Wednesday, June 22, 2005

Undertake action X and you fund undesirable group Y 

I suppose as the economist of the NARN that this duty falls to me. Captain Ed blogs about an investigation of ties between an Ecuadorean drug ring and Hezbollah. Ed admonishes:
People who use cocaine and other recreational drugs should see this as a wake-up call in more ways than one. That little vial or baggie you buy to feel hip and cool doesn't come out of nowhere. Even without the Middle Eastern connections, most "distribution channels" rely on extortion and murder for market control. Add in the Hezbollah funding, however, and you can draw a direct line between the party animals who do a little blow and the pro-democracy activists getting blown up.

I've heard this meme applied to oil: "If Big Oil wasn't supressing the secrets of engines that get 300 mpg, we'd not have to be in Iraq" or "Drive your SUV and you support the terrorists".

Making any good illegal to consume (or restricting its consumption) creates a black market and an opportunity for those willing to accept risk in return for high profits. This can be illegal drugs or even legal ones (I am waiting for the first black market in Sudafed); Prohibition funded the growth of La Cosa Nostra in the 1920s. The simplest way to stop Hezbollah from earning large profits from drug importation isn't to run more commercials with frying eggs and dumb analogies but to end the prohibition on cocaine use. If you want to keep prices high to discourage consumption, tax it legally at a rate sufficient to keep street prices where they are.* This will not do a thing to stop ancillary crimes committed by addicts seeking a fix, but it will stop funding narco-terrorists and their friends in the Middle East.

If it's good enough for Milton Friedman, it's good enough for me.

*--Maybe you can call it a health impact fee.