There’s a fascinating lesson in the economics of prohibition to be learned from this report of a drug dealer who moved from California, where marijuana is basically legal, to New York where it remains illegal:
Meet Chuck, a San Francisco marijuana dealer, who came to New York from California to sell weed because, in New York, where his trade is 100% illegal, he can make more money.
Welcome to the contradictory-seeming economics of the nation’s fast-changing marijuana laws. Eighteen states and the District of Columbia have now rebelled against the federal government to legalize marijuana, either for medical use or for fun. And, it turns out, when one state brings an underground market into the mainstream and another doesn’t, there are economic consequences in both places: the rise of medical marijuana in California is, strangely enough, what drove Chuck to New York.
The lesson is that prohibition doesn’t change demand so much as it changes the nature of the market.
When the government tried to ban alcohol, they didn’t lessen demand for booze. They just drove the legal market for beer, wine and liquor underground where it was serviced by dangerous, murderous gangs.
The same is true of marijuana prohibition. We’re not stopping people from wanting marijuana. We’re just forcing people who want marijuana to buy them from criminals instead of law-abiding entrepreneurs.
“Much of the root cause for violence that has been happening here in Mexico, for which so many Mexicans have suffered, is the demand for illegal drugs in the United States,” President Obama said during a speech at Mexico’s Anthropology Museum recently. He’s absolutely right. In fact, much of the illegal traffic across our border with Mexico would cease were Americans able to purchase marijuana legally here in the United States.