Was there ever a miracle drug to match marijuana? A few puffs on a legalized, regulated and taxed joint, and you’ve not only closed the billion-dollar budget holes faced by government but you’ve eliminated the economic driver behind much of the criminal activity plaguing the globe.
Or so the sizeable and increasing population of Hemp Head Nation would have you believe.
Decriminalization, legalization, whatever the term du jour, it’s all the fashion these days in political circles. The new mayor of Seattle is in favor of it. Legislators from the Puget Sound region have introduced a legalization bill (one of the sponsors was quoted in an Associated Press dispatch as saying she wants to start a “strong conversation” on the topic; in modern political parlance, “conversation” usually means hectoring monologue or lecture). In Oregon, several efforts are under way to get a measure on the ballot to legalize weed.
We’ll set aside for another day discussion of the health and societal implications of legalizing marijuana, other than to note the contrasting trends of allowing, even encouraging, increased use of one combustible commodity while smoking another substance – tobacco – seems headed for its own Prohibition.
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Also up for debate – sorry, “conversation” – is the notion that much of the real world is as sanguine about the impact of increased drug use as the chattering classes seem to be (try convincing your average parent, especially those with teenagers, that society’s collective shoulder-shrug toward drug use is a good idea).
But we can certainly have a “conversation” about the economic arguments made to justify legalization – and dispense with them.
No. 1: A little legalized vice is worth it if it pays the bills. Think of all the revenue to be had by taxing marijuana. If it seems as though there’s an echo in here, there is. You’ve heard this argument before – with state lotteries. It might be easier to list the states in which the lottery wasn’t sold as the permanent answer to the problem of how to fund public education.
It wasn’t. Marijuana sales-tax revenue won’t be either. Even if you believe the estimates of the marijuana trade currently, it’s a reach to believe all those sales will automatically transfer to legal channels.
Furthermore, sales may not be nearly as large as hoped for. No matter how blissfully stoned happy faces proponents try to slap on packages of legal marijuana, and the use thereof, cannabis consumption will continue to carry some societal opprobrium. And those who continue to indulge may decide they’d rather smoke unregulated, untaxed, cheaper weed. Another potential reduction of revenue: States trying to goose sales and tax revenues may wind up undercutting one another on the tax cut they take, much the way some states compete on the taxes they levy on booze. Which leads us to this argument…
No. 2: Like marijuana use, we can stop with marijuana legalization. Marijuana may not be the gateway to harder stuff for all users, but legalized vice rarely pauses in the doorway. To understand why this is so, let’s go back to the example of legalized gambling, where states are already engaged in an unending, unwinnable race to the bottom.
The next state over introduces a lottery? Fine, we’ll boost the stakes and promote ours more heavily. They match us? Fine, we’ll expand to more exotic forms of gambling. Them too? Fine, we’ll opt for casinos, slots at horse-race tracks, slots wherever there’s a sucker with money to drop. Which might provoke our neighbors to leapfrog us with ever more prevalent gambling. Which we’ll somehow have to meet or exceed.
We will if we want to maintain our revenue from gambling, that is. The same phenomenon will occur with marijuana legalization. Once most states have legalized it and the tax high doesn’t thrill like it used to, states like Washington desperate for a revenue fix will start looking for something else to push into the hands, and mouths, of its citizenry.
What next are you prepared to legalize? Won’t that be a lovely “conversation” to have.
No. 3: Look at what drug-motivated crime is doing not just in the U.S. but around the world. If you legalize marijuana, you take away the profit motive behind drug-related crime. This is the big one, an argument compelling even to those uncomfortable with the “smoke ’em if you got ’em” attitude toward marijuana. Making the argument all the more attractive is the money spent on and supposed futility of the War on Drugs.
Attractive, but not valid. Crime gangs may be happy to walk away from the marijuana trade, a bulky, low-value commodity, in favor of other higher-value, easier-to-make-and-move substances.
They are not, however, likely to throw up their hands, say “You win, you’re too smart for us,” and walk away from a lucrative trade they’ve cultivated, unless you’re prepared to legalize the sale of everything that the populace might turn into a mind-altering material.
And even then, that won’t chase crime away. Organized crime can make a healthy business out of illicit traffic in legal-and-regulated items – like cigarettes, in which there’s been a lively tax-dodging trade for decades.
(Since the unhappy experience of alcohol’s Prohibition always gets tossed into the debate, we ought to consider why illicit traffic in alcohol didn’t persist after repeal. Here’s a theory: Alcohol is bulky, heavy and not easy to produce at a quality level in sufficient quantities to slake Americans’ thirst. The commercial ventures that legally produced beer, wine and spirits before Prohibition went back to doing so after repeal. Production of marijuana and similar items was never done on a legal, commercial scale.)
The forces pushing for marijuana legalization will do so with arguments ranging from personal freedom to lack of harm to individuals or society at large. There are cases to be made on both sides of those debating points. But when it comes to the economic rationalization for legalizing and taxing the tokers, the proponents’ case is filled with bottles of another well-known American cure-all elixir – snake oil.
Bill Virgin’s column on business and economics appears Sunday in The News Tribune. He is editor and publisher of Washington Manufacturing Alert and Pacific Northwest Rail News. He can be reached at firstname.lastname@example.org.