An Economist's Cautionary Note on Free Trade

Among most economists (among whom I count myself as one), free trade is a pretty strongly favoured policy.

The reasons for this are fairly good, and fairly straightforward, in the standard case for free trade.

Under the standard theory, the main basis for the benefits of free trade is comparative advantage. If Australia is relatively more efficient in producing iron ore (that is, if it has a comparative advantage in iron ore), and China is more efficient at producing manufactured goods, then at the country level both Australia and China are better off if Australia specialises in iron ore, China specialises in manufactured goods, and the two countries trade with each other. Then both countries are able to obtain more consumption of each good than they would alone, given whatever initial resources they have. This is an economic benefit, understood since David Ricardo wrote about it in 1817.

If one thinks of the economic units in terms of countries, free trade between China and Australia is Pareto improving. Both countries are made better off, and no one (in this limited model) is made worse off. This is the Holy Grail of economic policy. The optimal level of tariffs is thus zero, as restrictions on free trade harm both countries.

But if one thinks instead at the level of individuals within a country, then free trade is no longer Pareto improving relative to tariffs. In the example above, if I'm a worker in an Australian manufacturing firm which was previously protected by tariffs, and these get eliminated, then I really do get screwed. It's not just complaining - as my firm goes broke, I lose my job, and the previous skills I have are no longer economically useful in my country. Even if I get another job, I likely will have a lower future wage for quite a while, if not permanently.

The steel workers in Ohio complaining about free trade aren't just making it up. Things really did get a lot crappier when tariffs were eliminated.

But economics has an answer here. Free trade isn't Pareto improving, but it is Kaldor Hicks improving. In other words, the total gains to the economy are sufficiently large that the beneficiaries could organise a transfer payment to those who lost their jobs which would made the Ohio steel workers also better off. 

As a matter of political economy, this transfer doesn't actually happen. You'd have to pay the losers from free trade a very large sum of money if they have to transition to years of unemployment, or a permanently lower future income. 

Of course, this isn't really a problem of economics, more just politics. Is it the economist's fault that his prescriptions don't get followed?

So much for the standard theory. It's actually pretty good, as far as it goes. Like good economic proofs, it flows from assumptions to conclusions. If it's wrong, it's because there's something in the model that's being left out, or one of the assumptions is questionable.

There are a number of possible extensions one can make, like depreciating human capital. But to me, it's the base assumptions that are the most interesting. What are they?

We have the following:

1. Consumption is a good. You're better off consuming more goods and services than fewer goods and services, all else equal.

2a. Leisure is a good, or equivalently

or 

2b. Work is a bad.

In other words, for any given level of consumption, you'd rather work less than work more. 

These are not terrible assumptions. #1 seems probably true. You may hit a point of satiation with consumption, but over most ranges of wealth that people operate on, having more stuff beats having less stuff, unless the stuff poses other costs (like screwing up your children, in which case all else isn't equal).

But what about #2?

Going from a 14 hour work day to a 10 hour work day, with the same wages and consumption, is surely an improvement in welfare.

Going from a 10 hour work day to a 6 hour work day, with the same wages and consumption, is also almost surely an improvement in welfare. 

But the big question is the following: is it still an improvement in welfare to go from a 6 hour work day, to a zero hour work day in perpetuity?

In other words, if your consumption stayed exactly the same, would you prefer to have some sort of job, or no job, ever?

You may think work sucks, but be careful what you wish for.

What if it turns out that people actually need some sense of purpose, some reason to get up in the morning?

Admittedly, having a job isn't always a fun purpose. But it's a structure, and a discipline, and a set of people you can interact with, and a routine that, if it works well, results in the satisfaction of providing for yourself.

What would life look like if you had basic consumption needs provided for you, no strings attached, without any need to work?

Well, as it turns out, we have many decades of data on that question. They're on display in a housing estate or ghetto near you. And the results ain't pretty. Ask Theodore Dalrymple, who wrote about this extensively: 

Every few months, doctors from countries like the Philippines and India arrive fresh from the airport to work for a year's stint at my hospital. It is fascinating to observe their evolving response to British squalor.

At the start, they are uniformly enthusiastic about the care that we unsparingly and unhesitatingly give to everyone, regardless of economic status. For a couple of weeks, they think this all represents the acme of civilization, especially when they recall the horrors at home. Poverty—as they know it— has been abolished.

Before very long, though, they start to feel a vague unease. A Filipina doctor, for example, asked me why so few people seemed grateful for what was done for them. What prompted her question was an addict who, having collapsed from an accidental overdose of heroin, was brought to our hospital. He required intensive care to revive him, with doctors and nurses tending him all night. His first words to the doctor when he suddenly regained consciousness were, "Get me a fucking roll-up" (a hand-rolled cigarette). His imperious rudeness didn't arise from mere confusion: he continued to treat the staff as if they had kidnapped him and held him in the hospital against his will to perform experiments upon him. "Get me the fuck out of here!" 

My doctors from Bombay, Madras, or Manila observe this kind of conduct open- mouthed. At first they assume that the cases they see are a statistical quirk, a kind of sampling error, and that given time they will encounter a better, more representative cross section of the population. Gradually, however, it dawns upon them that what they have seen is representative. When every benefit received is a right, there is no place for good manners, let alone for gratitude.

By the end of three months my doctors have, without exception, reversed their original opinion that the welfare state, as exemplified by England, represents the acme of civilization. On the contrary, they see it now as creating a miasma of subsidized apathy that blights the lives of its supposed beneficiaries. They come to realize that a system of welfare that makes no moral judgments in allocating economic rewards promotes antisocial egotism. The spiritual impoverishment of the population seems to them worse than anything they have ever known in their own countries. And what they see is all the worse, of course, because it should be so much better. The wealth that enables everyone effortlessly to have enough food should be liberating, not imprisoning. Instead, it has created a large caste of people for whom life is, in effect, a limbo in which they have nothing to hope for and nothing to fear, nothing to gain and nothing to lose. It is a life emptied of meaning.

"On the whole," said one Filipino doctor to me, "life is preferable in the slums of Manila." He said it without any illusions as to the quality of life in Manila.

I skipped the most striking descriptions of the problem, because if I started, I'd end up quoting the whole thing. Read it all, if you haven't before.

A question, dear reader.

Do you think the problems of the people described above stem from a lack of consumption? They don't have to do any work, so in a standard model, the only problem left is that they must be consuming too little.

Suppose that Dalrymple is describing his subjects in the above article honestly, and you have two policy choices to consider for the above recipients.

Option A - Increase their welfare payments by 50%

Option B - Find them a not unpleasant job for 6 hours per day, and require them to do honest work in order to receive the same welfare payments as before.

Which of these two policies would result in a larger improvement in human welfare for such people?

In the standard model, the answer is obvious. Given our assumptions, Option A is far preferable. Do you believe that?

Would it change your mind to find out that lower class whites in America (especially in rust belt parts of the US that have been worst hit by job losses from free trade) in recent decades have been so despondent that their life expectancy has actually been dropping as they kill themselves with alcohol, opiates, and suicide?

The standard answer to this is that we have an opiate problem. And a drinking problem. These are "substance abuse" issues. But why now? Alcohol was always there. Why is it only now that people decide there is no other purpose or hope in their lives, and start drinking themselves to death?

To turn these concerns back into the language of economics, the Holmes conjecture is that if leisure is not always a good, and work is not always a bad, then it is no longer obvious that the optimal level of tariffs is zero.

Sometimes, you might prefer to have some restrictions on trade in order to keep jobs in America.

But you have to be honest about why you're doing this.

Targeted tariffs won't raise consumption. They won't spur economic growth. They will lead to more expensive goods, and less consumption. David Ricardo was right on all that. Comparative advantage still exists, and be very wary of anyone who talks about free trade without acknowledging this.

But they might also lead to more employment. And this may well be worth it in terms of the quantity that the economist's social planner is meant to care about, namely total welfare.

It might lead to fewer rust belt whites killing themselves with opiates, because their communities are totally hollowed out with everybody sitting around on welfare without any purpose in their lives.

If steel products cost slightly more as a result, personally that doesn't strike me as the end of the world.

Of course, this is a cautionary note, not a case for tariffs-a-go-go. To say that the optimal level is not zero does not imply that the optimal levels is high, or across-the-board. And it's also not clear that tariffs versus free trade is the only solution to this, or even the best one.

I personally think that automation is a much bigger worry in this regard than free trade. I have similar questions about automation, which also doesn't strike me as everywhere and always welfare improving.

These aren't straightforward questions. If you ban the automobile, we get stuck with horses and carts forever.

And yet... and yet...

The Deaton and Case finding seems to me to be one of the most important findings in social science in recent years, and portends an enormous and growing problem. There are lots of workers who simply do not seem to be economically useful anymore, and in communities where lots of these people have ended up on welfare as a result of the endless grind towards replacement by robots, life is purposeless and miserable.

There are many other purposes that can be fostered - community, charity, art, religion, family.

But until we have a handle on how to solve the torrent of lives being sucked into the abyss of misery, as large as the AIDS epidemic, I remain open to a range of different policies in response.

At the Rescue Mission

Poverty, to an economist, is mostly an abstract matter. Just like GDP is a number and unemployment is a number, the poverty rate is also mostly thought of as a number. It’s a very important number, and one that we work hard to try to reduce. But the essential nature of the task is mostly thought of as a technical problem to be solved, like a constrained optimisation – consider the variable to be minimised and the policy variables that can be altered to achieve this, check that the Lagrange multipliers on all the constraints are satisfied, check the second order condition to make sure you haven’t found a maximum instead of a minimum etc. Out comes optimal policy.

But real poverty, when you see it up close and in the flesh, is raw and visceral.  It is shocking, in fact. This may sound melodramatic, but bear with me. Like anyone living in a large US city, I see poverty mostly in the form of the shambling figures of the homeless walking around downtown areas. But they tend to feature as the Banquo’s Ghost at the fringes of whatever otherwise pleasant social function I’m attending, or the nice area of town I’m walking around in. They are, in other words, an aberration – the puzzling exceptions left behind in the sea of prosperity.

No, to actually see what abject indigence looks like at the coal face, one must venture to where poverty is not the exception, but the norm. I was at a homeless rescue mission the other day, with an out of town friend of mine. His family was dropping off a large order of dinner for Thanksgiving and helping out in the serving. If I had not been spending the day with him, I would never in a million years have headed there.

They say that one of the important things that you are taught in the Marines is to overcome one’s instinct to run away from the sound of gunfire. Everyone has this instinct, but to an army, it is disastrous. A soldier must run towards the gunfire. In a less dramatic way, driving into the really poor part of town is like that. The onset of tent cities and strung out hoboes on the street is mostly experienced in life as a sensation that a) one has wandered into the wrong part of town, b) one should change routes, if possible, and c) a back of the mind feeling of hoping one’s car does not break down. Driving to the mission, in this metaphor, is the equivalent of having left the greenzone altogether and heading for the Fallujah of poverty. Of course, everyone else in the car has done this before and is relatively at ease – it’s only me seeing it for the first time.

Both in the car, and when I arrived inside the mission, we are the exception. Dysfunction is the norm, and the norm is all around us. To someone who generally associates homelessness with either drug use and/or mental illness, it is initially quite disconcerting to experience the sensation of being vastly outnumbered by the homeless. The instinct for self-preservation battles with the obvious cowardice and shame that such feelings generate. This is not a hostile army, and everyone here ought to be an object of pity. But the law of large numbers holds nonetheless – how many unstable people can one have in a room before the left tail of outcomes becomes dangerous? And yet here is this 5’4 blonde lady smiling and greeting me, seemingly unconcerned.

And, of course, it isn’t actually that bad, just unfamiliar. When we ascend the levels to meet people who have successfully gone through the programs to get their lives back on track, they seem relatively normal. We meet a man who is studying for a computer degree, and tells us he’s now been clean for 15 months. It’s really quite heartening. A lot of the people at the mission will only be in and out of the ‘emergency food’ section, where assistance is given without any questions. But for the ones that are trying to get their life back on track, I’m very glad to see that there are programs ready to help them.

The other fact that becomes very apparent is the reason the whole enterprise exists, evident from the signs on the walls and the people helping out at the center. The rescue mission is not staffed by economists or government social workers. It is staffed by Christian volunteers, as the various posters on the wall and the Chaplain in charge indicate. I am not a Christian, but I am glad they are there, toiling away at this kind of thankless task. If one ever needed a reminder that Christianity is not the problem with America, this was one. It motivates genuine selfless charity in a way that the default of consumerist secular humanism simply does not achieve. Of course, even the selfless often have personal reasons for being there. My friend’s brother in law ended up becoming very involved in the mission and donating a lot of money there after his own brother, who had been a drug addict, went through their program. The homeless live at the outskirts of society, and are easy to just look past, unless you have a particular reason to seek them out.

I drive back in the car, having mostly just been a silent observer during my time there. Going from the relative function of the program graduates back to the chaos of the tent cities outside, blending back into relieving normal society, reinforces the scope of the problem. How did all this happen? And was it always thus? George Orwell wrote of the tramps in ‘Down and Out in Paris and London’, and Dickens wrote of it even earlier. From talking with my friend’s sister, my preconception that a lot of the problem was mental illness is apparently overstated – a lot more of it, according to her, is just substance abuse. Some of the people who seem crazy actually just need to dry out, and they’re hallucinating at the moment.

It is tempting to see tent cities seem like an enormous failure of governance, and there is definitely a decent amount of truth to this. Whether the failure is a lack of money and support or a lack of police presence is a matter upon which people will disagree wildly, but the unsatisfactory nature of the status quo is hard to ignore.

Unfortunately, the narcissism of our age mistakes the feeling that ‘something ought to be done’ for the belief that as long as we vote for the right person (whoever that is) the problem will resolve itself. But does anyone really know how you deal with whatever it is that makes people start taking meth? Especially when they took it up even after seeing other meth addicts losing their teeth and turning into barely living skeletons (and then non-living corpses).

The lazy but satisfying response is outrage – substitute the feeling of pity and disgust for one of anger at some political force that is deemed to be responsible. Insufficient money. Lack of institutionalization of the mentally ill. Greater funding for substance abuse treatment. Stronger police action against vagrancy. Pick your chosen policy. They all make great soundbites and feel satisfying, but when you drive past the tent cities outside the rescue mission (and not for lack of space at the missions, either), it becomes apparent that there are a large number of real people in front of you who cannot find a reason in their life to stop taking self-destructive quantities of mind-altering substances, and this is actually an extraordinarily difficult problem to solve.

After all the policies are proposed, and some are even tried, few people today will tell you what was once considered received wisdom – the poor you will always have with you. When society as a whole was poorer, it used to be easier to convince ourselves that economic growth would take care of the problem. But it turns out the Biblical observation was wiser than we knew. If only the problem were just money. Money, we have now have substantial amounts of. What we do not have is a way to give purpose to the lives of those at the bottom of society. And if we have gotten any closer to solving the problem in the past few decades of growth, it is hard to see it.

I come here not to bury the Silk Road, but to praise it.

Two days ago, the Feds finally shut down the Silk Road, the online marketplace for drugs, guns, hitmen and other miscellaneous highly illegal items. They arrested a man, Ross William Ulbricht, alleged to be the founder of the site. He went under the alias 'The Dread Pirate Roberts'. This name is taken from the movie 'The Princess Bride', and is actually a pretty excellent alias given the nature of his work:

A pirate of near-mythical reputation, the Dread Pirate Roberts is feared across the seven seas for his ruthlessness and swordfighting prowess, and is well known for taking no prisoners.

It is revealed during the course of the story that Roberts is not one man, but a series of individuals who periodically pass the name and reputation to a chosen successor. Everyone except the successor and the former Roberts is then released at a convenient port, and a new crew is hired. The former Roberts stays aboard as first mate, referring to his successor as "Captain Roberts", and thereby establishing the new Roberts' persona. After the crew is convinced, the former Roberts leaves the ship and retires on his earnings.

If you believe the allegations about Ulbricht contained in the various affadivits, he is (to quote Stephen Hawking's memorable description of Sir Isaac Newton), by all accounts, not a pleasant man. He allegedly tried to organize not one but two attempted murders - first of a former employee that was likely to squeal to the FBI, and second of a person trying to blackmail him by threatening to release information about Silk Road drug suppliers.

(As a side note, the latter reminds me of the Morgan Freeman quip in The Dark Knight):

Let me get this straight. You think that your client, one of the wealthiest, most powerful men in the world, is secretly a vigilante who spends his nights beating criminals to a pulp with his bare hands; and your plan, is to blackmail this person? Good luck.

So it's not hard to see what's ugly and destructive about the Silk Road. Having never been interested in purchasing drugs, murder-for-hire services, guns, or anything else on the site, I had no interest in its continuation. To the extent that the world would be better off with fewer murders and illegal guns (and probably with fewer drugs as well), it's a good thing that it's gone.

But let's just pause for a moment and appreciate what a truly astonishing feat of engineering and business the Dread Pirate Roberts was able to pull off. 

This was a website that let you buy drugs off the internet and ship them to your house via the postal service. 

It did this with remarkable success, facilitating more than a million transactions between strangers. Estimates of its revenues are as high as $1.2 billion, with commissions of almost $80 million.

That's a pretty darn serious business operation right there. How many celebrated startups ever generate revenues of $1.2 billion in their first two years? Or ever?

And think about the constraints the business was operating under. 

As I wrote about in March, anonymous drug sales over the internet have perhaps the steepest challenges of information asymmetry and moral hazard of any market I can imagine. How do you stop people shipping grass clippings instead of marijuana? Or ensure that customers pay when shipments may not arrive? Or convince people to give out their postal address to strangers when ordering drugs online, not knowing whether they're sending it to a federal agent?

Here's a great essay on how they managed to solve these problems. But suffice to say, it's pretty impressive. 

This is also a business that's going to be incredibly difficult to get off the ground in the first place. Suppose you're the chief of marketing for an online drugs site. How exactly are you going to run your campaign? You can't call up Saatchi and Saatchi and arrange a billboard campaign paid from the company checking account. And who do you even contact for customer and supplier outreach? Drug sellers are somewhat cagey about putting their email addresses up to be contacted. Even if the idea of an online drug marketplace seems feasible once it's already going, it would be a nightmare trying to get it started.

What about other challenges from the business environment? If you're creating your hypothetical startup, making the AirBnB of self storage, or the Dropbox of the pets world or whatever, you might get competitors trying to undercut you, or unpredictable shifts in the regulatory environment that make it hard to compete. 

Here, you have every law enforcement agency in the world furious at your existence, sparing no expense to try to hunt you down. You need to run the entire business while being completely anonymous. Remember, this whole site was operating within plain sight of the FBI for over two years. Charles Schumer complained about it back in June 2011. The continued existence of the Silk Road was a massive embarrassment to the US Government, and hell hath no fury like the US Government scorned.

I'll say this - you don't need to like drugs at all to recognise that the Dread Pirate Roberts was a God damn genius. I wish he'd turned his efforts to something more socially useful than selling drugs online. But be that as it may, the Silk Road is one of the most remarkable startup stories in the history of the internet.

(previous Silk Road discussion here)

George Akerlof ain't got nothing on the Silk Road

There was this great piece on Hacker News a little while ago on the Silk Road. Apparently it's possible to buy drugs over the internet using BitCoins, and get them shipped to you in the mail.

No, really.

There are so many great aspects to this story.

It's hysterical that this guy is so confident in the completely shambolic level of drug enforcement that he's willing to post them to his own address in his own name. The standard defence is that you might be able to claim that the drugs were sent to you by some enemy or nasty ex-girlfriend.

I dunno. This strikes me as one of those cases where people confuse the statement 'I won't be able to be proved guilty beyond a reasonable doubt' with 'I can come up with some bizarre cock and bull story about how my enemy wanted to punish me by sending me a hundred ecstasy tablets'. Yeah, that'll teach him! Eat ecstasy, loser!

The forgotten part in all this is that you've got to stand up in front of a jury of 12 ordinary men and women and convince them that this is actually a serious possibility. You got sent a pound of marijuana by an enemy, you say? Which one? Which girlfriend? Let's get her on the stand! What's that? She's now testifying that you guys broke up because she got tired of the fact that you were always smoking marijuana? And she decided to punish you by shipping you some marijuana, not tipping off the police or the post office, and just waiting for a random drug screening dog to sniff out the package?

Yeeeaah. If I were your lawyer, I'd advise you to take the plea bargain.

In addition, the guy is willing to buy adderall online, under the assumption that they don't bother screening for this stuff anyway, and then write about his experiences and post it on the internet. That takes some stones. Given they lock up doctors for prescribing too many painkillers, I can't say I'd share the author's insouciance about the reasonableness of drug enforcement policies.

More importantly, what a remarkable market has sprung up that despite all the enormous potential market for lemons problems, the guy actually reliably got the drugs shipped to his house multiple times. By anonymous strangers. Say what you will, that's some impressive market design right there. Read the whole thing and find out how it works.

Remember this next time someone tells you that the information asymmetry problems in a market are so severe that we absolutely must have yet more government regulation.

Great Question

From Pax Dickinson:

"Mr. President, would the US be better off today if you'd been prosecuted for smoking pot as a youth, or are you a total hypocrite?"

 Don't hold your breath waiting for it to be asked, let alone answered.

Bad News, Good News

The bad news: Chicago is broke, homicides are up 37% this year, and the police department is feeling the strain.

The good news:  Chicago is so broke that they've decided to stop flushing money and lives down the toilet for marijuana possession:

People caught with small amounts of marijuana in Chicago will be ticketed instead of arrested under a new ordinance passed by the city council on Wednesday, as the third largest U.S. city became the latest to support more lenient penalties for using the drug.

The council voted 43-3 in favor of the measure, which was backed by Mayor Rahm Emanuel.

Under the ordinance, police in Chicago can issue a written violation with a fine of between $250 and $500 for possession of 15 grams (0.5 ounces) of marijuana or less rather than make an arrest.

It turns out that ruining lives for needless drug convictions are a luxury good, and one that Chicago has decided it can no longer afford. This is a great outcome - off the top of my head, this would have to be one of the worst NPV projects the city undertakes, so it's good that this is the one that gets canned when the crunch comes.

Somewhere at HBS, Michael Jensen is muttering to himself, 'I told you so.'

The Impacts of Drug Use <<< The Impact of Being Arrested For Drug Use

Penn Jillette unloads on the Obama administration about the fact that he continues to support drug policies that lock people up for doing exactly what Obama admits to doing in his youth:

Do we believe, even for a second, that if Obama had been busted for marijuana -- under the laws that he condones -- would his life have been better? If Obama had been caught with the marijuana that he says he uses, and 'maybe a little blow'... if he had been busted under his laws, he would have done hard f*cking time. And if he had done time in prison, time in federal prison, time for his 'weed' and 'a little blow,' he would not be President of the United States of America. 

I think Jillette is right to note that relevant part about all this is not that there is hypocrisy in doing drugs yourself at one point and then maintaining the laws against drug use. People are hypocritical all the time, but that doesn't mean the right thing to do is abandon all laws. Even murderers wouldn't necessarily prefer to live in a society where murder was legal.

Few people call Obama on his hypocrisy, because I am certain that it's shared by millions of respectable middle class parents all around America. They smoked up in their youth, turned out just fine, and still dutifully turn up to the polling booths to keep marijuana illegal. They'll do this, all the while being ready to pull every string to keep their beloved child out of prison should they get unfortunately arrested for possession.

What's most striking is the sheer casualness with which the upper classes will admit to their former drug use. Obama did weed and 'maybe a little blow' (as if one might forget whether one had done blow). Bill Clinton smoked but didn't inhale. George W. Bush did 'young and foolish things when he was young and foolish', which I'm sure amounts to the same thing, if just in euphemistic form. He certainly didn't seem any more repentant than the rest.

What these statements really reveal is that our elected leaders are essentially admitting that the problem with drugs is not actually using them, but getting arrested and convicted for using them. Smoke some weed as a teenager and you'll probably turn out just fine. Get convicted for smoking some weed as a teenager and you may not.

And isn't this exactly saying that the real problems for users of marijuana are the ones created by making it illegal?

It's also sharing in the joke that enforcement is so random and sporadic that they're not even worried about admitting to what amounts to a federal crime. There's a strange gentleman's agreement that we never prosecute admissions for former drug use, if only because we'd have more prisoners than free citizens if everyone who'd ever smoked pot were to be locked up.

Now, it's not the case that extremely harsh but seldomly enforced punishments are always bad public policy. This is the Gary Becker theory of rational deterrence - you need punishments to be harsher if the probability of being caught is low, but the social harm is high, so that deterrence is strong.

Back in medieval times, things like highway robbery and horse stealing always got extremely harsh punishments. Not because they were the most repugnant crimes, but because they were committed frequently, the cost of allowing them was very high, and the punishment needed to be very nasty to encourage people not to do them.

But here's the question - can you imagine people at the time jokingly admitting in their memoirs that they'd been horse thieves and highway robbers? Of course not - they'd be hanged immediately. And that's because highway robbery was a serious social problem that the authorities were taking serious steps to try to remedy, even if they would offend our current sensibilities.

By this metric, marijuana is definitively not a serious social problem. People are happy having ridiculously harsh punishments that ruin lots of people's lives, confident that as long as they don't get caught at the time, enforcement is so lax that they can joke about it in public. It's a farce, but it's not a funny farce.

I have never, never, heard a coherent public policy rationale for why alcohol should be legal and marijuana should be illegal. Like Penn Jillette, I don't partake in either, so I have no dog in this fight personally.

But ruinous social policy is everybody's concern. It's a sick joke, and it's time to end it.

Digging ditches with teaspoons, Drug War make-work edition

We previously encountered this country's illustrious drug czar, Gil Kerlikowske, here, making ridiculous claims that the drug war has ended under the Obama administration. At the risk of being impolite, it's hard to describe this as anything other than a shameless, bald-faced lie. I mean, sure, the DEA is still locking up college kids for smoking marijuana and leaving them for five days without food or water until they attempt suicide,

But on the plus side, the war on drugs has ended! I take this statement to mean merely that they're relabeled the same old crap sandwich of policies as 'Therapeutic involuntary harm-restraint of at-risk individuals' or 'community protection and engagement policies' or some other junk.

If you were tempted to conclude that Gil Kerlikowske must be a mendacious fool, I have little news with which to dissuade you. Via Radley Balko comes a dispatch from another speech of Kerlikowske's, described here:

"Just last year, the Department of Justice released data that health, workplace, and criminal justice cost of drug abuse to American society totaled over $193 billion...Contributing to the immense cost are the millions of drug offenders under supervision in the criminal justice system"

I'll give Kerlikowske this much credit - he hasn't yet taken his argument to the logical extreme that all this spending is a form of stimulus to the nation's prison warders.

But it's the same old wine of make-work accounting, poured into the slightly new bottles of the credits side of the ledger, instead of the debits.

To white, the argument is in essence: 'Look at all this money I'm spending combating this problem! Surely this illustrates how large the problem itself is, and thus the necessity of the very spending that I'm defending.'

I need to get from my house to the airport. Rather than take a bus or a taxi, I hire the Gil Kerlikowske Party Bus, decked out with government funded champagne, a bouncy castle and gold-plated seat belts, to take me there in style. This runs up a tab of $1000, which I then use to argue how crucial it is to get extra funding to address the obviously dire need of massively increased costs in the airport transportation business. Vote for my policies!

Let's let our favourite 19th Century Frenchman school the fool over this stupidity:

But let us go to the root of the matter. We are deceived by money. To demand the cooperation of all the citizens in a common work, in the form of money, is in reality to demand a concurrence in kind; for every one procures, by his own labour, the sum to which he is taxed. Now, if all the citizens were to be called together, and made to execute, in conjunction, a work useful to all, this would be easily understood; their reward would be found in the results of the work itself.

But after having called them together, if you force them to make roads which no one will pass through, palaces which no one will inhabit, and this under the pretext of finding them work, it would be absurd, and they would have a right to argue, "With this labour we have nothing to do; we prefer working on our own account."

Like M. Bastiat, I too prefer working on my own account. So too do the millions of people locked up in US prisons for non-violent drug offenses. As it turns out, neither of our opinions matters one jot.

Gil Kerlikowske has actually gone one better than the French government. Spending the drug war money on building roads no one will pass through and palaces no one will inhabit would be an enormous improvement on the current situation. Setting the money on fire would be an enormous improvement.

Instead, we spend our money to lay waste to the human capital of the nation's youth, creating untold wages of woe inside the US and abroad.

As I said, in the end it's stupid to blame the politicians for responding to the incentives we give them.

Somebody keeps voting for this madness, year after year. Lots of somebodies, in fact.

The ultimate shame is theirs. What folly, what mad, senseless folly.

Great News

Apparently the War on Drugs has ended! I know this because I read as much from Gil Kerlikowske, director of the Obama administration's White House Office of National Drug Control Policy. (i.e. the drug czar). Let's hear it from the man himself:

My first act upon being appointed President Obama's drug policy advisor in 2009 was to discard the "war on drugs" approach to formulating drug policy.

That's fantastic! It should could as great news to the families of Wendell Allen, Ramarley Graham, Jonathan Ayers, Eurie Stamps, etc. etc. etc.