Here's The Wall Street Journal's Mary O'Grady on Mexico's War on Drugs and the country's decision to decriminalize minute possessions. A key point:
Mr. Calderón's new policy is unlikely to solve anything... The reason is simple: Prohibition and demand make otherwise worthless weeds valuable. Where they really get valuable is in crossing the U.S. border. If U.S. demand is robust, then producers, traffickers and retailers get rich by satisfying it... trafficking will remain illegal, and to get their products past law enforcement the criminals will still have an enormous incentive to bribe or to kill. Decriminalization will not take the money out of the business and therefore will not reduce corruption, cartel intimidation aimed at democratic-government authority, or the terror heaped on local populations by drug lords.
To understand the War on Drugs, this point needs to driven home. The value of an illegal drug, like any good, does not stem from what one party believe it is worth. It is determined by what all the other players in the marketplace think it is worth. But with drugs and other illegal products, you get highly distorted prices for one main reason (there are of course many others, but this one, in my estimation, is key).
That is the lack of application of The Rule of Law. Without The Rule of Law, anything goes. Contracts cannot be enforced and private property has no relevant meaning, so the actors in the market do not have a stable or predictable environment to engage in. This is then intensified by the extremely harsh penalties that are applied to those caught dealing in this illicit affair. Consequently, the incentives to commit violent crimes to accomplish ones goals increase dramatically (why negotiate with another party when one can just kill them? If one get caught doing either the penalties are both so bad there is little difference).
Combined with high inelastic demand, the result, as we have seen for four decades now, is quite disastrous. The true problem is the illegality of the transaction and the idea that demand can simply be stemmed by government policy. This is beyond naive. People enjoy getting high. It's a reality of life that we all should get used to (and enjoy).
Hillary Clinton said back in March "Our [American] insatiable demand for illegal drugs fuels the drug trade." On a very simple, face-value level she is correct; if no one wanted to get high, then drugs would not be a commodity in demand and there would be no violence surrounding it. But what Mrs. Clinton is clearly implying is that demand is the main cause for the violence that surrounds the drug trade. This is wrong. Foreign beer, foreign cars and foreign accounting services are all highly demanded goods or services, but none are plagued by the violence that follows the drug trade around like a shadow. Why is that?
Prohibition breeds crime because no matter what majorities, politicians and special-interest groups may want, demand for certain goods and services will always exist. So instead of driving these industries into the hands of violent criminals, we should instead accept them as a part of our modern-day culture and facilitate their legal and open transactions peacefully.
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