Institutionalized Hysteria

It’s nice to note when political luminaries reach the same conclusion that I had reached some years ago: that the US policy on illicit drugs has been a failure. The Wall Street Journal on February 12 reported that a commission headed by former President of Brazil (Hernando Henrique Cardoso), of Colombia (C�sar Gaviria) and of Mexico (Ernesto Zedillo) concluded that the US –led drug war was a failure, one that is pushing Latin American societies to the breaking point. The turmoil now affecting Mexico, a development that discourages Americans from visiting that country or even crossing the border, with its headlines detailing violent gun battles, assassinations and kidnappings as the narcotraficantes battle police and army, is possibly the clearest example for Americans of the impact of this war on neighboring societies. Details of the struggle also make clear the degree to which the narcotics traffic has corrupted government institutions. As Mary Anastasia O’Grady, the Journal’s correspondent for Latin America, points out frequently, the corruption and social ills resulting from the war on drugs has badly affected many Latin American societies, not just Mexico’s but those of Colombia, Peru, Bolivia, and the Central American and Caribbean republics.

The tragedy of this effort is that it has failed in its stated objective to eliminate or at least sharply reduce the consumption of illicit drugs within the United States. A recent Brookings Institution study found that despite interdiction and eradication efforts, governments around the world have failed to decrease appreciably the supply of such drugs nor have punitive measures succeeded in lowering drug use. Washington Post columnist Edward Schumacher-Matos in an article that appeared on February 21 alleges that the present US street price for cocaine is only one-fourth of what it was in 1981. Confronted with this evident failure, a failure that has been clearly visible for many years, one searches for reasons that governments, especially that of the US, remain in denial.

My choice for the prime reason is social, a form of institutionalized hysteria, an hysteria so firmly entrenched that few dare to challenge the political viewpoint that we need not only to continue the “war” but to expand the effort. The popular viewpoint from my experience seems to flow from a belief that a single puff of marijuana leads to experimentation with cocaine and then to heroin addiction. This viewpoint was deliberately promulgated in the late 1930’s by people actively campaigning to organize an official counter-narcotics program. That it is believed shouldn’t be surprising: a substantial number of Americans also reject the theory of evolution.

Drug addiction is a serious social problem in many societies but this official viewpoint of the inevitability of addiction is simplistic and its consequences very damaging. But with an entrenched bureaucracy, the Drug Enforcement Agency (DEA), spending several billions of dollars concentrated on punitive efforts, changing official policy is not easy. An example is the assertion of John Walters, former director of the White House Office of National Drug Control Policy that:” It is not true that we’ve lost or can’t do anything about the drug problem”. His example was improved security in Colombia, but without mentioning the more than five billion dollars provided that country in mostly military assistance in its war against drug-financed guerrilla groups. As to Mexico he asserts that it is success in the drug war that has driven desperate traffickers to violence, assuming that they’re fighting over dwindling areas of influence.

Demand, not supply, drives illicit drug use. The US has focused, unsuccessfully as has been evident for some time, mostly on the supply side of the equation. Demand for substances that alter human behavior has existed since the emergence of modern man, some 60,000 years ago. Early on the results of fermenting fruit and grain became noted and used. Some millennia back came the production of mead, beer and wine. A safe statement is that ethyl alcohol is the most costly “drug” now in use in America. Prohibition was logically correct, but failed utterly as society refused to give up a drug to which it had adapted over the centuries.

Probably the second most damaging drug, albeit in declining use, is nicotine. Nicotine is the addictive element of its carrier, tobacco, the mainstay of America’s colonial economy, a crop on which the nation was largely built. A third, caffeine, as found in coffee, has gone from European 18^th century coffee shops to today’s billion dollar coffee shop chains. Millions of dollars are spent by consumers on coffeemakers and exotic coffee beans. And that doesn’t even cover another caffeine carrier in wide use, especially by youth, cola drinks.

So why the “war”. Cannabis, opium poppies and coca plants are not typically grown inAmerica. Their use, however, has only come under attack in this country about 80 to 90 years ago. One factor I believe is ethnocentrism. The effects of these chemicals can be devastating, and they are often addictive. But, importantly, their source has traditionally been among “brown-skinned” foreigners, and thus “un-American”. The answer then to the problem has been interdiction. Stop the trade!

Driven by American consumer demand these drugs have continued to flow into the country. Proscription has only served to support sales prices that in turn have resulted in shifting billions of dollars from users to producers and traffickers. This flow of great, if illicit, wealth has brought immense social damage to producing countries.

Relatively few people who experiment with illicit drugs fall into addiction. But some do and the reason would appear to be in the makeup of the individual. Perhaps nature, that is a tendency towards addiction, is worsened by nurture, dysfunctional families or traumatic childhoods, but this doesn’t explain many cases of addiction. We don’t really know. We speak of “addictive personalities” to describe those who seem unable to avoid alcoholism or other forms of drug addiction. We also know that a vast majority of people can enjoy alcoholic beverages with few perverse effects. Some have been know to smoke marijuana or use cocaine with out falling into addition. So society’s problem is more with the few than with the many.

We know that social interactive groups like Alcoholics Anonymous have been able to alter addictive behavior, but not easily and not always permanently. Other individuals have been able to kick addition on their own, going “cold turkey”. Research suggests that drugs alter the chemistry of the brain and that some individuals are more susceptible than others. Perhaps a better understanding of brain function would permit the development of “addiction blockers”. But this is speculation.

The Drug Enforcement Agency appears mostly to be involved in interdiction of supply. One could speculate that if the US Government hadn’t created this agency, the drug trade would have created something similar inasmuch as it performs a useful function. The DEA doesn’t really cut off supply but it knocks off those in the trade who are either dumb or unlucky, restricting the supply and helping to maintain prices, which has to aid the more skilled traffickers. Particularly in Afro-American communities, well meaning and concerned groups, churches for examples, have worked hard to combat the pernicious effects of excessive drinking, crack cocaine and other evils. Given their failure despite best efforts to bring these plagues under control, one wonders why they persist in the illusion that the “cowboys” from the DEA or “Washington” in general will succeed where they have failed.

Surely the American public and its elected political leaders should have learned from the failure of Prohibition that government edicts do little to change behavior and that attempts to enforce such edicts against the will of substantial numbers of people are doomed to be costly failures. As to the cost, the Office of National Drug Control Policy estimates the present annual cost at $21 billion. Of this sum, $14 billion is spent on incarceration of offenders. As of 2007 there were 500,000 individuals incarcerated for drug offenses. The social and financial cost of keeping this many people in prison boggles the mind. And that ignores the billons spent ineffectually chasing traffickers.

Surely it is time to abandon hysteria, move away from denial and recognize reality. We not only haven’t been able to halt the flow of illicit drugs from abroad into the country, but we have also to cope with chemists who synthesize drugs such as “ecstasy” and amphetamines and who do not need to be outside the good old US of A.

A first step, as recommended by the Commission of former Presidents, is to decriminalize marihuana. Cannabis may not be good for you, but the potential damage appears modest and not commensurate with the costs of trying to eliminate it. A number of benefits would flow from this measure. One, it would free up a significant amount of enforcement effort, allowing law enforcement agencies to concentrate their limited resources on more serious problems. It should also serve to reduce the prison population a positive benefit for those affected as well as for society at large. It would also free the public arena of countless legal battles over “medical” uses of marijuana and the production of product for such use.

Make it legal, sold only through registered dealers and taxed in the fields and retail. Turn it into an income source for public uses rather than a drain on public resources. Once growing becomes legal, allowing us to get illicit growers out of our National Parks and sundry basements, the laws of economics should result in modest prices removing current incentives for farmers in Mexico’s Sierra Madre Occidental to grow hemp instead of corn. I’m sure there will be those who will want to circumvent the law, but they will be in violation of tax laws, and can be prosecuted as we once did Al Capone.

Once marijuana is legalized, the thrust of new policies with respect to illicit drugs should be to move resources away from interdiction, especially overseas, and to concentrate on the demand side. This could include enhanced enforcement actions against users, but more importantly, much more funding for treatment programs and serious research into addiction and its treatments. The US needs to find means of combating the ills of addictive drug use but without generating the billions of dollars now accruing to the drug producers and traffickers. A rational approach of looking at drug addiction as a medical problem rather than merely criminal together with sharply focused and more limited enforcement would I submit contribute to this goal.

The Frog and the Scorpion

There is a fable about a frog and a scorpion. The scorpion wants to cross a stream but can't swim so it asks a frog for a ride. The frog is reluctant knowing that the scorpion's sting would kill it. The scorpion points out that if it were to sting the frog it would drown. So the frog begins to ferry the scorpion across the stream. The scorpion stings the frog and both die. You could say it was in the nature of the beast.

In the midst of probably our worst economic crisis since the 1930's, we confront the consequences of having bought far more from overseas than we sold. The perennial deficits have been financed, as they are even today, by foreigners, especially governments, in effect exchanging their goods for US Treasury bonds. The US Treasury now pays interest on several trillion dollars of these bonds of which the largest single holder is China with 868 billion dollars worth. Japan is second with 721 billion dollars. As a holder of this extraordinary amount of US obligations, China is in the driver's seat, as it were. Should it cease buying US debt or, worse, choose to hold its reserves in other currencies, e.g. euros, the dollar would undoubtedly suffer a sharp decline in value against other currencies, US imports would be priced above the purchasing power of many if not most Americans and our world standing would be truly eroded.

The saving grace is that while we're the frog and the Chinese the scorpion hopefully they have a a far better perception of self interest. To keep the lid on social ferment and to maintain the near monopoly of power of the Communist Party, China needs an economic growth rate of a minimum of 8% annually. Historically it has achieved even higher rates of growth through massive increases of exports, becoming the world's largest exporter in the process. A world wide recession is already threatening China's ability to manage its domestic economy and for it to throw its financial weight around carelessly could well prove a disaster for all. We are in a form of "mutually assured destruction" that perhaps constrains untoward behavior for all parties.

In the intermediate to longer term the American propensity to consume without much thought to savings and to run large foreign exchange deficits year after year is not sustainable. Economic theory suggests that over time the dollar must decline in relative value to a level conducive to equilibrium in the balance of payments. As this occurs we will undoubtedly experience changes in consumption patterns as well as structural adjustments in the makeup of the national economy. As many are now commenting we may well be entering into a different and changed world.

The saving grace we've enjoyed for some decades has been the role of the US dollar as worldwide medium of exchange and holder of value of last resort. When in panic, foreigners tend to flee to the dollar. But the balance of economic power is shifting. The G-20 meeting held this month in Washington, DC, included in addition to the usual G-8 representatives, the presidents of China, Brazil, Mexico, South Africa and Indonesia as well as prime ministers from South Korea, India and Australia. In my view the locus of economic power has shifted from the Atlantic to the Pacific basin and the economic hegemony of the US will be challenged and most probably diminished in the years to come. Europe is already far less important now relative to the world economy than in the past and Japan is on track to follow. It's a new world out there!