Heroin addiction is a terrible affliction that levies great economic costs on society and causes tremendously poor longitudinal outcomes of those afflicted. Successful drug policy should focus on minimizing the amount of this drug used by society, educating people to lower heroin addiction rates in future generations and treating the already sick population. Heroin should remain criminalized if it would result in fewer first time users per year, fewer addicts, and/or less severely addicted addicts. Decriminalization of heroin would remove legal punishments for drug offenders, but would not go as far as legalization, which would eliminate all criminal penalties for the sale and distribution of heroin. Criminalization is a supply-side disincentive that increases the price of the drug. Some argue decriminalization would not increase heroin use and it would alleviate costs of enforcing the war on drugs. Some liken criminalization to alcohol prohibition; however, I disagree with this comparison as alcohol was used by a much larger proportion of the population and more of the economy was based upon its sale. I argue that the price of heroin being high is better for society than if the price of heroin were low, but the quality should also be high, as one would expect with greater competitive force. The social cost of legalizing heroin would outweigh the benefit.

Heroin is a synthetic opiate first synthesized in 1898. A German chemical company was trying to produce a drug that had the analgesic properties of morphine without its habit-forming profile morphine has always been famous for. In 1914 the Harrison Narcotics Tax Act was signed into law by Woodrow Wilson, which imposed a federal tax on a list of commercially sold opiates. In 1924 the US Congress banned heroin’s possession, sale, production, and importation. Heroin currently has schedule 1 status, meaning those caught in possession of heroin face hefty criminal charges. Proponents of decriminalization argue minorities, especially African Americans, are incarcerated for heroin possession at greater rates than whites, far out of proportion to their rates of usage. However I argue proponents of decriminalization overestimate costs of criminalization and underestimate increases in uses and social costs that use would bring caused by decriminalization.

Heroin decriminalization would reduce the cost of heroin, which would increase the amount purchased and used by addicts. In his economics article, Jeffrey Miron compared the prices of illegal cocaine with cocaine used in laboratories for biological research and the prices of illegal heroin with heroin used in laboratories for research. He found little difference in the price difference between cocaine-types, but noted a 13x difference between legal and illegal heroin in the United States. Miron, trying to estimate the effect of prohibition on cost, made some assumptions before arriving at this conclusion. The first is that heroin cycles into morphine in the cellular milieu before binding to the opioid receptor. He then noted that, “morphine is available from legal manufacturers for as little as $3.50 per gram in transactions of 100 grams. The price per gram for black market heroin transactions that are roughly 100 pure grams is $113. Assuming that heroin is three times as potent as morphine, this implies that black market heroin is 13 times the price of legal heroin.” [He cites this source Krivanek 1988, p106 for his 3x potency assumption]. The most important application of this information is in considering the effect of decriminalization on price. Decriminalization would mean possession under a certain amount would not carry any jail time, and dealers could sell with a smaller risk of arrest. With more suppliers in the market, the price would drop over time. Within two years of decriminalizing the drug, the same bag of heroin would either be less expensive or contain more of the drug.

Increased heroin use would result in more cases of full-blown addiction, more people in treatment and more drug-addicted newborns—among other costly consequences of increased drug use. There exists much debate in the economic community as to heroin addicts’ demand being ‘rational’ or ‘irrational.’ I am introducing a source that argues this demand is both highly elastic and rational. Note that rationality here is used to describe the extent to which an increase in salary corresponds to an increase in heroin purchased for each user. In their paper “Heroin Purchasing is Income and Price Sensitive,” Greenwald, Steinmiller and Roddy’s team interviewed 109 male and female heroin- dependent adults whose ages ranged from 18 to 55. In the first half of the interview, participants were asked about their usage habits. They were asked how much heroin they injected weekly, how frequently they purchased it, how far they travelled to purchase it, and how much it cost. The researchers then presented the participants with several hypothetical situations involving increasing their weekly income by 33%, decreasing it by an equal measure, increasing or decreasing arrest rates, or losing familial financial support. The researchers then used regression analysis to see how much given variables affected the four dependent variables, unit (heroin) purchases, heroin expenses/income, purchases/week, consumption/day. The most relevant finding from this study concerns the relationship between income on unit purchases and consumption. The researchers found that, “[h]igher monthly income was a significant predictor of a higher unit purchase, more purchases per week, and greater consumption (bags/day).” More generally, this study suggests that when heroin users have more income, they purchase and use more heroin. Similarly, if income were to remain constant but price were to drop enough, I would expect a similar pattern of increased usage. I submit this is simply my hypothesis and cannot back it up with empiric evidence; however, that does not preclude this statement’s empirical veracity, but rather that it is a difficult claim to test. I think it stands to reason that a heroin addict will purchase and consume more product when s/he has a greater amount of income relative to drug price, resulting in the long run in increased drug use, increased addiction, and greater occurrence of heroin-related social problems. I will argue that these costs likely outweigh or at least strongly challenge the argument that legalization would result in greater tax revenues. It also comes with graver social costs.

Researchers attempted to measure the cost of heroin for the United States. In this study, cost refers to the dollars spent treating direct and indirect problems caused by heroin. This is referred to in text as a “cost of illness study.” The researchers chose to not include so-called psychosocial costs of illness, which include poor lifetime outcomes and strained interpersonal relationships, as these costs are difficult to calculate objectively. The researchers estimated medical care, lost productivity, crime, and social welfare costs by first estimating the prevalence of heroin addiction by compiling information from American databases. The researchers’ “‘best guess estimate’ of the total cost of heroin addiction in the United States in 1996 is US$21.9 billion. Of these costs, productivity losses accounted for 52.6%, criminal activities 23.9%, medical care 23.0%, and social welfare 0.5%. Costs generated using the most and least conservative assumptions range from US$19.6 to 33.4 billion.” Based on these researchers’ estimates, the greatest cost of heroin was due to productivity losses. This type of loss occurs when a worker stops showing up to work or does not work as effectively while on the clock. Criminal activity was the second greatest social cost of heroin use, and a majority of these costs are those necessitated by a policy of criminalization. A proponent for decriminalization might argue one could eliminate these costs by simply ceasing to prosecute drug-related offenses. This argument underestimates the increase in use and subsequent medical bills that could follow such a policy decision.

In July 2001 policy decriminalizing all drugs was put into action in Portugal. In the following years data regarding Portugal’s drug use has been published by several national institutions. The effect of decriminalization on drug use in Portugal is widely touted as some of the strongest empirical evidence in support of this policy. However, I contend the data in these studies are not as strong as a proponent of decriminalization may claim. One may point to what happened to Portugal after decriminalizing all drugs and make two specious assumptions: 1) that decriminalization was the causative variable for those changes, and 2) that the same policy would have the same effect in America without considering any inherent differences between the countries, such as our healthcare systems. (USA-> not socialized). Hughes and Stevens investigated arguments on both sides of the Portuguese debate in their paper, “A Resounding Success or a Disastrous Failure: Re-Examining the Interpretation of Evidence on the Portuguese Decriminalisation of Illicit Drugs.” In his Cato Institute report, Glenn Greenwald analyzed data published by Portugal’s Institute of Drugs eight years after decriminalization. “Since Portugal enacted its decriminalization scheme in 2001,” Greenwald wrote, “drug usage in many categories has actually decreased when measured in absolute terms, whereas usage in other categories has increased only slightly or mildly.” Greenwald focused mostly on lifetime drug use of teens. “Cannabis use decreased from 10.4% to 6.6% among 7–9th grade (a 36% reduction) and from 25.6% to 18.7% among 10–12th grade students (a 27% reduction).” The slight to mild increase in drug use that Greenwald noted was in the adult population, where usage increased slightly for nearly every drug. Greenwald argued this increase in lifetime drug-use was representative of a general trend across EU nations. Pinto, on the other hand, contends the increases were ‘large.’ He cited cannabis as having a “50% increase for the 20–24 year age group between 2001 and 2007” (103). I’m not concerned with cannabis use; however, this data point is not indicative of the decriminalization lowers drug use narrative put forward by Greenwald. Hughes and Stevens contend there is evidence to support both claims that overall drug use went up and overall drug use went down. Hughes and Stevens explain the reason for the disparity is partially caused by using different databases, as at the time of the publication four sources of such information existed. Hughes and Stevens explained the increase in cannabis use as being consistent with an overall trend among European nations. Unfortunately, even with the data presented by the Portuguese government, it is difficult to gauge the extent to which drug use has actually increased. We see overall lifetime usage has gone up slightly. Lifetime usage among teens has gone down, but this does not necessarily tell us how much addicts are abusing the drug compared to before decriminalization. “For example, in 2008, Portugal had among injecting drug users the third highest rate of HIV (behind Spain and Latvia) and fourth highest incidence of new cases of HIV” (109).

Identifying causality in policymaking decisions is difficult because there are countless potential sources for error. The extent to which decriminalization resulted in the decrease lifetime drug use among teens as opposed to nationalized drug prevention programs cannot be fully elucidated. Thus I believe that data analysis of the Portuguese decriminalization efforts should be taken with a grain of salt.

Findings should not be generalized to the United States. Consider differences in cultural attitudes between western Europe and the United States. It is not uncommon for French youths to begin drinking alcohol in their early teens, yet they do not grow up as a generation to have rates of alcoholism as high as their United States counterparts. Furthermore, decriminalization itself does not lower injection related complications (HIV and hepatitis A infection). I’m not arguing prison sentences really stop heroin users from buying/injecting. I’m arguing without these penalties the market would be more saturated with product. The problem in this case is not the drug policy per se but instead the way in which the law is enforced. This enforcement disparity should be addressed via police reform. Portugal’s decriminalization laws were passed around the same time as a holistic addict care program so it is impossible to conclude the decriminalization laws are responsible for the marginal improvement in social problems caused by drugs. One could go as far as to argue that based on the efficacies of similar harm reduction programs that the addict care programs simply counterbalanced an increase in drug use caused by decriminalization.

In designing drug policy, the first priority is harm reduction to users in the short and long run followed by the cost of the policy choice. Those in favor of decriminalization have tended to generalize from the results coming out of Portugal, too readily assuming a similar policy would yield a similar result in a country with a very different healthcare infrastructure. Also this research contains a multitude of confounded variables and potential sources of errors to explain the decrease in overall drug use, not the least of which is harm reduction measures launched around the same time as decriminalization was put into effect. I argue the economic argument put forward by decriminalization advocates is not cogent because it overestimates the gains from tax revenues and underestimates the social cost of increased heroin use. I contend that despite this research on Portugal, decriminalization in the United States would increase heroin use in heroin users, which would result in greater social costs because their disease conditions would become more advanced. This is based on the presupposition that decriminalization will lower the street price of heroin, users will buy more heroin the greater their income relative to the drug price, and those who use more heroin will have more serious health complications longitudinally than would otherwise.

Works Cited

Hollersen, Wiebke. “‘This Is Working’: Portugal, 12 Years After Decriminalizing Drugs – SPIEGEL ONLINE.” Spiegel Online International, n.d. Web. 05 Aug. 2015.

Hughes, Caitlin Elizabeth, and Alex Stevens. “A Resounding Success or a Disastrous Failure: Re-examining the Interpretation of Evidence on the Portuguese Decriminalisation of Illicit Drugs.” Drug and Alcohol Review 31.1 (2012): 101-13. Web.

Mark, T. “The Economic Costs of Heroin Addiction in the United States.”Drug and Alcohol Dependence 61.2 (2001): 195-206. Web.

Miron, Jeffrey. “The Effect of Drug Prohibition on Drug Prices: Evidence from the Markets for Cocaine and Heroin.” National Bureau of Economics (2003). Web.

Roddy, Juliette, Caren L. Steinmiller, and Mark K. Greenwald. “Heroin Purchasing Is Income and Price Sensitive.” Psychology of Addictive Behaviors 25.2 (2011): 358-64. Web.

“14 Years After Decriminalizing All Drugs, Here’s What Portugal Looks Like.” Mic. Web. 06 Aug. 2015.