The Case For
It is no secret to anyone who has read Milton Friedman's Free to Choose that he was a resolute supporter of the legalization of marijuana. As one of the world’s leading economists, Friedman looked at the other side of the coin of the marijuana trade. Friedman was not alone in his opinion and he along with over 500 other economists signed An Open Letter to the President, Congress, Governors, and State Legislatures on the advantages of legalizing marijuana. Along with Friedman, the letter was also signed by a number of venerated world economists, including Nobel Laureate George Akerlof, Daron Acemoglu of MIT, Howard Margolis of the University of Chicago, and Walter Williams of George Mason University.
The Open Letter crafted by some of the best economic minds of our times read:
“We, the undersigned, call your attention to the attached report by Professor Jeffrey A. Miron, The Budgetary Implications of Marijuana Prohibition. The report shows that marijuana legalization -- replacing prohibition with a system of taxation and regulation -- would save $7.7 billion per year in state and federal expenditures on prohibition enforcement and produce tax revenues of at least $2.4 billion annually if marijuana were taxed like most consumer goods. If, however, marijuana were taxed similarly to alcohol or tobacco, it might generate as much as $6.2 billion annually.
The fact that marijuana prohibition has these budgetary impacts does not by itself mean prohibition is bad policy. Existing evidence, however, suggests prohibition has minimal benefits and may itself cause substantial harm.
We therefore urge the country to commence an open and honest debate about marijuana prohibition. We believe such a debate will favor a regime in which marijuana is legal but taxed and regulated like other goods. At a minimum, this debate will force advocates of current policy to show that prohibition has benefits sufficient to justify the cost to taxpayers, foregone tax revenues, and numerous ancillary consequences that result from marijuana prohibition. “
Miron's report on marijuana legalization is a highly recommended read for anyone interested in the topic. Even the executive summary is worth taking a look at. One has to consider the balance between the costs of jail-housing large numbers of pot dealers compared with a savings of about $7.7 billion if these same people are not in prison. Somehow the $7.7 billion in projected savings seems like a number worth considering.