South-Western College Publishing - Economics  
Is Legalization and Prevention Better Than Getting Tough With Drugs?
Topic Supply and Demand; Economic Analysis
Key Words Britain, drugs, law, rehabilitation, penalty, costs
Full Article

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Reference ID: A166826870
News Story Three years ago, the British government decided to downgrade the legal status of cannabis (marijuana) from a Class B to Class C drug, reflecting attitudes toward the drug. Now the government, in the midst of a “get tough on drugs” campaign, is considering reversing the move. Is it a good idea?

More adults in Britain smoke marijuana than in any other European country except Switzerland, and rivals other countries in consumption of cocaine, heroine and alcohol. While total consumption of all drugs has declined since 1998, most of that can be attributed to a decline in consumption of marijuana. Consumption of all other drugs has increased, however; this has happened in conjunction with past “get tough” criminal programs as well as a significant reduction in the price of cocaine.

It’s not clear, unfortunately, how many people are deterred by “get tough” programs, and how many users of one drug upgrade to another drug. And while it may be difficult to completely eliminate drug use through government programs, it may be possible to reduce some of the more dangerous social implications. For example, a program designed to allow heroin users to exchange needles and other equipment has resulted in a reduction in drug use-related deaths over the last five years. It is hoped that a program that targets youths who may be inclined to take risks to do so more safely will result in similar successes.

Unfortunately, reducing the number of deaths from taking drugs isn’t the same thing as reducing consumption. But those types of programs help eliminate the larger social cost, if not the individual costs. And that’s a good start, at least.

Questions
Discussion Questions:
1. Consider the program to exchange the dirty needles of heroin users for clean ones. What are the economic costs and benefits of implementing such a program?
2. Indicate with a graph of supply and demand the impact of a return to a “get tough” approach to illicit drugs.
3. What sorts of government programs will result in a reduction in demand for drugs like marijuana and cocaine?
Multiple Choice/True False Questions:
1. The article summary indicates that the price of cocaine has decreased over time. This would be best attributed to
  1. A decrease in demand.
  2. An increase in demand.
  3. A decrease in supply.
  4. An increase in supply.
2. Reducing the criminality of cannabis should, all else constant, have the effect of
  1. Increasing supply
  2. Decreasing supply
  3. Increasing demand
  4. Decreasing demand
3. Allowing heroin users to exchange dirty needles for clean ones is an example of reducing ________ costs.
  1. Fixed
  2. External
  3. Sunk
  4. Internal
Source “Prescription Renewal.” The Economist, July 26th, 2007.
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