ROANOKE TIMES

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, April 19, 1994                   TAG: 9404190132
SECTION: EDITORIAL                    PAGE: A-5   EDITION: METRO 
SOURCE: By R. EDWARD MITCHELL
DATELINE:                                 LENGTH: Long


BLACK-MARKET ECONOMICS

OUR PROBLEMS with drugs, guns, crime and violence have grown enormously in the past two decades. Despite all the effort and money that we have spent fighting drugs, crime and violence, these problems are worse than ever.

For decades I have paid more taxes than I wanted to, helping fund all this government effort. Why haven't these enormously expensive efforts been successful? What do we need to change to achieve success? How much longer will it take?

Elected and appointed officials give the same stock answers: more vigorous drug interdiction, more police, more prisons, tougher laws, less parole, etc. They ignore the fact that we already have the largest percentage of our population incarcerated since Jamestown was settled, and that the United States has the largest prison population of any country in the world. How can anyone believe that more prisons and more police will solve these problems?

It is understandable that most officials feel they must respond with the stock answers because it helps them keep their jobs. Any other answer diminishes their chances of being re-elected, reappointed or rehired. Naturally, they tell the people what the people want to hear. A few risk-takers have floated trial balloons for the legalization of dope, and their careers were permanently damaged.

We worry about keeping drugs and guns away from the bad guys, but that is not the problem. As long as the bad guys have plenty money, they will get whatever they want. More police and jails will stop only a fraction of them. By interdicting drug shipments and passing stacks of anti-gun laws, all we are doing is driving up the price of drugs and guns.

However, what could make a major difference in our society would be keeping money out of the hands of criminals.

Why is a 14-year-old boy in Washington, D.C., able to afford a brand-new Beretta 9-mm semi-automatic pistol? How can an unemployed, illiterate pimp in New York own two brand-new limousines and 25 custom-tailored suits?

Most successful pimps lead extraordinary lifestyles because they supply a commodity that has been declared illegal and for which there is a substantial, ongoing demand.

The United States has a subculture of tens of thousands of uneducated, uncivilized thugs empowered by huge sums of money that we unwittingly made available to them.

How? The answer is a straightforward principle of free-market economics: When a government rules illegal any substance or behavior that is desired by a significant portion of the population, a black market is instantly created.

There are two immediate results. First, the price of the forbidden commodity or service is drawn up much higher than its intrinsic value. Second, new industries are quickly spawned to supply the demand.

In a black market with such enormous profit margins as drugs and prostitution, successful entrepreneurs can become wealthy far beyond the expectations of the average citizen who relies upon a foundation of hard work and education to achieve success.

Even though the dangers in the black market may be great, perhaps even lethal, there will always be people aspiring to get into those businesses to try their luck. As in any profitable corporation or government bureaucracy, the toughest, meanest and cleverest will gravitate to the top (or the bottom, as you wish). Once there, they will be called kingpins or CEOs, depending upon the industry. They will be wealthy, and they will be regarded by others in that industry as heroes and role models.

One way to put any organization out of business, no matter how powerful, is to remove its source of funding. Removing most criminals' source of income means putting an end to the black market from which they live. We must somehow legalize and normalize the behavior that started the black market in the first place.

This is a radical and shocking proposal to some people. Many of us, while otherwise calm and rational about most political and social issues, react in horror at the notion of legalizing drugs. An acquaintance asked me, "Do you really believe we should let the riffraff have all the drugs they want?" My response: I would rather they have all the drugs they can afford than all the drugs, guns and money they want.

It is the lesser of two evils. I want to disempower the makers and sellers of recreational drugs, just as we have largely done to the alcoholic beverage and gambling industries.

Instead of taxing me to pay for all the police, courts and prisons in a futile attempt to regulate a black market, let those industries pay their own taxes. Let them help pay for any damage and suffering caused by users who misuse and abuse their liberty, just as we have begun doing with people who abuse alcohol.

At the present time, a politician or a judge or a police officer cannot openly and honestly discuss the pros and cons of career-killing subjects like the legalization of drugs and prostitution, because we, the people, exist in our own rigidity born out of our own fears. Thus, we damage their reputations or frighten them into silence even though they are genuinely interested in solving our gravest social problems. We have created a modern form of McCarthyism.

Making changes that will make a real difference means breaking out of old molds that stifle thought and creativity. New ideas are needed, as well as realism about our social, moral and legal issues. Self-righteous claims of "sticking to our principles" cannot excuse inflexibility. Finding fault with the narrow-mindedness and intolerance in other nations and cultures is easy. It is much more difficult to see our own.

America, wake up and smell the money! The evil empires built with money from black marketeering must be dismantled. It can be done only by taking away their source of money.

R. Edward Mitchell of Roanoke is a management consultant and technical writer.



 by CNB