Monday, September 20, 2010

A Free Market For Marijuana

First off, let me state this clearly: I don't use marijuana. I have never used marijuana. I dislike the smell of marijuana. Were marijuana legal, I would still not use it.

However, we cannot deny the fact that there is a considerable, and currently illegal, market for marijuana. We spend upwards of $50bn per year at the federal, state, and local levels to enforce drug laws and prosecute drug offenses. Our courts are clogged with drug cases, and our jails and prisons are overflowing with drug-related prisoners.

I am not in favor of legalizing drugs generally. However, I am in favor of legalizing marijuana for two reasons. The first is a simple one: there is no evidence that marijuana use motivates criminal acts in the way which harder drugs can- for example, committing burglary to get money for the next fix. There is also no evidence that marijuana is a public health hazard (one doesn't inject it, after all). If it no more dangerous than alcohol or tobacco, there really is no sense in prohibiting it (and spending money to enforce said prohibition).

The second reason is a bit more involved: I believe legal marijuana trade could be an important source of revenue for the hardest-hit sectors of our economy.

Imagine this: With the stroke of a pen (legalizing marijuana possession and sale), the groundwork would be laid for a brand-new industry, but unlike most fledgling industries, there would already be a demand for the product, to the tune of millions (perhaps tens of millions) of users. And it's a consumable product, to boot.

What better way to engage the hardest-hit sectors of our economy?:

Agriculture- The agricultural sector hasn't just been depressed for the last few years, it has been declining for decades. We now import almost as much food as we produce domestically. A legal marijuana industry would require considerable farming- and farm labor;

Manufacturing- Factories are closing. New factories aren't being built. Factory operations are being pared down- and factory workers laid off in droves. Factories would be needed to process and package this product, and that means factory jobs;

Transportation- The trucking industry gets a boost, too, since you'd need to ship product from farms to factories, and from factories to retailers. That's a large distribution chain, and alot of miles to cover;

Retail- The availability of a new, high-demand product would be a boon to small retailers- especially since major, "family-friendly" establishments such as Walmart would be resistant to selling marijuana;

And of course, starting up this new industry would require venture capital, and lots of it. And small business loans, too. Let's get lenders lending (and making money) again.

Naturally, you'd need a regulatory agency- and this, to me, is especially attractive: We need to cut government spending, and a major opportunity to do so is in government agencies where administrators are fighting to avoid civil service layoffs. A regulatory agency for a marijuana industry could be funded solely with regulatory fees and taxes- in other words, funded solely by those who consume the product. Such an agency would need civil servants, providing a way to transfer thousands of state and local civil service workers from jobs which are taxpayer-funded into jobs which cost nothing to the taxpaying public (at least, those who choose not to consume marijuana). In other words, a free-to-the-taxpayers "dumping ground" (for lack of a better term) for civil service workers who would otherwise collect unemployment at the taxpayers' expense. Add in the savings in criminal justice spending, and it'd be a bargain for the taxpayers.

So, by legalizing marijuana, a substance which presents no measureable public safety harm, we have a means to inject some capitalist revitalization into the hardest-hit sectors of our economy- agriculture, manufacturing, transportation, retail sales, and financial services. We provide a way to soften the blow to some civil service workers whose positions need to be cut for the sake of austerity. And we save the taxpayers billions of public safety dollars.

Now, there is the issue of federal law on the subject of possession of marijuana. Question: does the Constitution expressly grant the federal government the power to create and enforce laws regarding the possession of drugs? Of course not- and so the that law is already invalid. Even if we accept that a lawful trade in marijuana would constitute interstate commerce, federal law would still pose no significant problem for this industry- instead of a few large, national corporations dominating the industry (as is the case with cigarette sales), it'd be fifty or more state-level small businesses, each buying their raw materials from farms and other small businesses within their state, and each selling their product to small retail businesses within their state. No 'interstate' marijuana commerce, no marijuana tax revenues for the federal government.

And on the medical marijuana side, tax-free marijuana (or, alternatively, non-smoking marijuana products) could be sold tax-free through pharmacies, with a prescription.

Is this proposal a "magic pill" to fix our economic woes? Of course not. But it IS yet another example of how the free market can provide much better solutions than government to our economic problems.

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