How limes and unemployment tell us the war on drugs has to end

The soaring price of limes and America's stubborn unemployment rate are both products of the West's failed war on drugs, says Merryn Somerset Webb. It's high time for a rethink.

Two seemingly unconnected, but actually inextricably linked snippets of financial news appeared last week.

First, that the price of a lime has risen 300% in the last month in California. And second, that the labour participation rate for men between 25 and 54 in the US is staying stubbornly low at 88%. Back in 1964 it was 97%.

The link is the global war on drugs.

The price of limes has risen as a result of the changing behaviour of Mexico's drug cartels.The fall in the participation rate is connected to the fact that so many American men have been convicted one way and another of drug-related offences.

You can't participate in the labour force when you are in jail. And it is very hard to get a job when you leave jail.

The US locks up its people "at five times the UK rate and ten times that in Scandinavia. The result? "We have been generating people with criminal records pretty solidly for going on 30 years," John Schmitt an economist at the Centre for Economics and Policy Research in Washington told the FT last week.

Today, more than one in 15 American men has a criminal record (12 to 14 million people). So, even if the (clearly failing) war on drugs were cancelled tomorrow, "the share of the labour force with a criminal record will remain very high for a long time." The result being a total US employment rate that is 0.8-0.9 percentage points lower than it would be otherwise.

I keep meaning to write more on this, and I will soon. But I do think that it must be clear to pretty much everyone by now that the West's policies on drug use are hopelessly wrong that's why, as the FT puts it, "left and right in the US seem ready to think again on drugs policy", and why you can now "smoke pot, ski hot" in Colorado. And it isn't just a discussion taking off in the US.

Here, Nigel Farage (as is often the case) says what the others won't say clearly: "I personally think that the war on drugs was lost many, many years ago and that the lives of millions of people in Britain are being made miserable" by its effects.

It needs, he says, radical reform by which he means that at least some drugs should be legalised. But even if the others won't come out and say it quite so firmly, there are hints that the establishment is beginning to grasp the extent of the failure of policy so far.

Durham's chief constable noted that criminalising drugs does nothing but "put billions of pounds into the pockets of criminal gangs", and even Nick Clegg has said that "if you are anti drugs, you should be pro reform".

More on this coming, but anyone interested in the arguments for the legalisation and taxation of what is currently the most unregulated and also the most profitable business in the world should read Dr Max Rendall's book on the subject Legalise: The Only Way to Combat Drugs.

Image removed.

Recommended

Why Wall Street has got the US economy wrong again
Economy

Why Wall Street has got the US economy wrong again

The hiring slowdown does not signal recession for the US economy. Growth is just moving down a gear, says Brian Pellegrini.
25 Oct 2019
Beyond the Brexit talk, the British economy isn’t doing too badly
Economy

Beyond the Brexit talk, the British economy isn’t doing too badly

The political Brexit pantomime aside, Britain is in pretty good shape. With near-record employment, strong wage growth and modest inflation, there is …
17 Oct 2019
Beware: even the greatest brands can fail
UK Economy

Beware: even the greatest brands can fail

For decades, John Lewis seemed to exist in a parallel universe. Now, a grimmer reality has dawned
27 Sep 2020
What's behind Britain's coronavirus testing disaster?
UK Economy

What's behind Britain's coronavirus testing disaster?

Britain’s system of testing for the virus that causes Covid-19 collapsed just when we needed it most. What went wrong?
26 Sep 2020

Most Popular

How the stamp duty holiday is pushing up house prices
Stamp duty

How the stamp duty holiday is pushing up house prices

Stamp duty is an awful tax and should be replaced by something better. But its temporary removal is driving up house prices, says Merryn Somerset Webb…
25 Sep 2020
The electric-car bubble could get an awful lot bigger from here
Renewables

The electric-car bubble could get an awful lot bigger from here

The switch to electric cars is driving a huge investment bubble. But that’s not necessarily a bad thing, says John Stepek. Fortunes will be made and l…
24 Sep 2020
Can Rishi Sunak’s winter plan save the UK economy?
UK Economy

Can Rishi Sunak’s winter plan save the UK economy?

With his Winter Economic Plan, chancellor Rishi Sunak is hoping to support the economy through the dark months ahead as restrictions tighten again. Jo…
25 Sep 2020