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The Legalization Of Marijuana In America: From An Economic Standpoint

2938 words - 12 pages

From an Economic Standpoint
12/2/2012

The Legalization of Marijuana in America

ID: 1175376

Introduction
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 ...view middle of the document...

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
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violation of the 5th amendment was quickly thwarted by the Controlled Substance Act in 1970 under Richard Nixon’s reign. Nixon commenced the War on Drugs in 1972 and has created a financial burden on the United States. In the 2012 elections, both Colorado and Washington passed the policy for marijuana as a recreational drug and Massachusetts became the 18th state to legalize medical marijuana (Smith 1). The passing of these policies creates ongoing conflict between the individual state and federal government regarding enforcement and until there is resolution, the states that passed the policies will enjoy economic benefits and the nation on the whole will suffer financial drawbacks resulting from the war on drugs.

Cost of War on Drugs
Examining fundamental economic concepts and historical instances, prohibition has proven to impact America’s economy in a negative manner. Prohibition is a method used to reduce consumption but has proven to result in negative externalities such as producer surplus, “criminal activity, health problems,...

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