The War on DrugsThe War on DrugsAndAnd

The Economics of The Economics of IncarcerationIncarceration

By: Marc FevryBy: Marc Fevry

The War on The War on DrugsDrugsAndAndThe The

Economics of Economics of IncarcerationIncarceration

The United States has the highest The United States has the highest incarceration rate in the western world. It is incarceration rate in the western world. It is four times of the United Kingdom and France four times of the United Kingdom and France on a per capita basis. (Barrett & Greene on a per capita basis. (Barrett & Greene 1989) “The inmate population in 1996 grew 1989) “The inmate population in 1996 grew by 1, 900 prisoners per week. One out of by 1, 900 prisoners per week. One out of every 155 U.S. residents was behind bars, every 155 U.S. residents was behind bars, putting this country only second to Russia in putting this country only second to Russia in it’s per capita rate of incarceration, according it’s per capita rate of incarceration, according to criminologist.’ (Patlick)to criminologist.’ (Patlick)

My paper is an attempt to document the facts about the war on drug’s beginning and to trace the economic effects of three decades of this issue. It is also an attempt to analyze it using basic economic principles to explain its continued manifestation.

Economic Theory:Economic Theory: The three economic principles The three economic principles

used to examine the effects of the “war used to examine the effects of the “war on Drugs” are scarcity, gains from on Drugs” are scarcity, gains from trades, and supply and demand. This trades, and supply and demand. This analysis is intended to raise such analysis is intended to raise such questions as “ do governments policies questions as “ do governments policies create economic market of it’s own? create economic market of it’s own? Or, do the same economic principles Or, do the same economic principles explain government behavior? Do any explain government behavior? Do any of these economic principles explain of these economic principles explain how bad polices continue with very how bad polices continue with very little or empirical evidence of success?little or empirical evidence of success?

Social economic cost of the Social economic cost of the war on drugs:war on drugs:

The U.S war on drugs is big business – a The U.S war on drugs is big business – a multi-billion dollar public/private venture that multi-billion dollar public/private venture that radically inflates the value of illegal drugs and is radically inflates the value of illegal drugs and is used to criminalize the poorest people of color, used to criminalize the poorest people of color, trapping them in a cycle of addiction, trapping them in a cycle of addiction, unemployment and incarceration:unemployment and incarceration:

$ 27 billion for interdiction and law enforcement$ 27 billion for interdiction and law enforcement $1.3 billion for plan Columbia in 2000$1.3 billion for plan Columbia in 2000 $9.4 billion in 2005 to imprison close to 500,000 $9.4 billion in 2005 to imprison close to 500,000

people convicted of non-violent drug offenses, 75 people convicted of non-violent drug offenses, 75 percent of whom are blackpercent of whom are black

$80 to $100 billion in lost earnings$80 to $100 billion in lost earnings Untold billions in homeless shelters, healthcare, Untold billions in homeless shelters, healthcare,

chemical dependency and psychiatric treatment, chemical dependency and psychiatric treatment, etc.’etc.’

Drug dependence in the inner cities and Drug dependence in the inner cities and among teenagers has continued to increase among teenagers has continued to increase substantially. And the drug problem substantially. And the drug problem continues to produce massive amounts of continues to produce massive amounts of crime, 20 billion in annual medical cost, crime, 20 billion in annual medical cost, one-third of all new HIV infections, prisons one-third of all new HIV infections, prisons are filled with drug related offenders By all are filled with drug related offenders By all accounts thus far we have been unable to accounts thus far we have been unable to spend and jail our way out of this problem.” spend and jail our way out of this problem.” (Blumenson & Nilsen 2000). (Blumenson & Nilsen 2000).

In the chart that follows below, the In the chart that follows below, the question is asked whether drug crimes question is asked whether drug crimes are in the top three reasons for are in the top three reasons for incarceration today and the increase or incarceration today and the increase or decrease in black inmate prison decrease in black inmate prison population from 1990 to 2000 in the population from 1990 to 2000 in the sixteen states surveyed in Christopher's sixteen states surveyed in Christopher's keton’s report to the southern keton’s report to the southern legislative conference. It also list what legislative conference. It also list what percent of totals prison population is percent of totals prison population is black.black.

Sixteen Southern States black population percent 2005Sixteen Southern States black population percent 2005 Top3 1990 2000 %of total Prison Top3 1990 2000 %of total Prison

Population BlackPopulation Black Ala yes 28.7 34.7 64Ala yes 28.7 34.7 64 Ark yes 7.71 26.43 50.3Ark yes 7.71 26.43 50.3 Fla yes 24.434 17.9 54Fla yes 24.434 17.9 54 Ga no 16 16 69Ga no 16 16 69 Ky yes n/a Ky yes n/a

33.633.6 La yes 16 14 75.6La yes 16 14 75.6 Md yes 10.59 23.32 78Md yes 10.59 23.32 78 Ms yes 15 15 72.29Ms yes 15 15 72.29 Mo yes 12.24 20.99 42.5Mo yes 12.24 20.99 42.5 Nc yes 31 31 62.74Nc yes 31 31 62.74 Ok yes 17.9 24.53 32.8Ok yes 17.9 24.53 32.8 Sc yes 20 20 68Sc yes 20 20 68 TN yes 14.5 17.11 52TN yes 14.5 17.11 52 TX yes 18.75 25.02 43.3TX yes 18.75 25.02 43.3 VA yes 15.15 12.2 66.2VA yes 15.15 12.2 66.2 Wv no 7 7 16Wv no 7 7 16 Fiscal Affairs and government operations committee report 2005 Fiscal Affairs and government operations committee report 2005

(Keaton)(Keaton) Council of state Governments.Council of state Governments.

During my research I feel certain that further During my research I feel certain that further analysis would show these high rates of analysis would show these high rates of incarcerations are directly correlated to the incarcerations are directly correlated to the number of prison cells built in the last thirty number of prison cells built in the last thirty years and not supported by population or years and not supported by population or crime rate increases.crime rate increases.

Whether Democrat or Republican, it is Whether Democrat or Republican, it is time for the leadership on all levels of this time for the leadership on all levels of this federalist system to step up to the plate and federalist system to step up to the plate and make the hard choices that will slow and make the hard choices that will slow and eventually end this bad public policy. We have eventually end this bad public policy. We have proved if nothing else by billions of dollars proved if nothing else by billions of dollars spent, that we will never jail our way out of spent, that we will never jail our way out of this problem. In economic terms we are no this problem. In economic terms we are no closer to equilibrium than we were thirty years closer to equilibrium than we were thirty years ago ago