The First Rule of Good Business: Don't Kill Your Customers

by Don Boudreaux on April 14, 2009

in Cooperation, Crime

Here's a letter that I sent a few weeks ago to the New York Times:

While in Mexico, Secretary of State Hillary Clinton will pledge
U.S. help in the fight against violent Mexican drug suppliers ("Clinton
Says U.S. Feeds Mexico Drug Trade," March 26).

It's interesting
to reflect that when Mrs. Clinton visits France she need not pledge
U.S. help in the fight against violent French wine suppliers.  Or that
when she visits Belgium she need not pledge help against violent
Belgian chocolate suppliers.  Or that when she visits Colombia she need
not pledge help against violent Colombian coffee suppliers.  Or that
when she visits Japan she need not pledge help against violent Japanese
automobile suppliers.

I detect a pattern!  When goods and
services can be produced, sold, and consumed legally, suppliers of
these goods and services are peaceful and not violent.

Sincerely,
Donald J. Boudreaux

Comments

{ 43 comments }

Daniel Kuehn April 14, 2009 at 9:49 am

A point of agreement!

Daniel Kuehn April 14, 2009 at 9:50 am

Although to be the consistent dissenter, I get the impression they're killing their competitors more than their customers… but they're killing because the price is so high because the supply is restricted – the main point of agreement remains :-D

Daniel Kuehn April 14, 2009 at 9:54 am

Don -
Out of curiosity, what do you think of legalizing hard drugs? I'm unequivocal on marijuana, but I'm never sure how convinced I should be about the "public safety/health" argument about hard drugs. Opiates seem pointless to criminalize, but I'm not sure what to think about something like cocaine.

Will April 14, 2009 at 10:11 am

Their products, what are now illegal hard drugs, however, would still be lethal, like cigarettes, but much worse.

Don Boudreaux April 14, 2009 at 10:24 am

I support the legalization, for adults, of all substances.

mjh April 14, 2009 at 10:39 am

Intellectually, I agree with this sentiment. The war on drugs has caused FAR more harm than good.

But I still hesitate because I think drug usage is a really bad idea. And while I think legalizing drugs is the right answer, I can't help but feeling like I'm handing a loaded gun to a toddler and asking him to be careful.

Methinks April 14, 2009 at 10:53 am

mjh,

I know how you feel. I've never taken any drugs at all and I'm very much against taking drugs in general. However, I've never known anyone who has had a problem obtaining them when they wanted them. The loaded gun already exists and it's more dangerous because of the war on drugs. I see no reason to waste trillions of dollars of other people's money and countless lives in pursuit of a salve for my personal moral conflicts.

Gil April 14, 2009 at 10:55 am

I agree with mjh.

David April 14, 2009 at 11:27 am

Spot on.

For those who are against taking drugs or think usage is a really bad idea- Make that judgment for yourself and avoid narcotics. But do not support prohibition simply to foist your morals on other free individuals. That moral judgment should be personal, no?

Any adult who wishes to use drugs can get them rather easily. I'm reasonably certain that at least a majority of non drug users do so out of a sense of self preservation and a fear of adverse health affects rather than a fear of a slap on the wrist from Uncle Sam.

Prohibition has done far more good than bad. Not only has it driven up the costs and driven down the quality of available narcotics resulting in myriad unnecessary illnesses/deaths, but as Professor Friedman taught us, in a society that prohibits a substance, the role of the prohibiting government is actually to protect the interests of the large cartel by systematically targeting the "easy" marks, the small and middle size dealers and suppliers who do not possess the cartels' resources and are unable to avoid detection/prosecution.

Daniel Kuehn April 14, 2009 at 11:32 am

David -
RE: "But do not support prohibition simply to foist your morals on other free individuals. That moral judgment should be personal, no?"

I don't think anybody is caught up in the drug war rhetoric – we all seem to realize that legalization is key. The hesitation on harder drugs isn't an issue of forcing morality on other people – it's an issue of the public danger that that drug use may represent.

And perhaps it's nothing to worry about and mjh, Methinks, Gil, and I (quite a motley group) are getting sucked into the same "reefer madness" lies about hard drugs that were used with regard to marijuana when it was first criminalized. Maybe we are wrong – but we're definitely not arguing on the basis of "legislating morality".

David April 14, 2009 at 11:56 am

What public danger do you propose will exist upon legalization that doesn't exist currently?

Daniel Kuehn April 14, 2009 at 12:04 pm

David –
I'm not proposing anything. I'm quite clearly confessing ignorance but unease. My understanding is it's associated with paranoia and increased aggressiveness (which is why I say I see know reason for criminalizing opiates, which obviously don't cause aggressiveness).

You really shouldn't be so patronizing to people that express these reservations. You're really not revealing something we're unaware of when you talk about things like the value of personal choice and the problems with legislating morality.

David April 14, 2009 at 12:13 pm

I honestly wasn't being patronizing, I was concerned there was an issue underlying your argument that I wasn't detecting.

yet another Dave April 14, 2009 at 12:21 pm

It's very hard to predict the short term affect if all drugs were suddenly legalized, but cocaine was legal and very popular in the US 100+ years ago.

I doubt very much we'll ever find out. Legislators that support legalization will likely be intimidated into silence (or worse) by the violent criminals that profit from prohibition.

Kevin S. April 14, 2009 at 12:35 pm

Will: "Their products, what are now illegal hard drugs, however, would still be lethal, like cigarettes, but much worse."

Surely you're not suggesting more poeple die from ingesting illegal drugs than from cigarettes, are you?

Methinks: "I've never taken any drugs at all and I'm very much against taking drugs in general."

That's a personal choice and agree, but I would qualify that statement with "in their present potency and poor quality control." Isn't it likely that hard drugs come in highly concentrated forms because it makes concealment and transport easier. Does anybody think that if hard drugs were legal that a market would not emerge that offered a variety of potencies that had a high degree of quality control? Remeber cocaine used to be present in Coca Cola.

Yes highly concentrated drugs cooked up by some idiot in his garage likely involve a relatively high degree of risk. But like alcohol, I see no reason that these so-called hard drugs would not be offered in a variety of products and strengths.

Sam Grove April 14, 2009 at 12:47 pm

Here is an online version of The Consumers Union Report – Licit and Illicit Drugs.

They found that prohibition tended to lead to higher concentration, and adulteration, of prohibited drugs.

The report covers many recreational drugs including caffeine, nicotine, and alcohol.

The worst problems seem to stem from the addicted struggling to obtain relief from withdrawal symptoms. Also, many with expensive habits often have no money or interest for personal maintenance.

The illicit status of drugs that "crank up" reactions is likely to increase paranoia.

S Andrews April 14, 2009 at 1:09 pm

he hesitation on harder drugs isn't an issue of forcing morality on other people – it's an issue of the public danger that that drug use may represent.

I am not sure that, danger, if any, will be more than what exists from the on going war on drugs.

jb April 14, 2009 at 1:12 pm

while it is morally consistent to advocate a "zero tolerance" policy for drug laws (as in, all drugs should be legal), the politically expedient strategy is to focus on the most commonly used, least harmful drugs and legalize those first, to demonstrate that the world is a better place afterwards.

We need to win a few battles before we win the war.

stickrouse April 14, 2009 at 1:16 pm

The following is from a paper by Micheal Huemer, America's Unjust Drug War.

"At least one of these alleged harms—dangerous driving—is clearly the business of the state. For this reason, I entirely agree that people should be prohibited from driving while under the influence of drugs. But what about the rest of the alleged harms?

Return to our hypothetical citizen Howard. Imagine that Howard—again, for reasons having nothing to do with drugs—does not value freedom, nor does he embrace personal responsibility. It is unclear exactly what this means, but, for good measure, let us suppose that Howard embraces a totalitarian political ideology and denies the existence of free will. He constantly blames other people for his problems and tries to avoid making decisions. Howard is a college student with a part-time job. However, he is a terrible student and worker. He hardly ever studies and frequently misses assignments, as a result of which he gets poor grades. As we mentioned earlier, Howard comes to work late and takes no pride in his work. Though he does nothing against our current laws, he is an inattentive and inconsiderate spouse and parent. Nor does he make any effort to participate in the life of his community, or the promise of America. He would rather lie around the house, watching television and cursing the rest of the world for his problems. In short, Howard does all the bad things to his family, friends, coworkers, and society that the ONDCP says may result from drug use. And most of this is voluntary.

Should Congress pass laws against what Howard is doing? Should the police then arrest him, and the district attorney prosecute him, for being a loser?"

The rest can be found here…

http://home.sprynet.com/~owl1/drugs.htm

It's not that long but imho very well written.

Methinks April 14, 2009 at 1:16 pm

Legislators that support legalization will likely be intimidated into silence (or worse) by the violent criminals that profit from prohibition.

Oh, like their fellow legislators? :-)

Kevin, I wouldn't qualify my statement. Reliance on drugs is an ugly thing and I've seen too many lives destroyed by them – not because they are illegal or because people got hold of bad stuff either. But, that's a personal issue and one I have no right to impose on others through legislation.

Besides, I don't need drugs to increase my aggression and paranoia. Politics does the job brilliantly.

BoscoH April 14, 2009 at 1:17 pm

Just wait for them to outlaw software. Or caffeine.

atidd April 14, 2009 at 1:20 pm

I agree that the violence is probably directed more at the drug suppliers' competitors more than customers. But as in every other war, there are so many innocent victims caught up in the violence. By the way, I wouldn't necessarily call all French wine suppliers peaceful, though this is a product of protectionist policies.

http://www.time.com/time/world/article/0,8599,1828722,00.html

Daniel Kuehn April 14, 2009 at 1:34 pm

RE: "Just wait for them to outlaw software. Or caffeine."

If caffeine is ever outlawed I will probably become a full-fledged Cafe Hayek libertarian.

No, scratch that… I'll probably still be sleeping.

Sam Grove April 14, 2009 at 1:35 pm

Reliance on drugs is an ugly thing and I've seen too many lives destroyed by them – not because they are illegal or because people got hold of bad stuff either.

You might consider that some of their problems stem from results of prohibition, such as exorbitant prices. This is particularly a problem with addictive drugs.

It was once believed by many that heroin made addicts crazy, now we know that it is withdrawal that does this.

Methinks April 14, 2009 at 2:00 pm

You might consider that some of their problems stem from results of prohibition, such as exorbitant prices.

I don't follow. Alcohol is legal and people who become alcoholics still have trouble functioning.

Kevin S. April 14, 2009 at 2:47 pm

"…people who become alcoholics still have trouble functioning."

I suupose that depends on your definition of "alcoholic." Alcoholics, by definition, are unable to function normally using the common usage of alcoholic. If you are using MADD's defnition, it would include another larger group of poeple who drink several drinks on a daily basis but otherwise function normally and may be addicted.

Addiction does not always equal abnormal functioning. Prohibition has led to high prices, as Sam says, but has also led to poor quality and potent formulas, which have excerbated the addiction and abnormal functioning problems that you would normally see in an open market.

Daniel Kuehn April 14, 2009 at 2:49 pm

Methinks -
I think that's why he said "some of their problems". Alcoholics still have problems – but alcohol providers don't shoot each other down in the streets, and alcoholics themselves don't rob houses to pay for their addiction. These negative effects are largely caused by the prohibition of drugs… and while I'm still leery of legalizing hard drugs, I would agree that if we did, a lot of these issues (shootings, street gangs, drug related robbery, etc.) would go out the window. Does that make it worth doing? That I'm more ambivalent on.

Daniel Kuehn April 14, 2009 at 2:50 pm

Methinks -
Think of Al Capone! It doesn't take long for prohibition to exascerbate things. And that's alcohol.

Baughman April 14, 2009 at 2:51 pm

I also detect a pattern: the consumption of illegal drugs is less than the consumption of French wine, Belgian chocolate, Colombian coffee, Japanese automobile suppliers.

Whether the costs associated with use/law enforcement of illegal drugs is worth the cost (i.e. deterrent to potential users) is another question entirely. You'd be foolish to believe that there are no benefits to making drugs illegal.

Kevin April 14, 2009 at 3:30 pm

the consumption of illegal drugs is less than the consumption of French wine, Belgian chocolate, Colombian coffee, Japanese automobile suppliers.

A bit of a tautology, but there is no evidence that the well-being of modern humans is anticorrelated with the use of illegal drugs. Accordingly, I don't think it's reasonable to assume that a lower frequency of use of illegal drugs is a benefit.

Methinks April 14, 2009 at 4:29 pm

I think that's why he said "some of their problems". Alcoholics still have problems – but alcohol providers don't shoot each other down in the streets, and alcoholics themselves don't rob houses to pay for their addiction.

Whether they rob houses to feed their addiction is debatable. Do you have any data on this? I suspect people are rather inclined to do anything to feed addictions to controlled substances.

The quote from me that Sam was responding too clearly said that the people whose lives were destroyed were not destroyed because the drugs were illegal. That clearly implies that they didn't get into a shooting match in the street (although, my next door neighbour in college was killed while buying drugs). Rather, these people had a shooting match with their veins.

I also know the son of an anesthesiologist who was so addicted to the meds he administered to his patients that he finally overdosed on them and died. The stuff he was taking was not cut by some idiot in a back alley. So, I'm not referring to the effects directly associated with prohibition.

Kevin, I guess the definition I'm using is falling down, passed out drunk because you just can't cope with life. I'm not talking about the habitual nightly 4 oz. of wine with dinner that doesn't leave one in an altered state and one wouldn't miss if one forgot to pour the wine from time to time. Drug addicts and alcaholics often get to a point where they can't live anything resembling a normal life or at least they get to a point where they are seriously impacting their health and their relationships.

That said, please don't mistake my personal distaste for the stuff as a call to ban it. My prejudices are my own and if someone wishes to get drunk, socially smoke pot or slowly kill themselves with heroin, my desire to interfere with that activity starts only once that person gets behind the wheel of a car.

Esox Lucius April 14, 2009 at 4:41 pm

At the tender age of 38 I bought my first bag of dope. My neighbor had (past tense, unfortunately) terminal cancer and I got it for him so he could continue to eat. Strangely it coincided with my first run for public office. It took me exactly 1 call to find a guy who knew a guy. $35 got me a sandwich baggy of pot. Having never done that before, it strikes me as futile to try to stop it. If I can do it, anyone can. I was so incensed that it was illegal, words cannot describe. I couldn't believe that I could go to jail for an act of kindness.

Sam Grove April 14, 2009 at 5:04 pm

I don't follow. Alcohol is legal and people who become alcoholics still have trouble functioning.

Of course.

Be it known that alcohol is possibly the worst recreational drug in this regard. It's like chemical Alzheimer's.

Kevin April 14, 2009 at 6:51 pm

I'll try not to double post this time.

Methinks, I know what you are saying. My only point was about the limits of our knowledge. We have evidence only of what some intoxicants can do to individuals, and we do not know if as a group modern humans would be happier on balance if they could freely use illegal drugs. And that really wasn't even my axe to grind – I wrote the whole thing as a response to Baughman's assertion that less drug use is by definition beneficial, which I found unreasonable.

AMATI NONYMUS April 14, 2009 at 7:09 pm

"
legally, suppliers of these goods and services are peaceful
"

What a stymie! I just can't come up with the perfect solution, a way to outlaw drugs but simultaneously legalize the selling of lethal overdose which is carefully mislabeled as being watered down.

stickrouse April 14, 2009 at 7:45 pm

"If caffeine is ever outlawed I will probably become a full-fledged Cafe Hayek libertarian." -Daniel Kuehn

Daniel you show your true colors. So it's ok for the government to meddle in people's lives as long as they don't come knocking at your door?

seanooski April 14, 2009 at 9:34 pm

Making drugs illegal is a market distortion that has repercussions few of us care to ponder. It makes them more expensive, less reliably dosed, for starters. It causes violence between rival dealers and from addicts who must steal to feed their addictions. Rival dealers and/or defrauded customers have no legal recourse against the cheats, so they have to break legs.

Worse than all that however is what it does to a society based on the rule of law. It breeds resentment of unjust law, and contempt for all law. It creates more opportunities for official coruption. It makes criminals of otherwise productive citizens. It puts innocent bystanders in the crosshairs of not just criminals, but overzealous law enforcement. It has broken down our civil liberties in irreperable ways. It has created an entrenched law enforcement/incarceration lobby that benefits from the continued hysteria concerning drug use.

Prohibition also destroys great ammounts of wealth through taxation to fund enforcement, loss of productive citizens to the prison system, through misguided propaganda campaigns, etc. Marijuana is California's number one cash crop! How absurd that anyone thinks we can win this war on drugs.

However, I don't believe our society will ever legalize any drugs, because the status quo is useful to too much of the political establishment. But people will continue to use drugs, just as they have since the dawn of man.

TrUmPiT April 15, 2009 at 12:27 am

If cigarettes, marijuana and alcohol should be legal, and guns should be legal, it should be legal to shoot smokers who dare to smoke anywhere near my breathing space, likewise for pot smokers who dare to light up anywhere near my breathing space, and drunk drivers who have the audacity to drive drunk putting my life at risk. What good is a gun if you can't use it to protect your own lungs and life. Sorry for the longwinded sentence at the onset, but I'm too tired to fix it. Maybe you think I should be shot for writing it. Is that because you disagree with my "moral sentiments" or because you are a stickler for well-formed sentences? It took me 6 or 7 tries to pass the required college English class in order to graduate. I believe mindless tv and the lack of reading as a child were very destructive to me as I grew up and I tried to get a decent college education.

Why did I need English, my mother tongue, and I resented having to prove I was literate (which I wasn't); that's how I felt about it then. English classes should be optional even for English majors. Take French, Spanish, or Italian and study their language and literature in the original tongue. English is an unnecessary encumbrance to overcome by all means necessary, even by lethal armed force. Shakespeare is the work of the devil, and like Huck Finn, should be banned in public school. Let the kids smoke the evil weed during American Lit. class instead. Sam Coleridge wrote the fab poem Kubla Khan while high on opium. Why shouldn't we encourage writers and lyricists to use drugs to help them become more creative? That goes double for econ students. Economists on Drugs sounds like the title of Russ's next book, or was that the secondary title of his last? We really don't speak English anyway; we speak "American," and we do it without a proper English accent. I, for one, prefer it that way. Those Brits sound so damn affected to me; shoot them, too!

brotio April 15, 2009 at 2:15 am

"You really shouldn't be so patronizing to people that express these reservations. You're really not revealing something we're unaware of when you talk about things like the value of personal choice and the problems with legislating morality." – D Kuehn

Daniel,

I was going to let that pass, but then I remembered a post of yours on another thread that accused most of us of being rude to you. Now, if we challenge you, we're patronizing. I think maybe your skin is a little thin?

BTW: In case you missed it, David replied to your comment I quoted above with this:

"I honestly wasn't being patronizing, I was concerned there was an issue underlying your argument that I wasn't detecting."

Some people here are more blunt than others, but you've chosen to be the defender of the State in a Cafe full of people who aren't all that affectionate toward the State, so expect to be ganged-up on. But, as long as you refrain from Gil's intentional obtuseness, I'll try and remember to be polite :p

vidyohs April 15, 2009 at 7:12 am

"Should Congress pass laws against what Howard is doing? Should the police then arrest him, and the district attorney prosecute him, for being a loser?"

Posted by: stickrouse | Apr 14, 2009 1:16:40 PM"

Damn stickrouse, I was reading your post and I thought you were describing a socialist, then you brought drugs into it.

Oh well, wasn't it Marx that said, "Socialism is the opiate of the stupid."

Here is where I diagree with Don et. al., I think that any adult that consumes a full dosage of socialism, and/or offers same to a minor, should be dragged down to the ditch at the back of the lower 40 acres, shot between the eyes and rolled into the ditch. There is no natural or rational justification for mind altering substances such as socialist scripture, the weak minded just can't handle it.

Randy April 15, 2009 at 9:10 am

We can't have both unrestricted drug use and a welfare state. Personally, I would legalize the first and criminalize the latter.

Will April 15, 2009 at 1:39 pm

Kevin:

I do think you are imagining only one of many possible futures if drugs were legalized. You imagine responsible companies coming up with feel good low side effect drugs. I can just as easily imagine current drugs being supplied at their current potencies and imperfections in greater amounts by the same people who supply them now. There is a reason why alcohol and cigarettes are the most used and abused drugs, it is because they are cheapest and most available. I know personal responsibility is a big deal in these comments, but if lots more people start getting hooked on heroine and meth in my community, it becomes my responsibility to pay for their incarceration, health treatment, and make up for the tax dollars they have stopped contributing when they stopped being a functioning member of society.

vidyohs April 18, 2009 at 9:31 am

Will,

Why do you believe this is true?

"but if lots more people start getting hooked on heroine and meth in my community, it becomes my responsibility to pay for their incarceration, health treatment, and make up for the tax dollars they have stopped contributing when they stopped being a functioning member of society.
Posted by: Will | Apr 15, 2009 1:39:04 PM"

It is beyond my imagination that a sane person would believe that.

Nature has a way of culling the gene pool and it isn't to our credit that we have short circuited that process.

Witness, here in Houston in the early 90s, an 18 year old young man, along with several others, visiting a friend saw a 9mm automatic on the bed stand. He picked it up, jacked the slide, put it to his head and said, "Let's play Russian Roulette", whereupon he pulled the trigger.

Even in our heavily smothered nanny state culture, nature finds a way to cull the gene pool. We would do better to stand aside and let the process work.

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