A friend actually requested this article. The economic dislocations of ending the drug war is one reason that she cannot yet back doing so. She wanted this issue explored farther.
Momentum is growing to legalize some drugs, which is good. So what will it mean if drugs are legalized?
In terms of abuse, it is unlikely that matters will change significantly in terms of general usage. The ending of prohibition provides an object lesson in that as consumption of alcohol changed very little once prohibition was repealed. If anything the damage will be lessened the way the damage of alcohol was lessened due to the introduction of quality and price competition.
But the real area of focus is in how the economy will be impacted by the ending of drug prohibition.
Government statistics show that a significant portion of the prison population is "non-violent drug offenders." It's not the best indicator, as the best is "victimless drug offenders." A victimless drug offender only includes those involved in purchase, sale, possession, or use of drugs, and conspiracy to purchase, sell, possess, or use drugs. Non-violent drug offender can include those who steal without hurting anyone. "Victimless" also includes money launderers from the drug sales.
It's also often reported that the prisons are overcrowded. Releasing the victimless drug offenders will reduce overcrowding by a significant amount. This will bring a recession into the prison construction industry, but those in that industry can apply their talents to constructing other buildings.
This will also significantly reduce the role of any police involved in drug enforcement, from city and county level up to the Drug Enforcement Administration.
Those on the city and county level, where most laws are enforced, will be able to turn their attention to crimes that actually have victims. In an ideal world police reports about drug enforcement mean that all other crimes have been solved. In this world those reports mean that time is being taken away from all other crimes.
It is at the level of the Drug Enforcement Agency where real changes will be seen. Taking just marijuana off the enforcement list alone will reduce the need for their operations enough to cut both budget and jobs.
This could result in unemployment among drug enforcement agents. Many of them could transfer to other departments within law enforcement. Given that all of them are already tax consumers instead of wealth producers, switching them from drug enforcement to welfare recipient merely switches numbers from one column to another.
Plus it enriches everyone else because even if their welfare exactly equals their salary they cannot impoverish anyone through the activities of their job any more.
Due to a decline in crime, including violent crime, law enforcement will find they have less to do. As a result, slowly, the police may start to reduce their numbers. That is actually unlikely as government agencies exist to expand their budgets instead of achieving efficiency. More likely the police will claim that budgets need to be maintained or expanded to continue the downward trend in crime.
Cities will no longer need to pay reparations for wrong house no knock raids (sometimes ending in the death of the house occupant and always ending in death of their dogs). Lawsuits will decline as a result. The cities will be richer by the amount of those lawsuits. Those who live at the places that may be raided are not impoverished by the raids anymore. (And the dogs are all safe.)
The biggest losers of drug legalization are the criminal syndicates that currently supply illegal drugs. They will lose their market share, their standard of living will rapidly plummet – and they will not be able to wage war on their competition.