utopian taxing system suggested here would establish a different kind of revenue cycle, in which society would pay for the costs of drug abuse by extracting them from the drug users in proportion to the amount they contribute to the problem.

The commission that supervised this taxing system would also serve as an educator and guide to society - an educator not constrained by the present totally unrealistic assumption, built into the criminal law, that any use of certain drugs must be evil or dangerous, while other drugs have a range of benign and harmful uses. Honest drug education would become possible.

Is it plausible to think that this arrangement would work? Would it be possible to tax drugs enough to pay for their costs? Even if it were possible, would drug abuse increase so much that we would be paying too high a price in personal and social misery? Is the elasticity of demand great enough so that taxing would substantially influence the amount of drugs consumed, especially by heavy users? Evidence on all this is very uncertain, even in the cases of alcohol and tobacco, where most research has been done.

There is a large literature on the distribution curve of alcohol consumption among individuals in society, most of which concludes that any policy designed to cut total consumption will at least proportionately reduce alcohol use among problem drinkers and therefore the medical and social costs of alcohol abuse. That is, the demand is elastic enough, even among alcohol users who create problems by their use, to be affected by a rise in price.

In fact, there is some evidence that in countries where the price of alcohol is relatively higher, there are fewer alcohol problems, and the same is true for states within the United States. There is also some evidence of elasticity of demand for heroin addicts. Several studies suggest that addicts adjust the size of their habits to the price of heroin. One authority on heroin control has said that the criminal law would be effective in cutting down heroin use if it raised the time needed to get a dose of heroin from five minutes to two hours. This is the "crime tariff". The criminal law makes it risky to manufacture and distribute the drug. This raises its cost to the consumer, who therefore needs more time to earn or steal enough money to obtain it, and restricts accessibility, so that the consumer has to spend more time finding out where to get it. The question is whether through taxation we could impose a limitation similar to the crime tariff, but more efficiently and with fewer monstrous side-effects

.

Inelasticity of demand is greatest in the case of tobacco, because nicotine is one of the most highly addicting substances. Nevertheless, it is clear that even here raising the price by taxes has considerable effect on consumption. Research suggests that, for every ten percent increase in cigarette prices, consumption will decrease about four percent. Some studies suggest that the price affects mainly the decision to start smoking regularly rather than the quantity smoked by an already addicted smoker. Thus, the short-run impact of extra taxation would be small, and it would reduce cigarette smoking only in the long run. Other studies find that as the average cost of tobacco is raised, the income elasticity of demand increases; that is, poorer people are more deterred from cigarette consumption than richer ones.

It has been estimated that the direct health care costs plus the indirect losses in productivity and earnings due to cigarettes amount to a total of slightly over two dollars a pack - 22 billion dollars in health care for smoking related diseases and 43 billion dollars in productivity losses. This is only an illustration of the kind of calculation that would be involved in trying to set a taxing policy. Such a taxation policy might be regarded as a way of making people buy insurance for the risks to themselves and others in their use of drugs. Life insurance companies already offer substantial discounts in their premiums for non-smokers, and this insurance preference is slowly being extended to fire and other insurance policies.

A problem raised by any system of authorised sales is the black market. The tax would have to be set low enough so that a black market would not be profitable. It is possible to do this and still reduce demand for the drug considerably, as the case of alcohol seems to show. On the other hand, it is not clear whether any tax low enough to prevent a substantial black market would be high enough to pay for the social and medical costs of the drug use. Certainly, present taxes on alcohol are far from doing that. It might prove impossible to create a system that would make the abusers or a drug, or even its users, pay for the full costs of abuse. Maybe this problem is practically insoluble. Certainly, the criminal law approach offers no solution for it.

We simply don't know the amount of drug use and the seriousness of drug problems that would exist under this kind of system - whether a legal taxation system would have the same effect as the crime tariff or not in this respect. Even if drug use increased with legalisation, the Oregon and Alaska experiences with decriminalisation of marihuana suggest that the increase might not be nearly as much as anticipated. And, in order to undertake such a bold move, society would have to decide that the deprivation of freedom and the damage wrought by prohibition is greater than the damage attendant on an increment of drug use, much as it did in the decision to repeal the Volstead Act. One way to study the issue might be to examine the effect on gambling habits of the institution of state lotteries in competition with illegal numbers games.

There are already some models available for legalisation or quasi-legalisation. In Amsterdam, there is a kind of drug users and addicts union that advises officials. Heroin addicts get free methadone and marihuana users can buy their drug at openly tolerated cannabis cafes. Alaska allows you to grow marihuana for household use. And several other states have reduced the penalties for possession to fines similar to traffic tickets. Maine is one. A study there showed that a three hundred dollar law enforcement outlay was converted into twenty thousand dollars of profit on fines, with no increase in marihuana use.

Above all, any approach of this kind demands a recognition of complexity and ambiguity and a compromise between social reality and the utopian idea of a drug-free society. It even may require that we recognise that there are some benefits, as well as dangers, from the use of drugs and alcohol. But there is a great obstacle to even thinking about this as a serious alternative: no one in government wants to give up the symbolism of the criminal law or the commitment that has been made over the last 70 years, not only in the United States but all over the world, to treating drugs as a criminal problem. It is sometimes said that the pendulum of public attitudes swings back and forth between harshness and leniency in drug control. If there was some swing toward leniency in the early 70s, it now appears to be going the other way, as indicated by the report of the President's commission.

But there is a great deal of public ambivalence - or, to put it less kindly, hypocrisy - where this issue is concerned. The moral consensus about the evil of drugs is often passionate, but sometimes shallow. We pretend that eliminating the drug traffic is like eliminating slavery or piracy. Or, sometimes, as though it were like eradicating small pox or malaria. But would anyone suggest legalisation as a solution to the problem of piracy or suggest giving up the effort to eradicate infectious diseases? Drug control is not a settled issue in the same sense, despite the rhetoric. Or rather, the need for the rhetoric is a sign that it is not a settled issue. On the one hand, it is accepted in public discourse that everything possible has to be done to prevent everyone from ever using any of the controlled substances. On the other hand, there is an informal lore of drug use which is more tolerant. At one time it looked as though the forms of public discourse and this private language were coming closer togethe

r. Now they seem to be drifting apart again. A type of pretence that we have long abandoned in the case of alcohol is still considered the only respectable position where other drugs are concerned. Would a policy of legalisation and taxation change these ambivalent (or hypocritical) attitudes? Ambivalence (to put it kindly) or hypocrisy (to put it unkindly) have always been undercurrents in public attitudes as the criminal control system has seemingly permanently established itself. And that undercurrent is what leaves room for the possibility of change.