Ec 10 and My Multifaceted Life

Ah, the high-rolling life of Beren Professor of Economics N. Gregory Mankiw. Presiding over a packed Sanders Theatre of freshmen hanging on his every word, the former Chairman of the Council of Economic advisors strikes fear in the hearts of men. A lone sophomore among the ’09ers, each of them one rhetorical flourish away from disproving at least one major theorem, Mankiw’s axioms inspire me against my will. “Economics… will help you understand the world in which you live,” according to the class textbook, and “make you a more astute participant in the economy.” How true it is.

So inspired am I by my new way of looking at the world, I have eagerly applied it to one of my keen interests, drugs, and—to be matter of fact—their exorbitant cost. One of the first things I have learned in Ec 10 is not to make normative statements. Is the consumption of drugs good for individuals? My notes and useful textbook tell me that is not a valid question. Rather, the astute student might ask: are drugs being distributed in the most efficient way possible?

The answer, sadly, is no. Competition would drive down prices and, eventually, increase supply, if only drugs were legalized and operated in the free market system. Some of my friends would have thicker wallets once the market equilibrium price replaces the distorted black market. If illicit drugs were legal, then no dealer would ever have problems enforcing their property rights. Instead of suffering theft, a disincentive to industry and commerce if their ever was one, drug salesmen for the first time will be able to call the cops at 2 a.m. “Officer? I need a squad car here right away. My stash has been stolen!”

But no good deed goes unpunished; newly legalized illegal drugs will allow for serious industry supervision. A newly empowered and involved Food and Drug Administration could make sure all our stashes are pure. Passing out and being afraid to go to the hospital would be a thing of the past. If they can’t approve RU-42 emergency contraceptives for my girlfriend and I, can’t they at least improve the quality of weed? More low-quality baggies are one thing overstimulated and undernourished college students don’t need.

As bad as government regulation may be compared to Adam Smith’s invisible hand, buying at the pharmacy is infinitely simpler than on the street. Why should I buy from Steve in Hurlbut when I know CVS has quality assured dope? Perhaps I could have a discount with my CVS card—I know it’s on my keychain for some useful purpose.

And embracing the principles of Ec 10 does not mean we have to leave poor Barker Professor of Economics Stephen Marglin and Social Analysis 72 out in the cold. By instituting a progressive tax to redress the social costs of drug use, the government can turn the war on drugs into money for its coffers. Profits will increase over time, since studies show that addiction leads to a highly inelastic demand curve. Imagine all the tax money that would be saved with all the newly found time on the hands of the Harvard University Police Department—free to double its force for the next Lamont party.

There is only one problem. As Freakonomist, University of Chicago professor Stephen Levitt has pointed out, your average street hustler earns less than the minimum wage. Employees who serve the Harvard community should be doing better than that. If we legalize drugs, drug dealers will have to be paid a minimum wage, if not the living wage. This, however, may put some drug dealers out of business, since, as Mankiw tells us, an increase in wage leads to a decrease in overall employment. But night-pharmacists have families to support too. Benefits, healthcare, it’s all on the table. Our drug dealers should be of a better sort than the drug dealers anywhere else. Isn’t there a reason why astute economic-minded young men and women stay away from New Haven?



Noah Hertz-Bunzl ’08 is a social studies concentrator in Pforzheimer House.