Monday, June 9, 2008

Drug Prohibition Leads to Addiction

Prohibition of drugs actually encourages drug use.

When drugs are prohibited, the supply of drugs goes down, which creates great demand for them. Due to the high demand, the price of drugs are driven up in the prohibited state. Drug dealers thus have the incentive to buy drugs cheaply at non-prohibited states and sell them at a high price in prohibited states. They earn extremely great profit because of the high Profit margin.

Drug addiction is uncontrollable. Once a person is addicted after taking a sample of a drug, the addiction can last forever. It is virtually impossible to become non-addicted.

Rational people would not waste their money to buy drugs and many poor people do that because they are addicted. It confirms that addiction cannot be suppressed.

This creates an incentive for the drug dealers to advertise their drugs to non-drug users. They have an excellent strategy to do that. The drug dealer can first offer free samples to non-addicts. The non-addict, after taking the free sample, become addicted forever with that drug. Thus, the addict would in the future buy drugs from the drug dealer. Despite the initial loss by giving a free sample, the drug dealer would infinitely gain by selling drugs in the future to the addict.

However, there is a problem: the free rider problem. If many drug dealers compete in one single geographical area, then no drug dealer would offer free samples. Offering free samples are too expensive. Thus, the drug dealers would collude and form a single cartel over a geographical area. The drug firms would merge and share profit. Therefore, they would have the incentive to offer free samples to get non-addicts addicted, since all profit or lose the same.

And most importantly, 99% of drug addicts started their addiction when they were children.

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