Ban the Ban: The Human Cost of Prohibitions

Prohibition describes the outlaw of the manufacture, distribution, sale or provision of particular goods and services by consenting adults. 

I recently edited a book for the Institute of Economic Affairs that examines the prohibition of ten goods and services that are prohibited or heavily restricted in some parts of the world, and in many cases in large swathes of the world. 

The goods and services examined in the collection are: recreational drugs, medical drugs, pornography, prostitution, alcohol, firearms, human body parts, boxing, gambling and advertising. 

The argument against prohibition is not necessarily an argument against government. Rather, it is an argument that we should have 60 billion governments – one for each person – rather than just a few hundred. 

I imagine most people here are familiar with the argument that prohibition is morally wrong; that each individual has a complete right of self-ownership and this means that they can do what they want to or with their bodies as long as they do not harm other people. 

Indeed, it never ceases to amaze me how much faith many people have in government and democracy. 

If two of their neighbours knocked on their door and told them that they had decided that they were no longer allowed to drink alcohol, or gamble online, they would consider that to be outrageous. 

But what is prohibition by government other than a numerical majority of our neighbours metaphorically knocking on our door and telling us what we can and cannot do? 

For me, in many ways, the argument should end there. However, it is clear that for many people this argument is unsatisfactory. 

While they may accept in principle that people should be able to do what they want they cannot get over the notion that if we legalise drugs, prostitution and firearms, for example, it will lead to some very bad consequences.

I want to address these objections by looking at the consequences of prohibition. 

(1) Prohibition places markets into the hands of criminal enterprises 

Prohibition drives a “wedge” between the cost of production and the final selling price, ensuring that those prepared to take the risk of supplying illegal goods and services can reap exceptional profits. 

The U.S. prohibition of alcohol is the most famous example. As a consequence of this policy, many criminals, such as the infamous Chicago gangster Al Capone, amassed substantial tax-free fortunes from supplying alcohol.

After alcohol prohibition was repealed in 1933, organised crime moved into the supply of those recreational drugs that remained illegal where once again huge fortunes could be made: in 1989 Forbes magazine listed the Colombian drug baron Pablo Escobar as the seventh wealthiest man in the world and estimated that his Medellin drug cartel had an annual income of $80 billion. 

(2) Prohibition increases the risks of already risky activities 

By shifting the supply of goods and services into the black market under the control of criminal organisations, prohibition greatly increases the risks of already risky activities. 

For example, in those countries where boxing is banned, organised fights probably still take place, but the fighters do so without access to proper medical care if anyone is seriously injured. 

Similarly, where people buy drugs on the black market they have little knowledge of the purity: the principal danger of taking heroin is accidental overdose from drugs with very high purity or poisoning from drugs cut with dangerous additives. 

(3) Prohibition criminalises people who would not otherwise be criminals 

Prohibition involves the creation of consensual crimes – that is, the criminalisation of acts voluntarily undertaken by consenting adults. It forces people who wish to undertake such acts outside the law and by so doing criminalises people who would otherwise be law-abiding. 

The social costs of this phenomenon can be best illustrated by the impact of recreational drug prohibition in the United States. There are at present half a million people held in U.S. prisons solely for non-violent drug-related crimes, many of whom are young people whose prospects of a “straight” career are significantly reduced by the stigma and experience of incarceration. 

(4) Prohibition imposes substantial opportunity costs on society 

The enforcement of any prohibition involves a substantial direct financial cost. To detect, arrest, prosecute and finally punish those engaging in prohibited activities requires substantial resources for the police, the courts and other government agencies. 

In this year’s UK budget the Chancellor Alistair Darling raised tax on cigarettes by 11p a packet – I wonder if that will cover the cost of policing the increase in tobacco smuggling and counterfeiting that will take place as a result? 

The cost of the war on drugs in the U.S. is enormous: the annual budget of the U.S. Drug Enforcement Administration in 2006 was $2.4 billion. This does not include the separate costs of state police, customs, coastguard and court time also spent enforcing the U.S. war on drugs. 

Prohibition, then, fuels the growth of government bureaucracies that must be funded from general taxation. 

As a result of the prohibition taxes are higher than they would otherwise be and a large proportion of the taxes that are allocated to law enforcement are allocated to the pursuit of (what might be termed) consensual crimes rather than crimes with direct third party victims, such as murder or burglary. 

(5) Prohibition increases public ignorance 

An important justification of prohibition is that many people do not fully appreciate the likely consequences of their actions. For this reason where public ignorance is widespread, government should prohibit certain activities to protect the public. 

However, by its very nature prohibition tends to increase public ignorance. It may be argued, for example, that would-be boxers do not possess the necessary information to assess the risks of boxing. If boxing is criminalised, however, fighters are even less likely to be able to access reliable information about its possible dangers. 

(6) Prohibition almost never works and is almost always counter-productive 

The costs described above might be considered worthwhile if prohibition actually worked. Unfortunately empirical evidence suggests that prohibition almost never works and is almost always counter-productive. 

For example, cannabis has been de facto prohibited in the U.S. since 1937 and de facto legal in Holland since 1970 where today it may be freely bought and sold in licensed coffee shops. In 1997, of the U.S. population aged 12 years and over, 32.9 per cent had used cannabis in their lifetime. In Holland, by contrast, the proportion was only 15.6 per cent. 

The 36 year war on drugs waged by the U.S. government appears to have had no significant impact on drug use. During this time the price of drugs has fallen while their purity has risen. In 1980, average street price for a single wrap of heroin was $3.90, while by 1999 the cost had fallen to a mere 80 cents. The average purity of heroin sold on the streets was 3.6 per cent in 1980, while by 1999 average purity had risen to 38.2 per cent. 

Legislation to ban the ownership of handguns and other firearms has been similarly ineffective in combating violent crime. Gary Mauser has shown that Ireland banned firearms in 1971, a year in which there were 10 murders in that country. Since 1995 there have never been less than 38 murders per year and in 2005 there were a total of 54 murders. 

Similarly, Jamaica banned firearms in 1974 when its murder rate already stood at a shocking 10 per 100,000 people. Since then the murder rate has continued to rise inexorably, not falling below 31 per 100,000 people since 1995. 

While the murder rate in England was fairly constant between 1974 and 1997, since handguns were banned in 1997 it has risen at the same time that the U.S. murder rate has declined. 

There is no evidence that gun control reduces violent crime. Rather, when firearms are banned people find other methods to kill one another or simply use illegally held firearms. 

Why should prohibitions almost always fail? A number of reasons can be identified. 

(1) Prohibition almost always leads to off-setting behaviour 

Hence, just as the 17th and 18th century window taxes led to houses with bricked-in windows in British streets, so punitive taxes on tobacco lead to cigarette smuggling and counterfeiting. Prohibition of recreational drugs leads to vast networks of illegal manufacture, distribution and sale, and the outlawing of prostitution leads to the provision of “massage” and “escort” services in grey markets. 

Just because government passes legislation to make something happen, it does not necessarily follow that it will. 

(2) For prohibition to be effective requires a level of government spending and interference in people’s day-to-day lives which is unacceptable in a free society 

The Taleban probably did effectively prohibit alcohol in Afghanistan, but unless you’re prepared to executive people for drinking or introduce similarly draconian measures, it is almost impossible to make prohibition work. 

(3) Prohibition very often fails because it addresses the symptoms rather than the causes of social problems 

For example, gun control is not a solution to violent crime or a high murder rate because violent criminals are perfectly capable of illegally acquiring firearms or finding other means of killing people, for example with knives or fists. 

The reduction of violent crime requires a much more sophisticated public policy approach than simply seeking to prevent criminals from accessing one particular type of weapon. 

(4) For reasons that are not well-understood, prohibition very often appears to promote the very behaviour it is intended to eliminate 

A study of attempts to prohibit smoking by U.S. teenagers by restricting the sale of cigarettes to minors had exactly the opposite effect to that intended: in towns where additional restrictions on the sale of cigarettes were introduced, smoking among teenagers rose compared to control towns where no new measures were introduced. 

Exactly why prohibition should have this opposite perverse effect is not entirely clear, but it is probably a combination of the ‘forbidden fruit effect’ – whereby activities that are forbidden become more attractive, especially to young people – combined with off-setting behaviour. 

From this evidence, my conclusion is that prohibition is immoral and it is bad public policy. 

Sadly, the costs of prohibitions usually fall on the most vulnerable members of society – those that well-meaning paternalists are usually trying to help. 

I should add that one can believe that something is morally wrong and believe that it should be legal. It is simply that one believes people should make their own moral choices, rather than having someone else make them on their behalf. 

It is the belief that if we give people responsibility they will act responsibly. That is the basis of a free society. 

A Presentation by John Meadowcroft, Lecturer in Public Policy, King’s College London to the Libertarian Alliance conference