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US Gone to Pot, but Not Completely

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November 12, 2012

Tags Free MarketsInterventionism

The only good thing about the 2012 campaign — other than its being over — is that much progress was made on marijuana policy. Marijuana was legalized in two states, Colorado and Washington. Medical-marijuana legislation passed in Massachusetts. Marijuana was decriminalized is several major cities in Michigan and Burlington, Vermont, passed a resolution that marijuana should be legalized. The only defeats were that legalization failed to pass in Oregon and medical marijuana was defeated in Arkansas.

This is a stunning turnaround from the 2010 campaign when Prop 19 in California failed to pass despite high expectations. I explained in detail why Prop 19 failed here. It was an unfortunately common story of Baptists, i.e., people who oppose it, and bootleggers, i.e., people who profit from black-market sales, who stopped the legalization effort.

With regards to the legalization victories in Colorado and Washington, Tom Angell, Director of LEAP (Law Enforcement Against Prohibition) called the election a "historic night for drug-law reformers." Paul Armentano, the deputy director of NORML (National Organization for the Reform of Marijuana Laws), called the Colorado and Washington victories "game changers," noting that "both measures provide adult cannabis consumers with unprecedented legal protections." He noted that "until now, no state in modern history has classified cannabis itself as a legal product that may be lawfully possessed and consumed by adults." Writing for the Marijuana Policy Project, Robert Capecchi called Colorado and Washington "historic victories," saying that they "represent the first bricks to be knocked out of the marijuana prohibition wall."

Following is a list of all marijuana measures on the 2012 ballot as provided by LEAP:

ColoradoMarijuana legalizationPassedWashingtonMarijuana legalizationPassedOregonMarijuana legalizationFailedMassachusettsMedical marijuanaPassedArkansasMedical marijuanaFailedDetroit, MIDecriminalization of adult marijuana possessionPassedFlint, MIDecriminalization of adult marijuana possessionPassedYpsilanti, MIMarijuana to be lowest law enforcement priorityPassedGrand Rapids, MIDecriminalization of adult marijuana possessionPassedKalamazoo, MIThree medical-marijuana dispensaries permitted in cityPassedBurlington, VTRecommendation that marijuana should be legalizedPassedMontanaReferendum restricting medical marijuanaLikely to pass

Some readers might not be fired up at the prospects of legalization, decriminalization, and medical marijuana, but the benefits are higher than you might think. First of all, the economic crisis is a great opportunity to get this type of reform passed. There are several economic dimensions at work here. The most obvious thing that comes to mind is that legalized marijuana might be a source of tax revenues and possibly excise taxes and license fees. It would also be a source of jobs, although the net gain in jobs and incomes is probably initially small.

A major benefit would be a reduction in the size of government. Marijuana prohibition results in hundreds of thousands of people being arrested, tying up police, jails, courts, and prisons. When the city of Philadelphia decided to make marijuana prohibition a low priority and treat it like public intoxication ($200 fine), they ended up saving $2 million in the first year.

One of the most important benefits of these measures is that they make for a more liberal society in the Misesian sense. Marijuana prohibition is public violence, prejudice, and partiality. Legalization and liberalism is private property and public tolerance. As Ludwig von Mises wrote,

The essential teaching of liberalism is that social cooperation and the division of labor can be achieved only in a system of private ownership of the means of production, i.e., within a market society, or capitalism. All the other principles of liberalism democracy, personal freedom of the individual, freedom of speech and of the press, religious tolerance, peace among the nations are consequences of this basic postulate. They can be realized only within a society based on private property. (Omnipotent Government, p. 48)

The key thing, economically speaking, is that more liberalism is good for business, jobs, and prosperity. Legalizing marijuana, along with things like same-sex-marriage laws, may be appalling to some people, but when companies are looking to get started or establishing new operations, those are some of the things that are looked at, just like taxes, schools, crime, etc. States that are competing for the best companies that offer the highest paying jobs are the same states that are liberalizing their policies.

Therefore, it should come to no surprise that a state like Washington legalized marijuana even though it does not have a history of marijuana-reform activism. Washington needs to compete with other states for computer programmers, engineers, and technicians for Washington-based firms like Boeing and Microsoft. Do not be surprised if what happened in Colorado and Washington spreads to other states in coming elections.

The most important aspect of the victories in Colorado and Washington is that the people of those states stood up and voiced their opposition to the federal government and its policy of marijuana prohibition. They are directing their state governments to no longer cooperate with the federal government. You can bet that federal officials will seek to intimidate local officials and businesses as they have done in California. They seek to use fear and violence to maintain their power.

However, demographically and ideologically, they are fighting a losing battle. Supporters of legalization are younger, smarter, better educated, and have above-average incomes. The leaders of the reform movement do not seem to view their efforts as "pro-marijuana," but rather as anti-prohibition, and they realize that the benefits are in terms of health, public safety, and prosperity.

When my book The Economics of Prohibition was published 20 years ago, I was often asked my opinion if marijuana should be or would be legalized. My stock answer was that medical marijuana would start to be legalized in 10 years and that marijuana would start to be legalized in 20 years, probably during an economic crisis. My only prediction in print was that the reform process would begin around the turn of the century. The first reform was actually a medical-marijuana law passed in California in 1996.


Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.

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