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Introduction
The original definition of drug is not so offensive. It is just something that affects human bodies. Drugs have been part of human culture since the middle of last century. It is generally classified in two categories, namely pharmaceutical drugs and recreational drugs. The only difference is that sometimes recreational drugs such as alcohol and nicotine may be addicted. However, drug abuse is referring to the non-permissive consumption of certain substance which may lead to physical and psychological dependence. This behavior may lead to very harmful economic and social impact. Illegal drugs were first popularized in the 1960s by music and mass media. Lately they started to invade all aspects of American society. Commonly abused drugs may include marijuana, cocaine, heroine, alcohol, prescription drugs, inhalant and solvents. According to the United Nations 2017 World Drug Report, there are over 4% of the global population between the ages of 15 and 65 abuse Marijuana(UNODC, 2017). Some people take stimulants to keep alert or cocaine for the feeling of excitement. Some take drugs to relieve pain, escape reality or to feel more self-esteem. It is true that People may take drugs for many reasons but economically it will generate many negative externalities and high social cost. According to the report released by National Drug Intelligence Center (2011), in 2007 alone, the cost of illicit drug use are accounted for approximately $200 billion. Both direct and indirect social costs can be mainly identified in three areas, including crime, health and productivity. In this essay, the economic impact of the three areas will be discussed. Besides, economic concepts behind the illicit drug trade such as negative externalities and black market will be elaborated. Last, solutions including supervised injection sites and legalization of less harmful drugs will also be explained in details.
Economic impact of illicit drug use
First, drug abuse may remarkably increase the crime rate in the U.S. Many drug users engage in criminal activity such as burglary and prostitution as they need to raise money to buy drugs. Some drugs,especially alcohol, are associated with crime behavior. In ordinary language, the term crime denotes an unlawful act punishable by a state. One proposed definition of crime is that it is an act harmful not only to some individual but also to a society or the state. Legally speaking, crime is also known as a public wrong. Such acts are forbidden and punishable by law. Typical crime behaviors associated with drug abuse may include drug trafficking, extortion, political violence (corruption), abduction, domestic violence, child abuse, Cyber crime, attempt to suicide, etc. The correlation between drug abuse, violence and suicide is well documented by a group of researchers (Ilgen and Kleinberg,2011). According to their report, suicide is ranked the 11th place as the leading cause of death in the U.S. Each year, more than 34,000 death cases are attributed to substance abuse. Ilgen and Kleinberg (2011) also point out that nearly 5% of the U.S adults have very serious suicide attempts after consuming drugs. Illicit drug use may create many mental health problems which accounts for the crime behaviors. Stimulants, depressants and hallucinogens have very distinctive effect on human’s central nervous system. Individuals who consume the above-mentioned drugs may have a transient happiness. But when they develop a tolerance, the body will need more for the same effect. This contributes to the escalating needs for drugs. It is predictable that more time and money will be involved with this addicting habit. As a result, more and more people in the U.S may develop crime behaviors due to drug abuse. According to the report of United Nations Office on Drugs and Crime (UNODC, 2017), People aged from 16 to 24 are the most likely to binge drink or take drugs excessively. This age group is also the most likely to commit or be the victims of crimes. The increasing crime rate will adversely affect the social and societal stability in the U.S. It generates very social costs and negative externalities which will be elaborated in the later part of the essay.
Moreover, drugs are also very harmful to Americans’ health. As the aforementioned, drugs are mainly abused in three categories, namely stimulants, depressants and hallucinogens. Drugs can be harmful in many ways through both immediate effects and damages to human health over time. For instance, occasional use of marijuana affects the cognitive development and short-term memory of individuals. Cannabis, more commonly called marijuana, refers to the several varieties of Cannabis sativa that contains the psychoactive drug, Delta-9-tetrahydrocannabis or THC for short. It is the most widely used illegal drug in the world. Marijuana is typically smoked in hand role cigarettes or joints. Water pipe is used to deliver bolus dose. Most young people use Marijuana in order to experience a “high”, characterized by a mild euphoria, relaxation and perceptual alterations. Perceptual alternations may include time distortion and the intensification of ordinary experiences when they are listening music or watching films.When Marijuana is used in a social setting, the “high” moment is accompanied by infectious laughter and increased sociability. Cognitive changes including impaired short-term memory may turn individuals to become lost in pleasant reverie and very difficult to sustain goal-directed mental activity. Reaction time, motor coordination and many forms of skilled psycho-motor activities are also impaired while individuals are intoxicated with drugs. It will increase the risks if users drive vehicle and other transportation tools. According to the NBC news, the consumption of marijuana accounts for 6% increase in the number of highway crashes in four of the states in which marijuana is legalized(Eisenstein, 2018). Thus, it is not very difficult to observe that illicit drug use will not only be harmful to human beings’ health but also threatening others’ life and properties.
Furthermore, illicit drug use may also affect the net productivity in American societies. The costs associated with decreasing productivity can be measured in factors such as absenteeism, injuries, health insurance claims, theft, loss of employee morale and fatalities. Epler, et al. (2014) disover that 10 percent of drug users and heavy drinkers frequently miss their work because of hangover. About 6% of people take drugs or become drunk in the workplace. 18% of drug users even skip their work in the last year. Causal drinkers are a problem as well.Roche, Pidd and Kostadinov(2016) point out that social drinkers, instead of the hard-core alcoholic drinkers, who should be responsible for the loss of productivity. According to their research, managers, not hourly employees, tend to drink during the workdays. As a result, it is very difficult for the management team to make conscious decisions in business operations and activities. It further creates economics loss in respective companies and organizations. Besides, drug abuse in the workforce is also a growing challenges for American businesses. Drug-abusing workers can the most immediate harms not only to themselves or others. According to the National Safety Council, nearly 33,000 Americans are killed by opioids in 2015 (Saraiva and Smialek, 2017). It forces employers to perform drug tests in order to the reduce the number of drug-abusing workers. Hence, it is indisputable that drug abuse and illicit drug use will significant reduce the productivity of workforce and create adverse impact on the U.S economy.
Negative externalities and the danger of Black market
After understanding various economic impact of illicit drug use on American societies, it is also important to learn deeply about some economic concepts behind. By definition, negative externalities occur when the production and consumption impose external costs on third parties of the market for which no appropriate compensation is paid. The production and consumption of illicit drugs will certainly create negative externalities as it does not only harm individuals themselves but also create harms to the society as a whole. Community well-being is a common good because common goods are defined as non-exclusive and rival. Community well-being is non-exclusive as no one can really be excluded from participating in community well-being. But community well-being is also rival in nature as one individual might cause others’ well-being to diminish. Illicit drug use will adverse affect the community or social well-being. As the aforementioned, illicit drug use and drug abusing behaviors can create negative externalities such as increasing crime rates, health problems and loss of productivity.
Competition in the drug market is largely based on price, quality and service. However, the competition for market share is outside of the law for black markets. In order to compete, firms in the legal drug market have to lower prices, and improve the quality of their goods or give better services. On the contrary, even though firms in the black market can also compete with other firms in the same way, they discover that threats and violence are far more effective. The illegal drug trade is a global black market that is dedicated to the cultivation, manufacturing, distribution and sale of drugs that are subject to drug prohibition laws. Werb, et al(2011) point out that violence plays an important role in the profit maximizing in drug dealing businesses. There are also many common black markets such as prostitution, alcohol during the Prohibition Era, illegal gambling. Even though the U.S government is prohibiting illegal activities, it cannot eradicate the demand for these products or services. Economically speaking, products and services sold in the black market is price inelastic in nature. In other words, when the price goes up, the demand will not drop accordingly. As such, many manufacturers and producers are attracted by the huge profit margins in the drug dealing industry even though it is legally banned in the U.S.
Many people realize that illicit drug use may lead to many economic and social problems but it is very difficult for the drug trade to be legally prohibited. It is largely because prohibition may lead to violence and other crimes. Originally drugs with prescription are not illegal. The drugs market in an equilibrium. When the government sets in and starts to prohibit illegal drugs, the market equilibrium is disrupted. Drug deals who are allured by the huge profits in the businesses may start to use violence and other crime activities for drug trafficking. The increase in police behavior causes an increase in the probability of arrest and an increase in expected costs for potential prison sentence and other legal fees. The increase in the costs of production only leave drug-dealers two choices. One is to remain in the territory due to the huge profit margins. The other choice is to shift the drug production to another justification. For example, in Mexico, there are many drug cartels who are responsible for drug trafficking the U.S. It is largely because the jurisdiction systems in the U.S and Mexico are very different. Mexico drug cartels spread violence and drugs into the U.S. According to the Washington Post, thet U.S is now having a problem which is the Mexican Drug Wars. Nearly, 99.8% of the country’s marijuana, cocaine, and other illicit drugs on the U.S streets are coming from Mexican drug cartels(Bedard, 2018). It is reported that the cartels members are tactically trained and are very dangerous to the common public. In Mexico, due to the local government prohibition on drugs, cartels keep fighting against each other for regional control and even fight against the government forces. The Mexican government has claimed that the primary goal in the Mexican Drug war is to focus on dismantling the powerful drug cartels. But the interesting part is that the Mexican government does not intend to stop drug trafficking. It believes that the U.S side should take the responsibility to prevent board drug trade. According to the Fox news, two board patrol agents are died from stopping illegal drug trafficking and illegal immigrants last year(Lam, 2018). Although Mexican drug cartels and drug trafficking organizations have existed for several decades, they have become more powerful since several decades, they become more powerful since the end of Columbia’s Cali and Medellin cartels in the 1990s. The Mexican drug cartels now dominate the illicit drug market by controlling 90% of the cocaine that enters the United states. It is unfortunately to note that the arrest of key cartel leaders further lead to the increase of drug violence as cartels fight for control of the trafficking routes into the United states. As the aforementioned, the legal prohibition leads to violence as the huge profits in the drug trafficking businesses allure people to join the black market. It is estimated that the wholesaling earnings from illegal drug trafficking can be ranged from $13.7 to $49.5 billion annually(Rizzo, 2019). Given its geographic location, Mexico has long been used as a staging and transshipment point for narcotics and illegal immigrants destined for the U.S. The illicit drug trade and illegal immigrants now are two real concerns of the White House. President Trump is even demanding the construction of walls between the borders of U.S and Mexico. Mexico has supplied alcohol and the onset of illegal drug trade with the U.S began when the prohibition came to an end as early as in 1933. Towards the end of the 1960’s, the Mexican cartels started to smuggle drugs on a very large scale.
In addition, the U.S Justice Department also considers the Mexican drug cartels the greatest organized crime threat to American societies. During the first 20 months of Calderon’s presidency, the Mexican government decides to collaborate with the Federal government of the U.S to jointly declare war against illegal drug trade. The Mexican government has spent over $7 billion in the war against drugs. However, the Mexican side also points out that the illicit drug trade is a shared problem in need of shared solutions. The U.S authorities point out that many crime cases such as killings, kidnappings and home invasions are connected to Mexico’s cartels. Between 2009 and 2010, around 100 Americans were killed in the disputes in the crime cases. Multiple killings have lead the United States Department of Homeland Security to consider using the National Guard to stop the drug violence and drug trafficking in the board between U.S and Mexico(Homeland Security, 2019).
Since most of the financing for the Mexican drug cartels come from the U.S drug consumers, it does make sense that U.S should also take the responsibility to stop drug trafficking. In fact, the most astonishing news recently is that the U.S starts to set up the Supervised Injection Sites in Philadelphia(Allyn,2019). As the aforementioned, the emergence of the black market is due to the government or legal prohibition of illicit drugs. The addictive behaviors of drug consumers make them spend large portion of their income in purchasing illicit drugs. Even worse, the drug cartels are also heavily financed by the U.S consumers. Therefore, even though drug trafficking is prohibited, drug dealers and cartels are still willing to bear risks to smuggle drugs to the U.S. One possible solution is to construct more supervised injection sites. It will effectively lower the price of illicit drugs so that innocent people are avoided being exploited from the drug cartels in Mexico. Besides, the drugs being injected are less harmful than other main types of illicit drugs such as Heroin. The Supervised injection sites will also create a stress-free and private environment which allows the drug-takers to be less exposed to the public. It will reduce the influencing power of illicit drug use to the common public. Most importantly, illicit drug consumers can also receive sterilized injection and information about the harmfulness of drug abuse. It is also a good chance of them to receive treatment referrals, get an good access to medical staffs and know more about drug addiction treatment.
Lastly, in order to fight against the black market of illicit drug trade, many countries also start to legalize certain types of less harmful drugs. Marijuana use is widespread even in places where it is banned. It has led to many related problems such as increasing in gang members, police violence, criminal activities, drug cartels and black market. However, apart from the adverse impact, Marijuana can also be used in some positive ways. For instance, Marijuana can be used to reduce anxiety and as a relaxation aid. It also can be used for medical purposes such as reliving pain. Marijuana has also been consumed by various religious groups including Hindus, Buddhists and members of other religions in their ceremonies for thousands of years. In 2002, Canada’s Special Senate Committee on Illegal Drugs reviewed the policies and reported that Marijuana is not a gateway drug(Hauser, 2019). It should be treated like tobacco and alcohol. In my opinion, the fundamental reason for Canada and many other countries to legalize Marijuana is that the costs of prohibiting this drug is very high. Prohibition has not been effective and has not stopped people from using the illicit drugs. When Marijuana is legalized, it is very difficult for drug cartels to drive the price purposely and exploit consumers’ welfare.
Conclusion
In conclusion, it is indisputable that the illicit drug use can potentially create many adverse economic impact on American societies. It increases crime rates, deteriorate the health level of common American citizens and leads to the loss of productivity in the workplace. It increases the social costs and generate negative externalities. However, it does not mean that legal prohibition may be an effective way to prevent drug trade and trafficking. Both the U.S and Mexico have paid very high price in order to fight against Mexican drug cartels but the problem of black market is still very significant. Therefore, in order to effectively reduce the illicit drug use, two solutions have been proposed in this essay. One is to construct more supervised injection sites. The other is to legalize less harmful illicit drugs. It is true that these two methods are relatively effective and efficient as the cost is lower than declaring war directly against drug cartels. But it is debatable whether the two solutions are morally correct. To construct supervised injection sites is not equivalent to prevent drug-takers from consuming illicit drugs. It may turn out to encourage them to consume more. To legalize marijuana may be equally problematic. Even though there are many positive reasons for legalizing it, the increased use of marijuana could create public safety problems and driving dangers. Besides, it will also be harmful to human’s health. Therefore, more solutions should be discovered and assessed in order to stop illicit drug trade and smuggling.
Reference
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