For a business magnate, Donald Trump is surprisingly ignorant about basic economics.
Back in August of this year, he was offered a copy of Henry Hazlitt’s Economics in One Lesson and he would have done well to take a look at what it had to say. The missed opportunity to educate himself on the subject is particularly painful now that Trump is trying to apply his economic ignorance to tackle the country’s opioid crisis.
Just last week, the President called on the Chinese government to apply the death penalty against distributors of Fentanyl, a dangerous opioid drug, because “the results will be incredible!”
America, this is not going to end well…
Governments have been trying to reduce the social harm of opioids by restricting their supply since at least 1729 when the Emperor of China issued his first decree against opium. This did not go well for the Chinese, giving rise to a highly profitable business of opium smuggling and culminating in the disastrous Opium Wars of the late 19th century.
The results have been similar in the modern war on drugs, which America has been waging for more than 100 years. Despite the federal government’s best efforts to protect public health by restricting the supply of opioids, marijuana, LSD, cocaine etc, it has been largely ineffective. Prohibition has consistently failed throughout history–and if you understand the economics of supply and demand, it’s obvious why.
The Basics of Supply and Demand
At the core of supply and demand are prices. Prices provide everyone in the market with vital information. They’re a signal to producers, telling them how to satisfy consumers and what obstacles there are to overcome.
When something as common as toilet paper becomes scarce, prices rise. The higher price prompts producers to act: new suppliers move into the market, lured by the high prices and an opportunity to undercut the competition. As supply increases, prices fall.
Market pricing mechanisms ensure that shortages are temporary and supplies of goods are available. This, however, only works in a free market. When the government intervenes, supply and demand are prevented from finding equilibrium, leading prices to stay artificially high or low.
So what happens when the government tries to restrict the supply of drugs like Fentanyl?
The Economics of Prohibition
Prices will rise. There will be a greater incentive to smuggle Fentanyl (and the even more dangerous drug Carfentanil) into the United States. And with so much money to be made, there will also be a greater incentive to divert narcotics from medical supplies in the U.S.
Narcotics obey the same rules of any other goods: the higher the price goes, the harder the suppliers work.
On the buyer’s side, there are severe consequences as well. Someone who is truly addicted to a drug is typically willing to pay for it at any cost. As prices rise, addicts often take even more desperate measures to obtain the drugs–even if it means turning crime.
How to Solve the Opioid Crisis
Instead of prohibition, we need to legalize the sale of opioids that are the least likely to kill people. This will provide addicts with less deadly and less costly alternatives to Fentanyl such as low potency opioids like oxycodone IR, hydrocodone, or buprenorphine.
We must be realistic. If people are going to take harmful drugs, the best course of action is to make the market and consumption of these drugs the least harmful. Legalizing these drugs for over-the-counter will reduce overdose deaths. By eliminating covert distribution and administration of drugs, HIV infections will fall as will hospital admissions for cellulitis and endocarditis. Billions of dollars and tens of thousands of lives will be saved.
Without the cruel and unwise policy of prohibition, fewer people will die because they won’t have to use unsafe means to get high. It’s literally the difference between choosing a simple Percocet tablet or a dirty heroin needle. Prohibition pushes people towards the dirty heroin needle.
For centuries, governments have been trying to protect the public by restricting the supply of opioids and with no positive results. They’re doing the same today by pressuring doctors, sending militarized police to bust down doors, and begging foreign regimes to execute people. Instead of saving people through prohibition they are spreading death and destruction.
Coercion is deadly and immoral. To help fight the ongoing opioid crisis, let’s try freedom.
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