Mexico has recently passed legislation that would decriminalize drug possession; including marijuana, heroin, cocaine, opium and several other recreational drugs. In conjunction with this liberalization they are going to impose stiff penalties on individuals caught dealing drugs. (which makes little sense to me, how can it be ok to buy drugs but bad to sell them?) Jeffery Miron and Rough Ol’ Boy both seem to think this is a positive development. I’m more than a little skeptical.
I think that decriminalization will end up increasing the rate of violent crimes. By increasing demand and increasing the costs of supply (via harsher penalties for getting caught) competition will become violent as suppliers seek to maximize short term profits to hedge against long term incarceration.
The sad thing is that people that do not understand the economics behind it (which, honestly, as to be most of American correct?) will use this anecdotal evidence as rationalization of continuing the War On Drugs.
This short term gain will end up resulting in long term failure for liberalization of drug laws in the US.
Update: Don at Cafe Hayek takes the opposite view.
Update: But Patri at Catallarchy agrees with me.
Another Update: Professor Bainbridge is reporting that US meddling has caused Mexico to question its stance on decriminalization.