Licensing Drug Users

In previous posts, I argued that you can simply tax drugs rather than prohibiting them. However severe you want the deterrent to be, a tax is strictly speaking a better policy than outright prohibition. Too many people are still using drugs, you say? Well, ramp up the tax and watch demand fall. (“They will just go to the black market like they do today?” Gee, it’s a good thing prohibition stops that from happening.)

I anticipated an objection to this argument. Perhaps prohibition doesn’t simply increase the cost per unit of the prohibited substance, same as a tax does. It throws up large fixed costs to acquiring the drugs in the first place. The user first needs to find a dealer. He needs to consider, categorically, whether it’s worth the legal risk and effort of finding a supplier. He needs to go to bumpin’ parties or shady parts of town to make his hookup. He can’t just waltz into the local convenience mart and buy some. So in this sense, prohibition achieves something that a taxation regime does not: the user faces a high fixed cost to drug use (in addition to a per-unit “tax” that prohibition achieves by making the drugs more expensive). But this fixed cost really only needs to be paid once (or only once in a while). It’s kind of like the “activation energy” for a chemical reaction. Once overcome, you’re good to go.

The answer to this objection: license drug users. Make them go to a few special classes before they can, say, use heroin. Once they have been thoroughly lectured about things like dosage, safety, and treatment of overdoses, they get a special card and can use drugs with impunity. Unlike the time wasted searching for an illegal dealer, the time spent in drug safety classes would actually have a social benefit. Users of potentially dangerous substances can learn how to avoid an overdose, which drugs to avoid in combination, which drugs to use with a “spotter” who can call for help if needed, which antidote to have on hand, etc. Age, illness, and multi-drug use are huge risk factors for overdose; informing users of these risks would be a lot more effective than a general deterrence policy.

The licensing regime would be better targeted than the current prohibition regime. It would hit poor, marginally employed drug users in a way that "illegal market search costs" don't. These people probably know a lot of other drug users and can easily find a source if they just ask a few people in their social network. These are the problematic drug users that drug policy should be trying to address. Middle- and upper-class, educated users with careers and families are less likely to develop bad habits because they have more to lose. Their lifestyle has a built-in deterrent considering that a problematic drug habit can destroy their career or tear apart their family. The current regime is probably prohibitive for these folks because they often don't have the "shady" criminal element in their social networks. In other words, the current regime (general drug prohibition) is targeted to the potential drug users who we don't really need to worry about and misses the people who are most likely to cause problems. I'm speaking entirely in relative terms, of course. Nobody is totally "safe" and nobody is 100% likely to have problems, but different populations surely face different degrees of risk here.

User licensing would be paternalistic in the extreme, but it’s infinitely more sensible than prohibition. It still achieves the result of getting rid of the black market, with all the associated problems of violence and adulterated drugs and unnecessary poisonings. (It would mostly get rid of the black market, anyway. If there were still a small residual illegal market, so what? That would still be a massive improvement.) It would surely decrease the overall number of overdoses assuming the drug classes gave relevant safety information; today drug buyers get no such help.

Incidentally, some economists have already had this idea. See Emily Skarbek’s piece at Econlog here and a research paper (gated) here. It’s a fine idea and needs to be expanded upon.

Don’t misunderstand me as saying that punitive taxes and user licensing are the best possible policy. I think something much closer to total laissez-faire would actually be preferable. If drug prohibition were repealed and user licensing and drug taxation implemented, I would probably start arguing for their gradual repeal. Maybe not all at once, but make the user licensing less and less onerous over time, and gradually reduce the drug tax to the ordinary rate of sales tax. But my speculation on optimum policy is neither here nor there. In this post, I’m merely pointing out that everything drug prohibition seeks to accomplish can be achieved more humanely in a regime of full legalization. A tax on legal drug is a continuously adjustable dial that can be used to “dial down” drug use if it’s a problem, and user licensing is a big fixed “barrier to entry” to potential new users. If the black market comes roaring back, you can dial down the taxes and make the licensing less onerous. Prohibition, on the other hand, is not an adjustable dial. It’s a hammer. You can’t simply dial it up or down if it’s not working right, and it guarantees that 100% of the market will be a black market (as opposed to a much smaller proportion as we see with cigarettes and alcohol). We can accomplish all the deterrent effects of drug prohibition without all the associated problems: black market violence, failed narco-states in Central and South America, blood-borne diseases in intravenous drug users, adulterated drugs, wildly and unpredictably fluctuating drug purity, wasted law enforcement resources, diminished respect for the rule of law, disruption of families due to prison time, harassed motorists and pedestrians, etc., etc., etc. These are sensible policy tweaks. We should implement them in the short term and consider scaling them down in the longer term.