From an Economic Standpoint
After the recent 2012 United States Presidential Election, whereupon Colorado and Washington passed the policy to legalize marijuana for “adult purposes,” government officials faced conflict as to whether to legalize the drug on a federal level or not (Smith 1). There is a battle between the Supreme Court and federal government regarding enforcement as state law allows production and consumption of the drug while the federal law prohibits such activities. When a state officer finds marijuana on the persons of a Colorado resident, there is no charge; however, when a federal officer finds marijuana on the persons of a Colorado resident the extent of the penalty could be arrest and incarceration. Due to conflicting enforcement policies, America is forced to examine the issue and come to a consensus between the policies to ensure homogeneity between the two lawmaking bodies.
One means of analyzing the issue is through an economic perspective. As economics is the study of “how society manages its scarce resources” and the manner in which a society makes decisions, the economics behind a controversial policy can help determine acceptance or rejection of the proposed law (Mankiw 1-1). Based on fundamental economic concepts, historical evidence, global data, and future forecasts, the effects of legalizing marijuana will be analyzed. After analyzing the economics of the legalization, a decision can be made.
Brief History of Cannabis
From the beginning of time, the Cannabis plant has been cultivated and exported around the world for its material, medicinal, and spiritual uses. The first recorded instance of the cannabis plant being valued in society was in 2900 BC when Emperor Fu His claimed it held the powers
of yin and yang (Historical 1). Egypt, Persia, and Greece, also cultivated the Cannabis plant for both physical and mental healing antidotes and used the resin to create an anesthetic in surgery. Cannabis was also a fundamental export during the formation of America. Cannabis was so highly valued in American society in 1611 that Virginia law fined those that didn’t grow the plant. In other words, the settlers’ initial success in forming America’s economy is partly due to the hemp plant as an export for both its traditional medicinal uses but also for many other purposes. The tensile strength of the hemp plant makes for a good material for sails, the seeds of the hemp plant could be ground to make a substantial meal, and the bud used as a recreational drug. In fact, grocery stores and newsstands sold cannabis in bulk until 1937 when the Federal government implemented the Federal Marijuana Tax Act (History 30). The movement for the prohibition of cannabis began with commissioner, Henry Anslinger in 1930, who later became head of the Narcotics Bureau in 1936. Anslinger was a strong proponent of prohibition and made it his mission to make Cannabis illegal. He influenced the opinions of the American government and citizens by drawing a negative racist association between illegal Mexican immigrants who produced the herb and coined the term “marijuana.” Anslinger claimed the drug caused "dire mental and moral changes" and provoked criminal activity within the user. The negative preaching of Anslinger, tied with the publicity of William Randolph Hearst’s 28 newspapers in 1933, created enough negative sentiment that in 1936, 48 states imposed regulation laws for marijuana (Historical 9). By 1937, the federal government implemented the Marijuana Tax Act which taxed all producers and consumers of marijuana, attaining the core goal of reducing consumption. However, in creating a regulation tax, deadweight loss is created and both producers and consumers are hurt financially (Mankiw 8-2). The small victory in 1969 achieved by Timothy Leary, which proved the Marijuana Tax Act to be unconstitutional as a 2...