Nothing New Under the Sun: Prohibition, Drugs, and the Iron Rule

A while ago, about 4 years ago, This series started with Drug prohibition will only create a public health crisis That means such policies should be relaxed. Of course, I didn’t expect there to be such a long gap between the last article and this one, but I think this nicely illustrates the difference between intent and outcome.

As a review, our last conversation Highlights how Prohibition-era laws such as the Harrison Act and the Volstead Act led to later laws such as the Boggs Act of 1951 and the Drug Control Act of 1956, which began the modern War on Drugs™ Did. Today, we further explore the similarities between these two regime paradigms and highlight why the continued failure of the drug war is inevitable and entirely predictable. The Pygmalion effect that creates the forbidden.

When the 18th Amendment was passed in 1920, it was widely hailed as a turning point that would reduce crime and poverty, exempt citizens from prison and workhouse costs, and save families from the vagaries of drunkenness. Similarly, when President Nixon declared drug addiction public enemy number one in his 1971 year, it was his 1969 declaration to Congress that the full force of the government must be mobilized.To address this growing threat to the overall well-being of the United States.” Again, the public was told that it would reduce crime and poverty, reduce the scope and cost of incarceration, and eradicate danger to American families.

To say these assurances were wrong is a gross understatement, and even this underestimates the negative impact of these policies. From 1916, four years before the enactment of Prohibition, to 1929, four years before its abolition. The number of cases discontinued in federal court and the number of prisoners remanded from federal court have both effectively quadrupled.. This, of course, led to a concomitant increase in prison spending due to overcrowding, which was a clear indication that the promised reduction in crime would not materialize. While proponents of Prohibition proudly declared that the crime wave had subsided, with petty crimes such as vagrancy and public swearing falling by 50 percent, more serious crimes rose sharply. Property theft 13.2%, murder 16.1%, robbery 83.3%. The trade-off here is between a reduction in misdemeanor offenses where you are likely to spend a fine or a night. Felony crimes have significantly increased the population of local jails, as well as state and federal prisons.

Similarly, claims that the “War on Drugs™” will reduce crime have proven to be unduly optimistic at best. In 2020, there were a total of 1.1 million arrests for drug-related crimes, the majority of which were for simple possession (Cohen, Holland, Vacaria, & Frederick, 2022). As of 2015, the ratio of prisoners to population had increased from 100 per 100,000 people before the Nixon administration’s drug policy to more than 500 per 100,000 people (Pfaff, 2015). As a result, the United States became the world’s largest prison guard, both in absolute amounts and proportions. According to Miron and Waldock, expenditures related to drug prohibition include both the increase in the number of inmates and the number of prisons/jails needed to house them. – now equals or exceeds approximately $41.3 million annually.

Despite increases in crime, prison sentences, and enforcement costs, Prohibition brought about further changes in alcohol consumption. This also applies to drug-taking patterns under the current criminalization regime. This shift, the impact of which will be discussed in more detail in the next segment, consists of consumers moving from less potent products to better products. This phenomenon, known as iron prohibition, is the result of basic economic principles. Barriers to both entry and supply create pressure to simultaneously maximize profits and minimize quantity (Beletsky & Davis, 2017). In effect, less potent and bulkier products, such as beer and marijuana, are being replaced by more potent, less bulky products that are easier to produce and transport, such as hard liquor and cocaine. Beer and marijuana may still be available on the black market, but prices for these items have risen compared to stronger, less bulky alternatives, and demand is trending toward harder products.

Despite this increase in illegal activities and crimes associated with organized organizations producing goods, much of the distribution of prohibited items is carried out by small-scale entrepreneurs (Levine & Reinarman, 1991). While many of the headlines tout the defeat of cartels and gangs, in reality, most of the arrests are of small and medium-sized neighborhood distributors. At any given time, between 1 and 2 million people are involved in drug distribution in the United States, and approximately 500,000 people are incarcerated for drug-related activities (Kleiman, Caulkins, and Hawken, 2011). What this means is that the average sales agent, for every 2 to 4 years he engages in sales, he experiences a one-year prison sentence.

Overview of social costs

All public policies should be judged on costs and benefits, including social rather than financial costs. While financial costs are easier to investigate, and at the end of the day, this is a balance sheet issue, social costs are just as important. From 1973 to 2013. More than $1 trillion has been spent on drug enforcement in the United States alone.. However, in 2016 Americans spent $150 billion on: heroin, methamphetamine, cocaine, marijuana, other types of illegal drugs are not considered. Perhaps the most troubling aspect of these sunk opportunity costs is that drug prices have continued to decline over the past 40 years, despite regimes that have increased funding for supply-side enforcement. This is not to say that they exist at comparable costs to legal substances. Their prices are still high. What can be said here is that current policies have little effect on suppressing demand.

Moreover, rather than reducing crime, prohibition only creates more criminals. Everyone involved in the pharmaceutical market, from suppliers to distributors to consumers, automatically becomes a criminal. In the absence of property rights protection and dispute resolution avenues available through normal legal channels; Stakeholders must resolve conflicts themselves, often leading to violent measures. Benson et al. (2001) found that drug enforcement was not associated with an increase in violent crime, but was also correlated with an increase in property crime. This is not necessarily because people involved in the drug market commit these property crimes, but because of the opportunity costs associated with shifting resources from one crime to another.

As with alcohol during Prohibition, quality control is an issue with illegal drugs. As previously discussed, prohibition laws create incentives to minimize production and transportation costs while maximizing profits, thus tending to increase efficacy as a primary concern. Because this product is manufactured by local entrepreneurs, there are no industry-wide safety standards, even though they are organized. So, for example, the current problem of heroin is laced with fentanyl. This leads to an increase in drug-related overdoses and other related problems.

These are just some of the obvious social costs associated with War on Drugs™. Next, we will look more closely at the issue of social costs.


Beretsky, L., & Davis, C.S. (2017). Today’s fentanyl crisis: The golden rule of prohibition, revisited. International Pharmaceutical Policy Journal, 46, 156-159. doi:10.1016/j.drugpo.2017.05.050

Benson, B.L., and Leburn, I.S. (2001). The impact of drug enforcement on crime: An investigation of the opportunity cost of police resources. Drug Problems Journal, 31(4), 989-1006. doi:10.1177/002204260103100410

Cohen, A., Vacaria, S. P., Holland, J., and Frederick, K. (2022). How the war on drugs impacts social determinants of health beyond the criminal legal system. Medical Annual Report, 54(1), 2024-2038. doi:10.1080/07853890.2022.2100926

M. Kleiman, J.P. Caulkins, and A. Hawken (2011). Drugs and drug policy: What everyone needs to know. Oxford: Oxford University Press.

Levine, H. G., & Reinarman, C. (1991). From prohibition to regulation: Lessons from alcohol policy to drug policy. Milbank Quarterly, 69(3), 461-494. doi:10.2307/3350105

Pfaff, J. F. (2015). The war on drugs and prison expansion: limited importance and limited legislative options. Harvard Law Journal, 52173-220.

Turnell Brown is an economist and public policy analyst based in Atlanta.

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