Tag: prohibition

Happy Repeal Day!

Today is a great day for freedom. On this day in 1933, the 21st Amendment was ratified, thus repealing Prohibition. My former colleague Brandon Arnold wrote about it a few years ago:

Prohibition isn’t a subject that should be studied by historians alone, as this failed experiment continues to have a significant impact on our nation.

Groups like the Women’s Christian Temperance Union, a key force in the passage of Prohibition, survive to this day and continue to insist that Prohibition was a success and advocate for dry laws.

Prohibition-era state laws, many of which are still on the books today, created government-protected monopolies for alcohol distributors. These laws have survived for three-quarters of a century because of powerful, rent-seeking interest groups, despite the fact that they significantly raise costs and limit consumer options. And because of these distribution laws, it is illegal for millions of Americans to have wine shipped directly to their door.

The website RepealDay.org urges celebrations of the “return to the rich traditions of craft fermentation and distillation, the legitimacy of the American bartender as a contributor to the culinary arts, and the responsible enjoyment of alcohol as a sacred social custom.” It’s easy! You don’t have to hold a party. Just go to a bar or liquor store and have a drink.

RepealDay.org says that “No other holiday celebrates the laws that guarantee our rights.” I think that’s going too far. Constitution Day and Bill of Rights Day do exactly that. And in my view, so does Independence Day. But that’s quibbling. Today we celebrate the repeal of a bad law. A toast to that!

Cato celebrated the 75th anniversary of repeal with this policy forum featuring Michael Lerner, author of Dry Manhattan: Prohibition in New York City; Glen Whitman, author of Strange Brew: Alcohol and Government Monopoly; Asheesh Agarwal, Former Assistant Director of the Federal Trade Commission’s Office of Policy Planning; and Radley Balko, Senior Editor, Reason.

First They Came for My Coke, Then They Came for My Jack

Not satisfied with hounding smokers and purveyors of Big Gulp sodas – or even gun manufacturers – nanny-staters have reached way back into their historical toolkits to go after alcohol. That’s right, in this the 80th year since the repeal of Prohibition, a new coalition has arisen to take on the scourge of demon rum.

But these aren’t your great-granddaddy’s Baptists and bootleggers; instead we have a transnational alliance of “public health professionals” out to make the world a more sober place.  Not satisfied with the persuasiveness of their entreaties, however, they further want to muzzle alcohol producers and anyone else with a “stake” in the debate.  (Apparently limiting the freedom to drink isn’t enough for these people; the freedom of speech and to petition the government for redress of grievances are also suspect.)

Here’s Exhibit A, a “statement of concern” put out in February by a group of public health advocates calling themselves the Global Alcohol Policy Alliance.  In a nutshell, GAPA doesn’t like the fact that the beverage alcohol industry is involved in the debate on how to reduce alcohol abuse, not even the commitments that 13 of the largest alcohol producers made in support of the World Health Organization’s “Global Strategy to Reduce the Harmful Use of Alcohol.  The most revealing “reservation” the GAPA-niks have is item 3 on page 3:

Prior initiatives advanced by the alcohol industry as contributions to the WHO Global Strategy have major limitations from a public health perspective …

That sounds rather innocuous – an academic disagreement about alcohol policy – but let me put this in context.  The public health community consistently advocates “population-based” controls that simply seek to reduce total alcohol consumption, regardless of whether alcohol abuse declines.  There could be cirrhotic ne’er-do-wells dying in the streets, but as long as yuppies buy less Jack Daniel’s, all is fine.  The alcohol industry, or anyone that cares about actually fixing social problems rather than taking steps that at best just make politicians feel good – call it the inverse Baptists/bootleggers – prefers a targeted approach: keep booze away from kids, get alcoholics treatment, don’t drink bad moonshine that’ll make you go blind, etc.

A Look at the OAS Report on Drug Policy in the Americas

Last Friday, the Organization of American States released a groundbreaking report on the future of drug policy in the Americas. The OAS received the mandate to produce this document at the Summit of the Americas last year in Cartagena, Colombia, where some presidents aired their frustration with the war on drugs and even suggested legalization as an alternative to fight the cartels.  

The document is based on solid premises:

  1. Drug violence is one of the greatest challenges facing the Americas
  2. The current approach is a failure isn’t working
  3. New policy alternatives need to be discussed and implemented
  4. Drug use will remain significant by 2025

These premises might seem pretty obvious, but when it comes to drug policy, stating the obvious hasn’t been the norm for those who believe in the status quo: for example, in 1988 the UN held an event titled “A drug-free world: we can do it” (consumption of marijuana and cocaine has increased by 50 percent since then). Or the latest National Drug Control Strategy, which claims that the greatest accomplishment of the Mérida Initiative with Mexico has been “the mutual fostering of security, protection and prosperity” (never mind the 60,000 people killed in drug violence in six years in Mexico).

The OAS report avoids recounting this fairy tale. It also avoids making recommendations, given the lack of consensus among its authors about where drug policy should be headed in the next 12 years. Instead, the document lays out four different interpretations of the “drug problem” and presents the scenarios of what the response should be. The report also presents the challenges facing each scenario (name in bold):

Together: Under this scenario, the problem is not drug laws but weak institutions. It foresees greater security and intelligence cooperation among nations, more expenditure in the security and judiciary apparatuses and tougher laws dealing with corruption, gun trafficking and money laundering.

Latin American countries indeed suffer from weak institutions. The shortcoming of this scenario is that prohibition actually exacerbates the problem since it inflates the profit margins of the cartels to stratospheric levels, thus increasing their corrupting and violent power. In 2010 all seven Central American countries combined spent nearly $4 billion in their security and judiciary apparatuses (a 60 percent increase in five years). And yet that fell terribly short of the estimated revenues of the Mexican and Colombian cartels which, according to a report from the Justice Department, could reach up to $39 billion a year.

The report foresees another challenge with this approach: a disparity among countries in their institution-building efforts, which would lead to the balloon effect of criminal activities. This is perhaps the main feature of the drug business in the Americas: its high capacity to adapt to changing circumstances. For example, in the early 1990s, as pressure grew on coca growers in Peru they moved to Colombia. Now, after a decade of eradication programs in that nation, they are moving back to Peru. Overall the Andean region continues to produce the same amount of cocaine as it did 20 years ago.

Over the years the common denominator of the war on drugs in Latin America has been the attempt to export the problem to your neighbor. Greater cooperation, harmonization of efforts, and same-pace institution building seems unrealistic.

Chris Christie Allows New Jerseyans to Quaff Better Wine

While perhaps more identified with eating than drinking, New Jersey Governor Chris Christie – who headlined Cato’s recent Milton Friedman Prize Dinner – signed a law in January that allowed out-of-state winemakers to sell directly to in-state consumers and retailers.  This wasn’t a spontaneous bit of New Year’s bonhomie – the U.S. Court of Appeals for the Third Circuit had ruled in Freeman v. Corzine that the previous rules benefiting in-state wineries was unconstitutional (that pesky Commerce Clause again) – but still it was a positive sign: even Wine Spectator took note.

More importantly, the district judge in charge of the nine-year lawsuit challenging that earlier law recently approved the consent decree whereby New Jersey’s new law remedied the claims brought by the out-of-state wineries.  The agreement creates an out-of-state plenary winery license (good luck saying that after having consumed too much of the the vintage) under which “foreign” wine can compete on an equal playing field with good ol’ New Jersey stock.  Specifically, the new law grants this license to out-of-state applicants, including those who sell their wares over the internet, who do not produce more than 250,000 gallons of wine per year and are duly licensed in another state.

The upshot is that the new law takes effect as of this month.

This all still seems like a bit too much regulation to me, but at least everyone is now subject to the same rules.  I may have to take advantage of this newfound freedom when I travel up to the Garden State for my college reunion in a few weeks.

For my previous writings on booze and the Commerce Clause, read this and listen to this.

More Pyrrhic Victories in Mexico’s Drug War

The New York Times reports today that Mexican authorities have arrested a major operative of the Sinaloa Cartel, adding to a string of significant blows against Mexico’s most important drug organization. The Felipe Calderón administration now boasts that since 2009, it has arrested or killed 22 of the 39 most important drug kingpins.

Is this significant? Not according to official documents of the U.S. government. The Office of Intelligence and Operations Coordination of the Custom and Border Protection agency looked at drug seizure data from January 2009 to January 2010 and matched it with the arrest or death of drug operatives (11 capos in total). It found that “there is no perceptible pattern that correlates either a decrease or increase in drug seizures due to the removal of key DTO [drug trafficking organization] personnel.”

And, as the latest National Drug Threat Assessment report by the Justice Department puts it, “The overall availability of illicit drugs in the United States is increasing. Heroin, marijuana, MDMA [ecstasy], and methamphetamine are readily available, and their availability appears to be increasing in some markets.” [p. 24]

The truth is that for every drug kingpin arrested or killed, there are many others waiting to take his job. As long as there is demand for drugs in the United States, there will be a supply. The question is whether that business should be in the hands of legal entrepreneurs—as in the alcohol and tobacco industries—or in the hands of violent criminals.

Border Security, the War on Drugs, and the 2012 GOP Presidential Race

The issue of border security has made its way into the 2012 GOP presidential race and candidates are jockeying to separate themselves from the pack. The topic garnered some attention at the Republican national security debate on November 22. An Associated Press story today examines the candidate’s platforms on the topic and as the title implies, rightly concludes securing the border is impossible. I am quoted in the article and make exactly that point:

Mitt Romney and Newt Gingrich have promised to complete a nearly 1,950-mile fence. Michele Bachmann wants a double fence. Ron Paul pledges to secure the nation’s southern border by any means necessary, and Rick Perry says he can secure it without a fence — and do so within a year of taking office as president.

But a border that is sealed off to all illegal immigrants and drugs flowing north is a promise none of them could keep.

“Securing the border is a wonderful slogan, but that’s pretty much all it is,” said Ted Galen Carpenter, a senior fellow at the libertarian Cato Institute. “Even to come close would require measures that would make legal commerce with Mexico impossible. That’s an enormous price for what would still be a very leaky system.”

The bottom line is the border is simply too big to control. Attempting to fully police the border must pass a simple cost-benefit analysis, and it is not clear that our current policy passes that test. And yet, the candidates all agree securing the border is necessary to combat terrorism, illegal immigration, and drug violence stemming from Mexico.

The candidates have little reason to reexamine that assumption. Not only is it politically advantageous to call for securing the border, but it is a convenient one-size-fits-all solution to those three broader policy issues. They have calculated that this is what voters want to hear.

But it is an illusory solution. Laws protecting the border must exist and be enforced, but it is not clear that this alone, even if done more effectively or efficiently, will prevent terrorists or illegal immigrants from entering the United States. And the “securing the border” panacea certainly will not end the flow of drugs into the United States.

Curiously, while the GOP candidates all express worries about terrorism and illegal immigration, the subject of the war on drugs has hardly been discussed.  Although drug violence in Mexico is the only major security problem the Untied States faces on any of its borders, the issue has not produced serious consideration thus far.  Rep. Ron Paul (R-TX) has been the only candidate to offer a thoughtful, consistent approach the issue, calling for an end to the failed policy.

The candidates should be pressured to answer why Washington continues to spend billions of dollars to wage the war on drugs each year with little to show for it. The power of the drug cartels has reached the point that the Mexican government no longer controls some areas of the country. And there are worrying signs that the violence is beginning to bleed across the border into the United States.

Our prohibitionist efforts have failed and a new policy is needed. Only by removing the lucrative black-market drug trade and thus effectively defunding the Mexican drug cartels can we begin to end the violence and illegal activity that plagues Mexico and the southern U.S. border region.

That is the substantive discussion that should be taking place in the GOP debates, rather than the posturing and repeated faux policy prescriptions to secure the border.

Reefer Madness Here and Abroad

In the New York Times, Ethan Nadelmann takes aim at the “reefer madness” of the Obama administration, which despite promises and expectations has stepped up the war on marijuana:

But over the past year, federal authorities appear to have done everything in their power to undermine state and local regulation of medical marijuana and to create uncertainty, fear and confusion among those in the industry. The president needs to reassert himself to ensure that his original policy is implemented.

The Treasury Department has forced banks to close accounts of medical marijuana businesses operating legally under state law. The Internal Revenue Service has required dispensary owners to pay punitive taxes required of no other businesses. The Bureau of Alcohol, Tobacco, Firearms and Explosives recently ruled that state-sanctioned medical marijuana patients can not purchase firearms.

United States attorneys have also sent letters to local officials, coinciding with the adoption or implementation of state medical marijuana regulatory legislation, stressing their authority to prosecute all marijuana offenses. Prosecutors have threatened to seize the property of landlords and put them behind bars for renting to marijuana dispensaries. The United States attorney in San Diego, Laura E. Duffy, has promised to start targeting media outlets that run dispensaries’ ads.

President Obama has not publicly announced a shift in his views on medical marijuana, but his administration seems to be declaring one by fiat.

As bad as the drug war is in the United States, it’s wreaking far more havoc in Mexico and Latin America. That’s why the Cato Institute is holding an all-day conference next week, “Ending the War on Drugs,” featuring:

  • the former president of Brazil
  • the former drug czar of India
  • the former foreign minister of Mexico
  • the author of Cato’s study on decriminalization in Portugal
  • the Speaker of the House in Uruguay
  • plus video presentations by former Secretary of State George Shultz and former Mexican President Vicente Fox.

Check it out. And be there November 15.

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