Heroin: Right On, Pigs

The Knapp Commission, has alleged that some New York City Police (through the acceptance of bribes) are allowing the illegal sale of heroin. Although there may be disagreement concerning the actual guilt of those involved, the non-dope pushing public is unanimously united behind the proposition that such acts are a “bad thing.” This includes people as different as the conservative Police Benevolent Association and the New York City Police Department, as well as the liberal Lindsay Administration and the American Civil Liberties Union. Where else can be found such heart warming agreement among such usually virulent enemies?

Much as it pains me to take a different point of view, I think that New York’s finest have for once done the people of the city a good turn (if the allegations turn out to be true). In order to see why this is so, and in order to demonstrate the great glory and relevence of my guild, we must consider several axioms of economic theory.

1. The price of an item is dependent on supply and demand. Others thing
   equal, the supply of a good will be lessened, and its price will rise, if it is declared illegal, and if this declaration is enforced. The possibility of encountering great losses and a jail sentence if caught is usually enough to deter honest businessmen from producing the product. This leaves the field open for “businessmen” like the Mafia who specialize in high risk “business.”
2. What will be the effects of the rise in price of the item, in this case
   heroin? The economics of the market and sale of heroin are as follows. It costs roughly $100 per day to support a mature habit (the price varies according to quality and number of alternative sources of supply). This is roughly $36,500 per year. There are virtually no addicts who can support their habits through honest work or property income. They are thus forced into a life of crime (and/or prostitution). Most of this crime is in the form of stolen goods. The economics of fencing (cashing in, for the uninitiated) is one that usually obtains about 20% of the market value of the stolen goods. This means that the addict has to steal almost $200,000 worth per year.
3. The plight of the addict in being forced to come up with this $200,000 is due entirely to the fact that heroin is illegal, and that this law is enforced. If heroin were not illegal, and/or if this prohibition were not enforced, its price would fall to something like the price of tobacco. For both heroin and tobacco are plants, subject to the principles of agricultural economics.
4. The bad effects of forcing addicts to cough up $200,000 are a) A vast increase in crime (multiply $200,000 times 10,000, the estimated number of addicts in New York City alone) and b) A vast immerseration of the life of an addict, turning him into a crazed, desperate person, capable of all sorts of evils, instead of a person who would be no burden to society, able to earn what two packs of cigarettes per day now cost.
5. If heroin were legalized, or turned into a dead letter law by massive police refusal to enforce the law (i.e., by allowing its sale, perhaps through bribes) these bad effects would vanish. And to the extent that police “look the other way” these bad effects would be lessened. For if the New York City Police Department has any Legitimate function at all, it is surely to prevent crime. We have seen that a great contributor to crime is the desperation addicts are forced into by being forced to scrape together $200,000 per year; that the cause of this is the high price of heroin; which is in turn caused by its very prohibition. Get rid of the prohibition and its enforcement, and the problem is solved.
6. Will heroin use increase if legalized? This is hard to say, but on the balance, I think not. On the one hand, economic law of downward sloping demand indicates that as the price falls more of a commodity will be demanded. Also, legalization may remove the barriers to heroin use on the part of those who are law abiding and/or fear punishment. But on the other hand, the demand for heroin is usually supposed to be what economists call inelastic, i.e., not responsive to price changes. To the degree that this is so, a fall in the price of heroin will not increase its use much. In addition, legalization makes it unprofitable to push heroin (the third way of supporting a habit). Neither the Mafia nor other users of the chocolate bean try to “push” the stuff on anyone else.

People will no doubt object that heroin addiction is a terrible thing. I agree. But enforcing the prohibition of heroin is more horrible still in that a) It may well increase heroin addiction, b) It will certainly increase the rate of crime, thus c) endangering the lives of us all, addict and crime victim alike. Although economics as a social science can have nothing to say on this question, it is my belief as a libertarian that each of us has a right to “go to hell in his own way” provided that he does not violate the rights of others.

Walter Block is a professor of economics at Baruch College, C.C.N.Y.