Legal pot: Good, not perfect.

Legalize Drugs, Deal With the Downsides

Megan McArdle is a Bloomberg View columnist. She wrote for the Daily Beast, Newsweek, the Atlantic and the Economist and founded the blog Asymmetrical Information. She is the author of "“The Up Side of Down: Why Failing Well Is the Key to Success.”
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How much benefit can we expect from drug legalization?

For the past few years, John McWhorter has been making powerful arguments that we should end the drug war that has fueled so many problems in the black community: the horrendous relations with law enforcement; the lucrative black market that lures unskilled young men away from education and legitimate jobs; the violence as drug dealers use guns in lieu of legal protection for their businesses. As longtime readers know, I am in sympathy with all those arguments. I support legalization of all Schedule I and Schedule II drugs, even at the risk of substantially increasing the number of people who abuse them.

At the same time, I want to be realistic about the potential benefits. If we legalize drugs, will the gangs, and all the attendant costs of the drug war, really go away?

Here's one optimistic piece of evidence: The murder rate in America seems to have plummeted dramatically since the end of Prohibition.

The U.S. could certainly use a lower murder rate and fewer people behind bars, so that's a pretty powerful argument in favor of legalization.

On the other hand, it's not as if the Mafia went away as soon as its liquor profits did. Instead, it expanded into other areas: gambling, vice, narcotics, extortion and "racketeering": infiltrating unions and legitimate businesses and using the threat of violence to make excess profits.

That makes it hard for me to believe that the criminal enterprises running the drug markets will simply go softly into that good night of legalization. I'm not saying that the Crips and the Bloods will take over the Service Employees International Union. But I have no doubt they'll try to take over something. I doubt anyone in 1932 would have predicted that the next stop for the Five Families was the Longshoremen or the waste-management industry. But I bet a lot of people thought the Mafia would just have to fold up its tents or go back to being small, local organizations that could easily be crushed by the law -- and they were obviously wrong.

If we never had Prohibition, the Mafia would probably never have gotten very powerful. But once we had it, we produced a large number of rich people with a vested interest in keeping things going. In other words, the growth of criminal gangs is "path-dependent" -- just because you could have gotten a very good outcome if you'd stopped something before it started doesn't mean that you can get the same great outcome by ceasing now.

Of course, we have more tools to fight organized crime than we used to. And extortion has gotten a lot harder than it used to be, as this "Sopranos" episode hilariously illustrated. But desperate people can be very creative. And for all its good effects, drug legalization would produce a lot of desperate criminals looking for ideas.

I still support legalization, to be sure. But while it might help, we should remember that it might not be sufficient to erase all the pathologies that the War on Drugs has helped to create.

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

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Megan McArdle at

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Brooke Sample at