The Drug War

Speech to the Federation of Republican Women, Monterey, CA

September 24, 2003

Prof. David R. Henderson


Thanks so much for inviting me here.  I’ve spoken to many audiences in my life, and some are more open-minded than others.  I have found, when I categorize the political views of past audiences, audiences that lean Republican have been more open-minded than audiences that lean Democrat, and far more open-minded than audiences that lean Green.  Of course, it’s possible that Republican audiences appear more open-minded to me I tend to agree with the Republican party on many issues.  For example, I favored all three of President Bush’s tax cuts—2001, 2002, and 2003—and I defended the latest tax cut on NPR back in June.  I favor huge cuts in government spending, regulation, and taxes, and those positions have often found favor with Republican audiences.  And my belief in cutting taxes, spending, and regulation derives directly from my belief in freedom.


Shortly after September 11, President Bush, speaking to a public school class and hearing them say what they like about America, said that what he most liked about America can be summarized in one word: freedom.  That’s what I most like about America too.  In fact, it’s why I immigrated to America: a lot of reading and a few trips down here from Canada convinced me that the America I moved to in 1972 was a freer country than the one I left, eh?  It’s also why I wrote my book, The Joy of Freedom: An Economist’s Odyssey.


I’m here today to give you a humane economist’s view of the drug war.  It’s a humane view, because I care about the humans involved.  I’ve followed this issue for 25 years, and have written about it a few times, and what I’ve found is that the drug war is one of the biggest threats to freedom in America.  That’s why I’m against the drug war, not because I want to use drugs that I don’t dare use now because they’re illegal, but because I want people, including myself, to be free to use drugs.  And more important, I’m against the drug war because a serious war on drugs turns into a serious war on other freedoms, many of which have been freedoms cherished by Republicans.


Take financial privacy.  When’s the last time you heard Ted Kennedy or any other leading Democrat defend financial privacy?  The traditional advocates of financial privacy have been Republicans.  But the war on drugs has destroyed financial privacy.  And one of the people who helped destroy it most was my favorite President of the last 75 years, Ronald Reagan.

People who engage in cash transactions of amounts of in excess of $10,000 must file forms with the federal government.  This regulation was introduced by the Reagan administration, of which I was part, in its attempt to fight the drug war.  The federal government also has wide powers to snoop in your bank account and part of the justification for these powers is that it they are needed to fight the drug war.  Although we in the United States are used to this loss of freedom, freedom from government surveillance of our financial affairs in the “land of the free” is far less than in Switzerland—no surprise—but is even less than in Canada.


Or take private property, another core idea justly celebrated by Republicans. Although the Fifth Amendment of the U.S. constitution guarantees that no person shall “be deprived of life, liberty, or property, without due process of law” and that private property shall not “be taken for public use without just compensation,” these guarantees are routinely ignored in the drug war.  Under the asset forfeiture rules, the government often seizes property that government officials simply suspect was used in a drug crime.  No one need be accused, let alone convicted, of a drug crime for the government to seize their property.  Legal scholar Steven Duke points out that in 80% or more of drug forfeitures no one is ever charged with a crime.  In one case, the simple intent to use the proceeds of a home equity loan to buy drugs, even though the person who got the loan did not use the money to buy those drugs, was grounds enough for a court to rule that the person who owned the home should lose possession of the home.[1][1]  “Entire hotels have been forfeited because one or more rooms of the hotel have been used by guests for drug transactions.”[2][2]  That’s not respect for private property.


Consider also the right to a fair trial.  Many of the rank-and-file Republicans I talk to, as well as Republican leaders like Dick Armey, have been strong advocates of this right.  Yet the drug war has carried out a fundamental assault on the right to a fair trial. In most drug prosecutions, notes Steven Duke, the trial judges do not write opinions explaining and justifying their rulings.  Therefore, the defendants in such cases rely on the appeals courts to assure that the trial was fair.  Yet, notes Duke, many appeals courts routinely uphold long criminal sentences for drug convictions.  Duke finds that there is little reason to believe that appellate judges even read the briefs brought by the defendants.  One Supreme Court justice once told Life magazine, “If it’s a dope case, I won’t even read the petition.  I ain’t giving no break to no dope dealer . . . .”[3][3]   Care to guess who that Supreme Court justice was?  PAUSE.  Thurgood Marshall.[4][4]


And, finally, what about our right to be free of government propaganda.  Take D.A.R.E. (Drug Abuse Resistance Education), funded partly by government and taught to young kids by policemen.  There’s mounting evidence that D.A.R.E. is ineffective or even perversely counterproductive.  But even if D.A.R.E. were effective, it is a form of government propaganda for children.  How does that fit in a free society?  It simply doesn’t.


In short, a serious war against drugs requires a serious war against freedom and that’s what governments at all levels are doing to us right now.

            There’s a reason the government has intruded so much in our personal lives  to fight the drug war.  The reason has to do with a simple but powerful principle in economics, the principle that both sides gain from exchange.  Remember that the drug war is fought against people who are producing, buying, and selling drugs.  All of these transactions are voluntary exchanges in which, however unwise some of us might think the participants are, both sides gain from exchange.  Therefore, both sides will want to conceal the typical exchange from the government.  This is different from many of the other criminal laws that government enforces—laws against rape, murder, theft, etc.  In all those cases, someone loses and therefore has an incentive (or, in the case of murder, the person’s friends and relatives have an incentive) to give information to the police so that the criminal can be caught and prosecuted.  But because both sides want to conceal the drug exchange, the government, to crack down effectively, is driven inexorably to intruding into people’s private lives.


The bitter irony is that most problems that people attribute to drugs are actually not due to drugs but are, in fact, due to the drug war.  I’ll mention four:


1.      The high price of drugs, which tempts many drug users to steal to support their habit.


The high price is due to the fact that the drugs are illegal and therefore suppliers, to be willing to supply, charge a risk premium.  In an article I wrote a few years ago,[5][5] I compared two exports from Colombia, both of which are drugs or contain drugs, and both of which begin with the letter “c”.  I refer to cocaine and coffee.  I estimated that if the same mark-ups applied to cocaine as to coffee, which would occur with cocaine legalization, then cocaine’s price in the United States would fall by about 97%.  No one would feel the need to steal to support a cocaine habit.


2.      The innocent people killed in the drug war crossfire.  

Because drugs are illegal and the penalties for being in the industry are very high, the illegal drug industry attracts criminals.  Competition between rival drug “firms” is often cutthroat, literally.  In the wars between these firms, many innocent people are killed.  If drugs were legal, competition would be on price, quality, and convenience, just as for any other good.  When Prohibition ended in 1933, organized crime left the liquor industry—and so did violence.

3.      People dying from overdoses or from foreign substances used to cut the drugs.


Because the drugs are illegal, no one in the business can use advertising to establish a reputation and brand name.  You can’t have a brand name for, say, cocaine, that is at all comparable to the brand name for Coca-Cola.  Therefore, there is much less incentive to provide a known quality product.


4.  Children being involved in the drug trade.


I believe that this first happened in a big way in New York state in the early 1970s, after Governor Rockefeller drastically increased the penalties for drug dealing.  Criminals then recruited teenagers because the penalties for under-age drug dealers were lighter.


A few other facts are relevant here.  Many people believe that the government turns a blind idea to marijuana, especially when it involves simple possession.  But in 1999, about 800,000 people in the United States were arrested for marijuana, 85% of them for possession, not sale, of the drug.[6][6]  Also, nearly one quarter of America’s prisoners—about 500,000 people—are behind bars for non-violent drug offenses.[7][7]  Drug sellers now often go to prison for longer periods than convicted rapists and even sometimes longer than convicted murderers.


There are, fortunately, many hopeful signs.

Although the federal government is working hard to ignore voters, voters and legislators in many states are passing medical marijuana laws that would decriminalize marijuana use for those who have a medical need for it.

The former Republican governor of New Mexico, Gary Johnson, was been forthright in his denunciation of the drug war and introduced a bill to decriminalize possession of small amounts of marijuana. California Republican Tom Campbell made his opposition to the drug war a key part of his 2000 campaign for the U.S. Senate.

Republican governors John Engler of Michigan and Governor George Pataki of New York are talking about relaxing their harsh minimum sentencing laws.

There are now at least 8 states in which voters (Alaska, California, Colorado, Maine, Nevada, Oregon, and Washington) or the legislature (Hawaii) have made it legal for patients to use medical marijuana.   

In November 2000, the Supreme Court, in City of Indianapolis et al. v. Edmond et al, found by a voted of 6-3 that random roadblocks to search for illegal drugs are unconstitutional.[8][8]  My favorite Supreme Court Justice, Clarence Thomas, dissented from the majority opinion.  There are hopeful signs in his separate dissent, however.  Justice Thomas wrote:


Taken together, our decisions in Michigan Dept. of State Police v. Sitz, 496 U. S. 444 (1990), and United States v. Martinez-Fuerte, 428 U. S. 543 (1976), stand for the proposition that suspicionless roadblock seizures are constitutionally permissible if conducted according to a plan that limits the discretion of the officers conducting the stops. I am not convinced that Sitz and Martinez-Fuerte were correctly decided. Indeed, I rather doubt that the Framers of the Fourth Amendment would have considered "reasonable" a program of indiscriminate stops of individuals not suspected of wrongdoing.

Respondents did not, however, advocate the overruling of Sitz and Martinez-Fuerte, and I am reluctant to consider such a step without the benefit of briefing and argument. For the reasons given by The Chief Justice, I believe that those cases compel upholding the program at issue here. I, therefore, join his opinion.


            In other words, Thomas believes that opponents of roadblocks do not go far enough in their opposition and gave future opponents a road map for a constitutional challenge.


            My Hoover colleague, Nobel prize winner Milton Friedman once pointed out that in the early 1930s, even though many Americans saw the problems created by Prohibition, few people expected it to end soon.  And yet, in 1933, Prohibition ended.  Similarly, although few people expect an end to the drug war, it could end as quickly as Prohibition did.  But I want us to do our bit to end it.  It will never end if we passively sit back and accept government oppression.  On the other hand, if thousands of us rise up around the country to take back our heritage of freedom from government intrusion, it just might end.  I take inspiration on this from Joell Palmer, a 21-year-old waiter at an Outback Steak House in Indianapolis.  Palmer, who was stopped at an Indiana roadblock because his 1979 black Pontiac Trans Am “fit the profile,” refused to let the police inspect his car.  They inspected it anyway.  After they failed to find drugs, Palmer didn’t just let it go.  He sued the city of Indianapolis.  The suit made it all the way to the Supreme Court, where he won, on the 6-3 decision mentioned earlier.  His words can be inspiration for us all.  Said Palmer:


I am standing up to something that I know is wrong. I am fighting for everyone’s rights—showing there actually are people who don’t let big government bully the people around.[9][9]

[10][1] . Duke, “Drug War on Constitution,” p. 5.

[11][2] . Duke, “Drug War on Constitution,” p. 6.

[12][3] . Donna Haupt and John Neary, “Justice Revealed,” Life, September 1987, p. 105.

[13][4] . Duke, “Drug War on Constitution,” p. 5.

[14][5] . David R. Henderson, “The U.S. Drug War on Latin America,” in a not-yet-titled, forthcoming book from the Hoover Institution. 

[15][6] .  Adam J. Smith and Karynn M. Fish, “How the Drug War Harms, Not Helps, Kids,” AlterNet, October 9, 2000,

[16][7] .  See Kelly Virella, “460,000 Busted for Drugs—and Counting,” AlterNet, July 27, 2000,

[17][8] .  See

[18][9] . Quoted in “Indiana LP members gets Supreme Court hearing,” Libertarian Party News, September 2000,


[1][1] . Duke, “Drug War on Constitution,” p. 5.

[2][2] . Duke, “Drug War on Constitution,” p. 6.

[3][3] . Donna Haupt and John Neary, “Justice Revealed,” Life, September 1987, p. 105.

[4][4] . Duke, “Drug War on Constitution,” p. 5.

[5][5] . David R. Henderson, “The U.S. Drug War on Latin America,” in a not-yet-titled, forthcoming book from the Hoover Institution. 

[6][6] .  Adam J. Smith and Karynn M. Fish, “How the Drug War Harms, Not Helps, Kids,” AlterNet, October 9, 2000,

[7][7] .  See Kelly Virella, “460,000 Busted for Drugs—and Counting,” AlterNet, July 27, 2000,

[8][8] .  See

[9][9] . Quoted in “Indiana LP members gets Supreme Court hearing,” Libertarian Party News, September 2000,