Tuesday, March 22, 2005

Marginal Revolution: The War on Drugs

The War on Drugs:
One interesting reason why the drug war reduces consumption less than people imagine is that prohibition reduces some costs. Drug sellers, for example, do not pay social security taxes for their employees, they do not follow minimum wage laws and they do not obey costly FDA regulations. On net prices are still pushed up by the threat of prosecution but the lack of taxes and regulations is a countervailing factor.

I wish our legislators read blogs.

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