More of the United States are legalizing medical marijuana, and voters in two states—Washington and Colorado—voted to legalize marijuana for recreational use a few years ago. The legalization is subject to certain restrictions, but it is a step toward ending the world’s failed experiment with drug prohibition. Will the US turn into a nation of potheads? No.
There might be some very minor drawbacks, but ending prohibition is almost all upside.
What can we expect from legalization? In response to lower prices and lighter penalties, there will probably be a small uptick in consumption—but it isn’t likely to be that large. Drug consumption isn’t very price sensitive, so smaller penalties and lower prices probably won’t mean a very large increase in consumption.
Falling marijuana prices will lead to lower demand for marijuana substitutes, like alcohol and, presumably, harder drugs like crystal meth and crack. Legal marijuana might also be good for economic growth. On one hand, it might seem like more people smoking marijuana would be bad for productivity, and indeed this might be the case. But this misses the larger picture: over the long run, lower marijuana prices and fewer penalties for consumption could reduce demand for harder drugs and reduce some of the problems associated with excessive alcohol consumption.
Furthermore, we might get an end-of-the-drug war “peace dividend.” Legalization frees up police resources to solve other possible crimes, will reduce some of the violence associated with the drug trade, and will mean a reduction in America’s dizzyingly-large prison population. Less crime and violence, police officers fighting real crime rather than harassing pot users, would-be and former prisoners producing rather than consuming, and people taking less time and energy evading police detection will be good for economic growth. It’s no panacea, to be sure—I don’t expect a “reefer recovery” to fix the American labor market or the world economy—but I expect that we will enjoy a peace dividend from scaling back the drug war.
Economists study human action and its unintended consequences. Drug prohibition constitutes a set of policies with unintended consequences that have been disastrous. Fortunately, some of the United States are legalizing medical marijuana and some states are even legalizing its recreational use. Some fear that the end of prohibition will lead to a world that is stoned, licentious, and unproductive. If I may be blunt, these fears are pure reefer madness. Colorado and Washington blazed an important trail. Other states and countries should follow.