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The Economics of Prohibition - Mark Thornton

The Economics of Prohibition - Mark Thornton

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Alcoholism: It's healthier than prohibition.
Alcoholism: It's healthier than prohibition.

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Categories:Types, Research
Published by: Matt on Apr 18, 2009
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others through politics is deceptive. The liberties of some cannot
readily be restricted without limiting the liberties of all" (340).
Before turning to specific results of prohibition, it is worth not-
ing that its implications are much wider than basic economic analysis
reveals. It is not mere speculation or chance that the macropolitical
implications described above go hand in hand with prohibition and
that these consequences are greater than those generated within a
prohibited market.


The Potency of Illegal Drugs

Another factor contributing to increased health consequences
of marijuana use is the increase in potency over the past several

—The White House Drug Abuse Policy Office, 1984 National

Strategy for Prevention of Drug Abuse and Drug Trafficking

Drug prohibition establishes a wholly superfluous discovery
process with respect to the potency of illegal drugs. Black-
market entrepreneurs are spurred on by artificial, prohibition-created
profit opportunities in a similar fashion to entrepreneurs in a legal
market responding to profit opportunities. At one level, the entrepre-
neur supplies a profit-maximizing quantity of the product, in both
legal and illegal markets. On another level, the profit motive prompts
entrepreneurs to alter production techniques, product quality, and the
product itself.

Market forces lead to certain industry standards, such as twelve
ounces in a can of soda and four rolls of toilet paper per package. Each
product line in the market, whether breakfast cereals or light bulbs,
moves toward an efficient level of product diversification (heteroge-
neity), the lowest cost of production, and optimal quality levels for
the product. In the black market similar tendencies exist. In prohib-
ited markets, however, consumers face fewer choices at any time, but
severe product variability over time.
The potency of narcotics, cocaine, alcohol, and marijuana
increased significantly after the enactment of prohibition. In the
United States during the past century, opium was virtually replaced
by morphine and, later, morphine by heroin. The original Coca-Cola


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