The Pin Factory Blog

When discussing the liberalization of our drug policy it is common to hear many concede that in regards to some drugs, cannabis in particular, the UK should move towards a more permissive policy. However, many people are more reluctant to advocate an equally permissive policy for drugs like crystal meth (methamphetamine). This reluctance is ill-founded, as when one examines the history of crystal meth it becomes evident that it is a creation of the drug war, as moonshine was a creation of alcohol prohibition during the prohibition years in the United States. Controlling it will simply lead to an even stronger drug being developed.

There can be no doubt that crystal meth is an extremely unpleasant drug. Crystal meth is highly addictive and one of the most dangerous of the illegal drugs to quit and has a high relapse rate. Users develop extensive neurological and physiological damage; one of the most debilitating and damaging of these effects is what is known as ‘meth mouth’ which results in the deterioration of the gum and teeth loss.

Despite its reputation and prevalence today, methamphetamine has been around since the nineteenth century in medicine and is still used in some medications today. But its use as a recreational drug is a relatively modern phenomenon. Why then, when there are less dangerous drugs with similar effects, is crystal meth even on the drugs market? The answer is that crystal meth is a creation of the drug war.

In Mark Thorton of the Ludwig Von Mises Institute's article, What Explains Crystal Meth?, he says:

…crystal meth is a cheap date; it has been referred to as the poor man’s cocaine. Cocaine and meth are both stimulants, so it is reasonable to assume that they appeal to the same subset of drug users. During cocaine’s heyday, meth was nearly extinct on the illegal market.’

However, during the drug war this changed as it became cheaper and safer for those who traded in cocaine to switch to a cheaper product. And so was born the drug we know today as crystal meth.

This is a pattern in other prohibitions. The prohibition of a substance does not eliminate demand, it only changes the nature of the market. During the prohibition of alcohol in the United States moonshine became a substitute for previously legal alcohol. Although having the same desired effect of alcohol before prohibition moonshine contained higher levels of toxins and was regarded as more dangerous previously available alcohol. Like many government policies, the prohibition of illegal drugs is motivated by good intentions. However, the unintended consequences have been disastrous with more potent and dangerous drugs entering the market.

The government should move towards a policy that allows for the free trade of substances that are currently prohibited – however brutal those substances are to their users. Such a policy, which moves towards total legalisation, would be effective in reducing crime and breaking the monopoly criminals have on the drugs trade, and reduce the tendency toward ever-stronger substances. A more realistic policy decision would be to move towards a system of decriminalisation as currently used in Portugal. A more liberal policy would allow for a safer environment for those who use the drugs, remove many stigmas currently attached to drug use, and make it easier for addicts to seek treatment.

For the first time, starting this month, Ofcom has allowed businesses to use product placements in British TV programmes. Businesses wishing to place their product must comply with Ofcom's rules, required under UK and European law, which include bans on the placement of not only alcohol, infant formula, foods high in fat, and cigarettes. Ofcom have decided that a good way to alert the British public of product placement is to insert a logo which will appear on the bottom of the screen to alert the viewers that a business has paid for their product to be placed in the program. While this move by Ofcom would strike many as fruitless, it is also betrays a worrying attitude towards the public and business.

Product placement is of course nothing new. Films through their history have been full of placed products that their producers have paid to be featured. The most recent James Bond film came under some criticism because of the favourable exposure Sony Ericsson received. Apple, Coca Cola and many car companies and fast food chains are known for the prominence of their products in films and television series. Many celebrities and athletes are paid millions of pounds to use or wear certain products. It’s hard to see why British TV viewers should be treated differently.

The objections raised to product placement assume that the public is too stupid or naive to notice when they are being sold something, and thus needs a government approved body to protect them. It also assumes that this agency will be competently run, which is a big assumption. But people can usually tell when they are being sold something. When someone sees advertising from Mercedes, Audi, Apple or Microsoft, they know that competing products and brands are being pitched to them.

That the advertising in question is being done via product placement is no different in principle to standard advertising: it is only the method that has changed. There is also, it seems to me, nothing wrong with someone buying Nike products because Roger Federer endorses them or buying Sony Ericsson phones because James Bond makes calls on them. Nor is there anything wrong with Nike paying Federer to endorse their products or for Sony Ericsson to pay United Artists for featuring their product.

The move by Ofcom should be reversed, as it is likely to annoy customers and make companies hesitant to invest as much money in product placement as they would were this decision not in place. Ofcom should also consider lifting the bans they have imposed on certain products, but being a government-created body bound by European law, I won’t get my hopes up.

The recent student protests and the threat industrial action have served as platforms for anti-market rhetoric. As we move into 2011 we should expect this rhetoric to become more common as well as more pronounced. Although some still deny the productivity and effectiveness of markets, even those who concede that markets are the most efficient economic system will often argue that they are immoral. Often we hear capitalism decried as an unnatural and cruel system that “makes the rich richer and the poor poorer” or exploits the underprivileged and unskilled. These moral accusations laid against markets require consideration.

Nevertheless, it is relatively easy to show that markets, and free markets in particular, are not only better economically but also morally, and should be embraced by those working towards a more equal and free society.

In discussing fairness in economics, it’s important to remember how rare and relatively new industrialized market economies are. In his book The Mind of the Market, Michael Shermer points out that if the last 100,000 years of human history were condensed into a twenty-four hour day, industrialized market economies would only account for 3.6 minutes. Shermer also shows that two hundred and fifty years ago the global average annual income was $200, while in 2008 the global average annual income was $6,600; Hans Rosling's presentation shows this dramatic shift especially well.

It is no coincidence that the last two hundred and fifty years which saw the rise of liberal market economies also saw an eventually global rise in wealth and a decrease in inequality. While there were undoubtedly other factors at work such as the suffragette and civil rights movements, together with advances in medicine the impact of markets on increasing wealth for everyone cannot be ignored. Indeed, many of the these advances would not have been possible without the development of a sizeable middle class, which only a market economy can create.

Throughout 2011 markets and choice will be attacked. Those who advocate 'fairness' will argue for limiting choice and increasing regulation. In preparation for the coming discussions and debates, free market advocates need not be apologetic about the history of markets, and the fairness and equality they enable.