Problems with Legalization

I have a new piece about the potential short-term side effects in Mexico of marijuana legalization in the United States. As I mention in the piece, I do support legalization of marijuana, but it's pretty clear to me that doing so without any coordination with Mexican authorities or any improvement in said authorities' capacity to keep a lid on public security in Mexico would be dangerous. Highlights:

But one element of legalization-as-solution that hasn’t been adequately taken into account is the immediate aftermath of such a move in Mexico. Here, the best arguments for legalization also turn into rather daunting reasons to think twice; without any improvement of Mexico’s crime-fighting agencies in the meantime, the short-term impact of legalization on security could be severe.

Marijuana legalization would amount to the overnight elimination of several billion dollars of annual income for the gangs. That is, by any measure, a significant economic dislocation. As a generation of Detroit residents can tell, significant economic dislocations are necessarily traumatic. If you substitute a collection of money-hungry killers for middle-class autoworkers, the scale of the trauma increases exponentially. If Mexican gangs respond to the seizure of 134 tons of marijuana with the promise to kill 135 innocents, as was the case In October, shouldn’t we be a little more concerned about the impact of eliminating all their tons of marijuana?

Mexico’s secretary of defense has estimated that some 500,000 Mexicans earn their living off the drug trade. Other estimates place the number at closer to a million. Whatever the real number, there’s no question that legalization will put many of them out of work, and this isn’t a group that will seamlessly reinsert itself into the legitimate labor force selling insurance. Instead, many of them will branch out into criminal enterprises significantly more harmful to Mexican civilians than drug trafficking.

Indeed, Mexico’s past few years present evidence of this. With a far more aggressive federal approach making trafficking large loads of drugs northward more complicated, the incidence of extortion, bank robbery, and kidnapping has exploded in many parts of the nation. To wit: in 2007 Mexico had 50,000 complaints of extortion, compared to only 500 five years previous. Federal authorities have also reported that the number of kidnappings has tripled in the past five years.

The increase in such crimes is disturbing for two reasons: the first is that unlike drug smuggling, which can be carried out without physical harm being done, the above enterprises necessarily include either the act of or, in the case of extortion, the threat of violence.

The second is that extortion and the like directly target civilians, and the victims—the middle class tortilla manufacturer, the son of the sporting goods magnate—are typically preyed upon precisely because they are successful. In other words, while drug traffic serves as a blight on society, it is a blight that is often hidden and easy for the responsible citizen to ignore. The above crimes, in contrast, disincentivize prosperity, and therefore have a much more insidious impact on Mexico’s broader economic development.