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Legalize and Deregulate for Innovation

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Challenges in Classical Liberalism

Part of the book series: Palgrave Studies in Classical Liberalism ((PASTCL))

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Abstract

Prohibiting or heavily regulating alcohol, tobacco, and drugs leads to underground markets. We argue that most of the negative effects of illicit drugs stem from their prohibition. Legalizing these substances may increase use but also improve a range of public health outcomes including reduced violence and corruption, improved product quality, and fewer opportunities for disparate harm to minority communities. High regulatory burdens and tax rates also lead to illicit markets in alcohol and tobacco. Deregulating and lowering (or removing) taxes on alcohol and tobacco similarly would shift consumption and production into legal markets, avoiding the harms associated with underground markets. Entrepreneurs in these markets currently devote their efforts to avoiding enforcement and the regulatory regime. A shift to free markets in alcohol, tobacco, and drugs would allow innovators to focus on the types of products consumers prefer, improving drug safety and quality.

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Notes

  1. 1.

    Controlled Substances Act 21 U.S.C. § 812.

  2. 2.

    State laws from Marijuana Policy Project (2021a, b, c).

  3. 3.

    See also Colorado Department of Revenue (2021).

  4. 4.

    The seventeen control states are Alabama, Idaho, Iowa, Maine, Michigan, Mississippi, Montana, New Hampshire, North Carolina, Ohio, Oregon, Pennsylvania, Utah, Vermont, Virginia, West Virginia, and Wyoming. Mississippi, New Hampshire, Pennsylvania, and Wyoming also control the sale of wine (National Alcohol Beverage Control Association 2020).

  5. 5.

    On narcotics, see Solis (2018). On cigarettes, see Michalopoulos S (2016).

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Authors and Affiliations

  1. Western Carolina University, Cullowhee, NC, USA

    Angela K. Dills

  2. Harvard University, Cambridge, MA, USA

    Jeffrey A. Miron

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  1. Angela K. Dills
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  2. Jeffrey A. Miron
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Correspondence to Angela K. Dills .

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Editors and Affiliations

  1. Business & Economics Department, Roanoke College, Salem, VA, USA

    Alice L. Kassens

  2. Business and Economics, West Virginia University, Morgantown, WV, USA

    Joshua C. Hall

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Dills, A.K., Miron, J.A. (2023). Legalize and Deregulate for Innovation. In: Kassens, A.L., Hall, J.C. (eds) Challenges in Classical Liberalism. Palgrave Studies in Classical Liberalism. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-32890-9_14

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  • DOI: https://doi.org/10.1007/978-3-031-32890-9_14

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