The conservative case for drug legalisation
Legalise drugs to reduce the deficit and restrict public use
I live near the notorious and infamous Bradford in West Yorkshire. In part due to drug and alcohol fuelled antisocial behaviour, I never venture into its city centre unless I'm taking the train out of there. There exists no reason to visit, unless one likes pawn shops or enjoys fighting on their nights out, and in part this antisocial behaviour drives customers out of the centre, exacerbating its issues. The forthcoming repeal of the Vagrancy Act will complete Bradford city centre's transition into the Skid Row of Yorkshire.
In particular, public drug consumption is so rife that I witnessed a couple smoking a joint outside Bradford's only shopping mall, in front of crowds of customers (some families with kids!). Rather than refer them to the police, the security guards allowed the smoking, and watched them as they smoked. An open secret is that drug possession for personal use is de-facto decriminalised in Britain. Virtually no one goes to jail for possession alone, unless involved in its supply. This begs the question though, why then bother legalising drugs? Surely we've hit a tolerable equilibrium, where we adopt the libertarian approach of not dictating what we put in our bodies, yet use criminalisation as an excuse (for private agents) to police the externalities associated with public consumption?
One case for legalisation is that quality improves. There exists asymmetric information in drug markets, with consumers not knowing the potency of their product. This was a ubiquitous feature of cocaine markets for a long time. Suppliers converged to a monopolistic competition with a markup set in part by diluting the product. Yet today, the average purity levels of street-seizures of cocaine now surpass 80%. The dark web is easy to use to get the pure product at similar prices, so street-level suppliers must compete with that. In other words, black markets already follow a structure of Bertrand competition. Arguably, government legalisation and regulation will actually reduce consumer surplus. Indeed, most leftists back legalisation just to get another market to tax and regulate to oblivion1. With cocaine now increasingly becoming a staple of British social and cultural life, it’s vital that the state is kept as far away from it as possible.
Hence, as a libertarian, I’m surprisingly ambivalent about legalisation. Perhaps in countries such as America, where there is a nonzero chance of going to jail just for personal use (particularly for black men), and their jails are overflowing with nonviolent drug users, ending the war on drugs makes sense. I find it particularly absurd that you can face years in prison just for being convicted of possessing paraphernalia, then violating probation on a positive drug test. Yet why should we import the American-themed discourse on this issue? An unregulated black market is surely a libertarian dream?
Not so fast. We spend millions fighting drug dealers. When we already face a looming debt crisis, we need to consider as many options for savings as we can get. Hence, the fiscally conservative case for legalisation is compelling. We can even divert some of the funds we spend trying to catch dealers towards driving the smackheads as far out of public sight as possible. To the extent that the government or local authorities own land, they must enforce their property rights on that land, therefore the state has a moral obligation to eradicate public drug use on its streets. Any other solution erodes the very idea of property rights, setting a bad precedent. This is before we get to the externalities surrounding antisocial behaviour, used needles being littered, and even the pungent smell of cannabis.
UPDATE (02/06/2026): Perhaps the most interesting question relating to legalisation is how norms will shift. Yes norms will change. I think most of those arguing for legalisation are in denial - drug consumption will be expected to increase, and it’s important to consider the tradeoffs here. We know that some particularly weak individuals whom struggle to resist temptation or “peer pressure” are harmed: think of those migrating to harder drugs, or those whose lives have been ruined by addiction. Our current abstinence norms (outside a few subcultures) raise the search costs to acquisition, yet this isn't always individually-rational or incentive-compatible, so to enforce this equilibrium we impose stigma as a penalty for deviation.
Of course, drug use tends to be correlated with “loserdom” (the question as to what proportion of this is causal vs selection remains open), so in part this stigma reflects a real signal. However, some drug consumption amongst some individuals can be expected to complement their cultural consumption and hence actually increase their human capital. I suspect this is disproportionately true for high-IQ individuals. Plus for those prone to criminality (whom are also more impulsive than average), some drugs present a socially valuable outside option in that they substitute for violent crime. Violent crime has plummeted throughout the last few decades whilst opioids have increased in popularity. I don't think this is a coincidence: to the extent that opioids are substitutes for alcohol, and present early mortality risk for those who might otherwise be committing crime, they should be expected to promote crime reduction by sedating the antisocial. Acquisitive crime rises in the short-run, but addicts are disproportionately antisocial so many are likely to engage in theft in the absence of drugs anyhow, and again increased mortality risk mitigates this rise. Therefore, we cannot state for certain that the socially or individually optimal level of drug consumption is zero.
What we can state with high confidence is that this stigma is uncorrelated with total social or present-valued lifetime private costs, as I explained in my earlier post on rational addiction. Then I attributed such to the stigma instead reflecting adjacent complementarities, which makes sense when we consider it a tax for deviating from an abstinence equilibrium; more likely to be socially optimal the more addictive a drug is. However, consider the public choice element of prohibition. Alcohol has been present in Western society for centuries. Cannabis, cocaine, and opiates originated in different climates to those of Western Europe and North America, so arrived to the party only after we started exploring the New World. Hence the alcohol industry had more time to invest in lobbying, and this in tandem with cultural norms on drinking already being mature and well entrenched contributed to a relatively swift reversal of prohibition. Arguably, one can consider the war on drugs to be protection for the alcohol industry.
By ending this protection and establishing a free market in intoxication, society will converge to more efficient norms and cross-subsidisation of cultural life. This to me is the strongest case for legalising drugs. Alcohol consistently ranks as one of the most dangerous in its social and private costs, and there is no compelling reason why other drugs shouldn't be able to compete on a level-playing field.