by Harry Browne

Why drug profits are big

If a large volume for some product is sufficient to finance terrorism, why don't terrorists raise money by selling computers or aspirin or food?

Well, why don't they?

The answer is that those products generate very small profits per sale, while drug profits are astronomical.

Whenever the profits in computers, aspirin or food increase, the supply of the item expands - pushing prices and profits back again to levels similar to those of other products.

And why are drug profits astronomical?

Because drugs are illegal.

If drugs were legal - if Smith Kline, Eli Lilly or Bayer could sell drugs - prices would be so low that the profit would be no larger than in computers or food. So how could the terrorists make big money in such a business?

The black market in drugs

When the government interferes with a product in wide demand - through price controls or outright prohibition - a "black market" develops.

A black market is a free market existing in defiance of the government.

Because it's illegal, a black market attracts only people willing to defy the government and risk going to prison. Since they're already outside the law, these people generally are quite willing to use violence to keep competitors out of their markets. The violence-imposed monopolies cause prices and profits to be much higher than those in a legal, free market.

So the Drug War creates a logical way for terrorists to raise money.

The Drug War also encourages corruption - as some of the oversized profits subvert policemen, prosecutors and judges who will look the other way.

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Trying to stamp out a popular product is like trying to hold back the tides. And so prohibition inevitably leads to more aggressive law-enforcement - violations of civil liberties, police raids that kill the wrong people, and sentences way out of proportion to the "crimes" committed.

Thus government interference in drugs leads easily to violence, the killing of innocent people, corruption, tyranny and injustice.

That's what happened with alcohol prohibition in the 1920s. That's what's happening with drug prohibition today.

Legal and illegal markets

The Drug Warriors try to scare us by pointing to conditions in today's illegal market and claiming they'd be even worse in a legal market: "If you think drugs are a problem now, imagine if they were legal - with pushers on every street corner harassing your children."

But when drugs were completely legal in America, there were no pushers. When people could go to the drugstore and buy Bayer heroin off the shelf in a safe, measured dosage (for pain relief, as a sedative, or because of an addiction), the price was so low that no pusher could succeed selling drugs of unknown origin on the street.

If you haven't studied the history of drugs to be aware of how much safer (and less-often abused) they were when completely legal, I can understand why you're afraid of relegalizing them.

But by now you should be well aware that government uses self-serving propaganda to expand its own power. As the saying goes, "Truth is the first casualty of war." That applies to the War on Drugs and - yes - the War on Terrorism.

If you want to end the dangers of drugs, the violence, corruption, tyranny and injustice, we have to end the insane War on Drugs.

Drugs and terrorists

Do the terrorists sell drugs to finance their operations?

Frankly, I don't know. And I try not to make assertions on matters I haven't studied extensively.

But I can be pretty sure of one thing: Terrorists aren't selling computers, aspirin or food.

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Originally published March 21, 2002 at WorldNetDaily.

Harry Browne (1933-2006), the author of Why Government Doesn't Work and many other books, was the Libertarian Party presidential candidate in 1996 and 2000, a co-founder of DownsizeDC, and the Director of Public Policy for the American Liberty Foundation.  See his website.