More than seventy years after the Harrison Act began the federal prohibition of cocaine and opiates; almost fifty years since the beginning of federal marijuana prohibition; and almost six years into the Reagan Administration, America finds itself in the grip of a frenzy over the "drug crisis." How can this be, with all that has been done? Some blame the "pushers." Others rightly point out that there is demand as well as supply, and also blame the users. In fact, there is good reason to believe that the government itself, for all that it has proclaimed yet another war on drugs, has been one of the most potent causes of the current crisis.

It is difficult to admit that the medicine we are prescribing might just be the poison that is causing the illness; yet the "energy crisis" was largely a creation of federal regulations meant to ensure adequate supplies at a reasonable cost. Inflation, a very real threat to any economy, is masked and then made worse by price controls. Forced busing, the statisticians now tell us, actually increased racial segregation, while wrecking many public-school systems.

In a similar way, government policy has aggravated our society’s chronic problems with drugs by mounting a propaganda and enforcement campaign that erodes crucial distinctions between more and less dangerous drugs, makes the marketing of the more dangerous variety the preferred option for dealers, and increases health risks, crime, and corruption. These same tendencies have produced the crisis of the moment, the crack scare. Let’s look at crack first, since that will help give us an overview of the economics and psychology of the drug war.

It is very important to remember that the laws of supply and demand work with contraband as with everything else. What happens when something that people want is made illegal?

1. The supply drops more than the demand, so the price goes up.

(Indeed, drug demand has increased enormously under prohibition.)

2. Forcing the illegal product underground garbles the flow of information necessary to an efficient market. Without an efficient market, there is less price competition.

3. Lacking competition, dealers charge monopoly prices, and profit margins widen.

4. The big profits draw in people who would not otherwise break the law, spreading corruption among the police and disdain for the law among otherwise law-abiding citizens. (Of course, big profit margins also attract people who are very experienced at breaking the law. See item #6.)

5. Supply becomes conspicuous, marketing becomes more aggressive, the price falls, and demand rises, drawing the attention of the forces that got the substance outlawed in the first place.

6. The law cracks down on the supply, driving the amateurs out of business and leaving organized crime in control, now with even higher profit margins and with connections to corrupt law enforcement. At this point the illegal market has attracted the people capable of making it an institution, including some who wear badges. Henceforth it will be all but impossible to eliminate the suppliers. Greater enforcement can shake out the less skilled or the less daring but merely raises incentives for those who remain. Greater enforcement (i.e., more regulation) can also affect the market in perverse ways: The iron law of drug prohibition is that the more intense the law enforcement, the more potent the drugs will become. The latest stage of this cycle has brought us the crack epidemic. There are two inescapable reasons for this.

First, from the supply perspective, it is good business to minimize the bulk of contraband. Smuggling beer and wine was less profitable than "rum running." Tiny pieces of crack are easier to carry than cocaine powder, which in turn is far less bulky than the coca leaves that are used legally by the Andean Indians. Heroin replaced opium for similar reasons. Obviously, the bulkiest illegal drug, marijuana, will lose out in the supply channels to cocaine and heroin.

Marijuana remains the principal target of law-enforcement efforts, despite the current crack-generated headlines. One result is that the weed, which can be grown anywhere, is being cultivated in more potent strains to justify a higher price per pound. The price must rise to justify the risk of transportation.

The same considerations also encourage the substitution, for marijuana, of its concentrates, hashish and hash oil, which are many times more potent. It is even possible that marijuana enforcement, with its effects on price and availability, is pushing marijuana users toward cocaine and worse. The New York Times recently quoted a Los Angeles narcotics officer: "I hate to say it, but we, law enforcement, may be driving people into the arms of the coke dealers by taking away their grass. But we have got to enforce the law."

Second, from the demand perspective, the more potent forms of drugs offer the user the same convenience of transportation that is of value to the supplier. However, while it is impossible to overdose fatally on the marijuana derivatives, precise dosage is at once more critical and more difficult to achieve with any synthetic or concentrate like crack. This leads us to an essential point. Though the anti-drug crusaders, in their self-righteousness, may imagine that most drug users are irrational and self-destructive, the reality is that most of them are "People Like Us." Some drinkers drink to destroy themselves; the vast majority prefer to drink safely and happily and therefore moderate their drinking. The majority of recreational drug users would prefer to do the same.

Normal people have good instincts for self-preservation. Thus, without much pressure from the government, we have seen in recent years a powerful trend toward weaker versions of legal drugs, wine coolers in place of distilled spirits, filtered cigarettes low in tar and nicotine, even decaffeinated coffee and tea. To be sure, drunk-driving laws may have accelerated the trend; but, whatever their imperfections, the laws against drunk driving are far more rational than the drug laws in that they outlaw not substances but obviously reckless behavior. Just because drunk-driving laws are fairly rational, there is less rebellion against them. On the whole, the trend toward safer dosages of legal drugs gives massive testimony to the rationality of normal people.

Under current law, no such trend is possible for illegal drugs. The war on drugs is a war on rational behavior by drug users. With illegal drugs the trend is accelerating in the wrong direction, not because of the thrill-seeking or self-destructive minority, but because of the dynamics of the markets for contraband. Synthetic drugs to replace heroin are already available and are as much as a thousand times more potent than the real thing. Synthetic crack cannot be far behind. Not only are synthetics less bulky and easier to conceal, they can be made anywhere, eliminating the need to cross national borders with drugs made from foreign natural ingredients. The escalated drug war virtually guarantees their eventual dominance of the market. To be sure, high-dosage drugs can be "cut" by retailers and users, but it is easy to get a dosage fatally wrong.

These perversities of drug enforcement encouraged the crack craze. But it is important to remember that they are not accidental perversities. They are the natural outgrowth of two things: the world view of the anti-drug crusaders and the self-interest of the drug-enforcement establishment _the narcocracy. The anti-drug crusader would suffer a blow to his self-righteous rhetoric if he admitted that drug users and the drugs they use are a varied lot, that many drug users are rationally self-protective, and that many of them use mild dosages of not very harmful substances. He could not then depict millions of Americans as either depraved criminals or helpless victims, or paint the country as being in the grip of a major crisis.

Similarly, if the narcocracy owned up to the truth, both its self-esteem and its budget would be seriously diminished. For beyond all the headlines about crack lies the truth about the narcocracy, which is that most of its law-enforcement activities and related propaganda are really aimed at marijuana. More than half of all drug arrests are for the simple possession of small quantities of marijuana. This is absurd.

Marijuana carries some health risks, but it is no more dangerous than many substances that are legal. Yet marijuana enforcement is the bread and butter of the drug-war biz.

The narcocracy’s need to convince its funders in the government and the public at large that we face an undifferentiated "drug crisis" is what makes the war against drugs so damaging. Above all, it undermines drug education. Though it would be difficult to prove, it is probable that one of the reasons "the street" didn’t accept warnings about crack is that the same people who are responsible for issuing those warnings are still claiming that marijuana is an extremely dangerous, or even "the most dangerous," drug. Why believe an obvious propaganda machine that is constantly making fiatly ludicrous claims, such as the wild assertion by White House drug advisor Carlton Turner that marijuana may cause homosexuality? Or how about the pronouncement by the head of the Alcohol, Drug Abuse, and Mental Health Administration, Dr. Donald Macdonald, that marijuana causes AIDS, because most intravenous drug users used marijuana before they used intravenous drugs? Would any person of that level of intelligence say something so obviously stupid if he didn’t have to beg money from Congress every year? Perhaps Macdonald just wanted to distract attention from the role drug prohibition has played in the spread of AIDS among heterosexuals by making it hard for intravenous drug users to get clean needles.

The narcocracy’s obsession with marijuana has gone so far as to include proposals to withhold alcohol- and drug rehabilitation funds from states that decriminalize possession of pot. In Alaska this might not be a problem, but in New York the consequences would be disastrous. This sort of thinking makes credible drug education for children politically impossible. This is perhaps the most perverse of all the costs of this failed program. By trying to justify arresting adults, we undermine the efforts to keep children from using drugs. Billions of dollars aside, there are many other costs, both at home and abroad.

Drug prohibition is a financial version of what lawyers call an "attractive nuisance," like an unfenced swimming pool in a neighborhood full of children. The profits are so huge that they can tempt people who are normally beyond the reach of corruption. This is particularly true of the poor of Latin America. A peasant can let his family starve, or he can grow coca. An unemployed pilot can let his family live on the ragged edge of poverty, or he can make a few trips north. Even in the U.S., sometimes there is the motive of genuine need, especially in the slums, or among farmers and ranchers teetering on the edge of bankruptcy.

Over the last few years more than three hundred state and federal officials have been charged with drug-related corruption or actual trafficking, undoubtedly only a fraction of those actually involved at every level. So, when we scold Mexico and other Latin American countries about their corruption, they tend to regard us as hypocrites. However, the fact is that the attractive nuisance of drug prohibition has greatly increased corruption in those countries as well, to the point where it is destabilizing their governments. In the case of Bolivia the narcotraficantes even took control of the country for a time, the so-called Cocaine Coup, but Bolivian governments usually don’t last very long anyway. Mexico, on the other hand, is a situation that we must take very seriously, and Colombia is immediately south of the Panama Canal.

Throughout Latin America there has evolved a cynical but pragmatic alliance between smugglers and Communist terrorists. The more we increase the pressure, the closer this alliance will become, and the more the Communists will benefit from the profits. The ultimate outcome could be a complete Communist takeover of the drug business. The profits would far exceed Soviet expenditures on Nicaragua and even Cuba. Communist involvement is already being used as a justification for intensifying the drug war, but it is the very intensity of U.S. efforts that has put so much power in the hands of our committed enemies. As the narcocrats make the problem worse, they will demand ever more power to solve it.

The American criminal justice system, meanwhile, is on the verge of collapse because of drug prohibition. Even if expensive drug habits did not create criminals, and there is no doubt that they sometimes do, the cost of illegal drugs certainly increases the number of crimes that criminal addicts must commit. Drugs are without a doubt the most powerful corrupters of the police and the court system. For those who have not been corrupted, the failure of the drug laws to have a positive impact on the drug problem has caused great frustration. This has led to calls for more power to be given to the police, and even to cells for suspending the Constitution. There is no prospect of this happening on a wholesale basis, but our liberties are being incrementally eroded at a rapid pace. The existing and proposed laws constitute the basic elements of a socialist police state. There are already controls on cash and capital transfers, calls for the canceling of hundred dollar bills, violations of the long-standing principle of lawyer-client confidentiality, and the authority to seize the accused’s property before a trial or even after acquittal.

Perhaps the greatest damage to the criminal justice system is done simply by making criminals out of the twenty to thirty million Americans who regularly use marijuana. As a social and health problem for adults and children, marijuana does not even begin to compare with alcohol. We have had almost twenty years of experience with the drug. Many children and some adults have problems with it, and many have quit using it (much more easily than alcohol or tobacco). It certainly is not harmless and should not be used by children, or by adults in the workplace or while driving, but where are the mortality tables? Where are the illnesses and/or social pathologies comparable to those which can be documented for every other widely used drug? Perhaps the absurdity and hypocrisy that dooms drug prohibition can be best summed up in a simple juxtaposition. Approximately one thousand Americans per day die alcohol- and tobacco-related deaths. Approximately the same number of Americans are arrested every day for the simple possession of marijuana.

Any realistic approach to the drug problem must begin with the legalization of small-scale cultivation and sale of marijuana to separate it from the other, more dangerous drugs. If we are going to continue to use force to try to suppress the stronger drugs, the resources currently being used on marijuana must be transferred to them. If we are going to find a controlled legal delivery system and safe packaging for the other drugs, obviously the same will apply to pot.

We need not fear that if we stop the lying and the hypocrisy, the American people are going to destroy themselves with drugs. Any effective anti-drug program is going to have to recognize that alcohol abuse is the major American drug problem, and that most of the social problems associated with illegal drugs are primarily a function of their illegality, created by prohibition. A really drug-free America would necessarily be an alcohol-free America, and we know from experience that this is not possible. Consequently, any program that is aimed at keeping children away from drugs, instead of drugs away from adults, is going to have to deal honestly with legal drugs, alcohol, tobacco, etc., and with the differences between adults and children, a distinction unpopular with both adolescents and authoritarians of all ages.

In his anti-drug speech, President Reagan urged: "Please remember this when your courage is tested: You are Americans. You’re the product of the freest society mankind has ever known. No one ever has the right to destroy your dreams and shatter your life." Precisely, Mr. President. And we should remember exactly the same thing when our urine is tested.