Milton Friedman: ‘Crack Would Never Have Existed If You Had Not Had Drug Prohibition’

Michael Chapman

Nobel laureate Milton Friedman, a libertarian and one of the most influential economists of the twentieth century, was born on July 31, 1912, and died on November 16, 2006, at the age of 94. This blog is posted in remembrance of his birthday and in honor of his legacy, particularly his many contributions to individual freedom.

Over his distinguished career, Friedman’s work influenced such areas as US monetary policy, macroeconomics, taxation, deregulation, privatization, and school choice. He was also one of the most articulate and persuasive advocates for the legalization of drugs, arguing that the war on drugs had failed just like Prohibition had failed.

The situation today with violent narco-cartels, police and government corruption, global drug markets, fentanyl overdoses, ever-stronger synthetic drugs, and thousands of bystander victims only strengthens his argument. One of the best interviews of Friedman where he addressed the pros and cons of drug legalization occurred in 1991 on “America’s Drug Forum,” a program hosted by Emmy Award-winning reporter Randy Paige and broadcast on public television.

During the lengthy interview, Friedman explains, for instance, how the war on drugs is like alcohol prohibition in the 1920s-30s, complete with gang violence, corruption, and innocent victims. “Alcohol was readily available” during Prohibition, says Friedman. “Bootlegging was common. Any idea that alcohol prohibition was keeping people from drinking was absurd. There were speakeasies all over the place. But more than that, we had this spectacle of Al Capone, of the hijackings, of the gang wars. … Anybody with two eyes to see could see that this was a bad deal, that you were doing more harm than good.”

“The same thing happened under prohibition of alcohol as is happening now,” says Friedman. “Under prohibition of alcohol, deaths from alcohol poisoning, from poisoning by things that were mixed in with the illegal bootleg alcohol, went up sharply. Similarly, under drug prohibition, deaths from overdose, from adulterations, from adulterated substances have gone up.” This is certainly the case with fentanyl when laced with other drugs.

Part 1: Milton Friedman on Legalizing Drugs (Source: YouTube)

Friedman also notes that drugs such as alcohol and tobacco (nicotine), which are legal, are among the top substances abused by Americans and cause far more deaths than those claimed by illegal drugs. According to the CDC, in 2020–2021 there were 178,307 deaths caused by excessive alcohol use in the United States; the American Lung Association reports that smoking kills more than 480,000 per year in the US and second-hand smoke causes 41,000 deaths each year. In 2022, according to the CDC, there were 107,941 drug overdose deaths. Those deaths involved drugs such as fentanyl, heroin, cocaine and methamphetamine.

Commenting further, Friedman says, “Look, the case for prohibiting drugs is exactly as strong and as weak as the case for prohibiting people from overeating. We all know that overeating causes more deaths than drugs do. If it’s in principle okay for the government to say you must not consume drugs because they’ll do you harm, why isn’t it all right to say you must not eat too much because it will do harm? Why isn’t it all right to say you must not try to go in for skydiving because you’re likely to die? Why isn’t it all right to say, ‘Oh, skiing, that’s no good, that’s a very dangerous sport, you’ll hurt yourself?’ Where do you draw the line?”

Friedman, who was awarded the Presidential Medal of Freedom in 1988 by President Ronald Reagan, also explains how criminalizing drugs drives “people from mild drugs to strong drugs” and adds that crack cocaine “would never have existed, in my opinion, if you had not had drug prohibition.” Why was crack cocaine created? he asks. “Because cocaine was so expensive.” And it was expensive because of drug prohibition.

Part 2 : Milton Friedman on Legalizing Drugs (Source: YouTube)

Further, “if you look at the drug war from a purely economic point of view, the role of the government is to protect the drug cartel,” says Friedman. “That’s literally true. … What do I mean by that? In an ordinary free market business—let’s take potatoes, beef, anything you want—there are thousands of importers and exporters. Anybody can go into the business. But it’s very hard for a small person to go into the drug-importing business because our interdiction efforts essentially make it enormously costly. So, the only people who can survive in that business are these large, Medellin cartel kind of people who have enough money so they can have fleets of airplanes, so they can have sophisticated methods, and so on.”

“[B]y keeping goods out and by arresting, let’s say, local marijuana growers, the government keeps the price of these products high,” explains Friedman. “What more could a monopolist want? He’s got a government who makes it very hard for all his competitors and who keeps the price of his products high. It’s absolutely heaven.”

If drugs were legalized in the United States, says Friedman, “the one adverse effect that legalization might have is that there very likely would be more people taking drugs. That’s not by any means clear. But if you legalize it, you destroy the black market, the price of drugs will go down drastically.”

He qualifies this point by saying, “The child who’s shot in a slum in a pass-by shooting, in a random shooting, is an innocent victim in every respect of the term. The person who decides to take drugs for himself is not an innocent victim. He has chosen himself to be a victim. And I must say I have very much less sympathy for him. I do not think it is moral to impose such heavy costs on other people to protect people from their own choices.”

Drug use is a “moral problem,” says Friedman. “It’s a problem of the harm which government is doing. Look, I have estimated statistically that the prohibition of drugs produces on the average 10,000 additional homicides a year. It’s a moral problem that the government is going around killing 10,000 people. It’s a moral problem that the government is making into criminals people who may be doing something you and I don’t approve of but who are doing something that hurts nobody else.”

Part 3: Milton Friedman on Legalizing Drugs (Source: YouTube)

“I would legalize drugs by subjecting them to exactly the same rules that alcohol and cigarettes are subjected to now,” says Friedman. “Alcohol and cigarettes cause more deaths than drugs do, by far, from use, but many fewer innocent victims.”

When asked if anything frightens him about legalizing drugs, Friedman replies, “Nothing scares me about the notion of drugs being legal. … What scares me is the notion of continuing on the path we’re on now, which will destroy our free society, making it an uncivilized place.”

In addition to winning the 1976 Nobel Prize for Economics, Friedman served as a professor at the University of Chicago (1946–77) and was a Hoover Institution Fellow at Stanford University (1977–2006). He was awarded the National Medal of Science (1988) and he wrote several influential books, including Capitalism and Freedom, A Monetary History of the United States 1867–1960, and, wife his wife Rose Friedman, Free to Choose: A Personal Statement. The latter was adapted into a ten-part TV series and broadcast on PBS.

You can watch the entire interview with Milton Friedman in the three videos embedded in this blog. A condensed transcript is provided below. For more on the failed war on drugs, visit the Cato Institute website.

Partial transcript, “America’s Drug Forum,” 1991:

Randy Paige: Let us deal first with the issue of legalization of drugs. How do you see America changing for the better under that system?

Milton Friedman: I see America with half the number of prisons; half the number of prisoners; 10,000 fewer homicides a year; inner cities in which there’s a chance for these poor people to live without being afraid for their lives; citizens who might be respectable who are now addicts not being subject to becoming criminals in order to get their drug; being able to get drugs for which they’re sure of the quality. You know, the same thing happened under prohibition of alcohol as is happening now.

Under prohibition of alcohol, deaths from alcohol poisoning, from poisoning by things that were mixed in with the illegal bootleg alcohol, went up sharply. Similarly, under drug prohibition, deaths from overdose, from adulterations, from adulterated substances have gone up.

Paige: How would legalization adversely affect America, in your view?

Friedman: The one adverse effect that legalization might have is that there very likely would be more people taking drugs. That’s not by any means clear. But if you legalize it, you destroy the black market, the price of drugs will go down drastically. And, as an economist, lower prices tend to generate more demand. However, there are some very strong qualifications to be made for that. The effect of criminalization, of making drugs criminal, is to drive people from mild drugs to strong drugs.

Paige: In what way?

Friedman: Well, you may, take marijuana. Marijuana is a very heavy, bulky substance, and therefore it’s relatively easy to interdict. The warriors on drugs have been more successful interdicting marijuana than, let’s say, cocaine. So marijuana prices have gone up, they become harder to get. There’s been an incentive to grow more potent marijuana and people have been driven from marijuana to heroin, or cocaine, or crack or one of the other drugs.

Paige: Let us consider another drug then, and that is the drug crack, crack cocaine.

Friedman: Crack would never have existed, in my opinion, if you had not had drug prohibition. It was drug prohibition. Why was crack created? Because cocaine was so expensive. … I’m not talking from personal experience. I’ve never touched any of this stuff. I’m speaking from what I’ve read in the literature. But the preferred method of taking cocaine, from what I understand, was by sniffing it, snorting it, became very expensive, and they were desperate to find a way of packaging cocaine.

… [Crack] is addictive, but I understand from all the medical evidence that it’s no more addictive than other drugs. In fact, the most addictive drug everybody acknowledges is tobacco.

Friedman: … Prohibition was repealed in 1933 when I was 21 years old—so I was a teenager during most of Prohibition. Alcohol was readily available. Bootlegging was common. Any idea that alcohol prohibition was keeping people from drinking was absurd. There were speakeasies all over the place. But more than that, we had this spectacle of Al Capone, of the hijackings, of the gang wars. … Anybody with two eyes to see could see that this was a bad deal, that you were doing more harm than good.

Now, in addition, I became an economist, and as an economist I came to recognize the importance of markets and free choice and of consumer sovereignty and came to discover the harm that was done when you interfered with them. The laws against drugs were passed in 1914, but there was no very great enforcement of it. …

… But I have to admit that the one negative feature of legalizing drugs is that there might be some additional drug habits. However, I want to qualify that in still another way.

The child who’s shot in a slum in a pass-by shooting, in a random shooting, is an innocent victim in every respect of the term. The person who decides to take drugs for himself is not an innocent victim. He has chosen himself to be a victim. And I must say I have very much less sympathy for him. I do not think it is moral to impose such heavy costs on other people to protect people from their own choices.

Paige: For us to understand the real root of those beliefs, how about if we just talk for a minute about free market economic perspective, that perspective, and how you see the proper role of government in its dealings with the individual.

Friedman: The proper role of government is exactly what John Stuart Mill said in the middle of the nineteenth century in “On Liberty.” The proper role of government is to prevent other people from harming an individual. Government, he said, never has any right to interfere with an individual for that individual’s own good.

Look, the case for prohibiting drugs is exactly as strong and as weak as the case for prohibiting people from overeating. We all know that overeating causes more deaths than drugs do. If it’s in principle okay for the government to say you must not consume drugs because they’ll do you harm, why isn’t it all right to say you must not eat too much because it will do harm? Why isn’t it all right to say you must not try to go in for skydiving because you’re likely to die? Why isn’t it all right to say, “Oh, skiing, that’s no good, that’s a very dangerous sport, you’ll hurt yourself”?

Where do you draw the line?

… It [drugs] does harm a great many other people, but primarily because it’s prohibited. There are an enormous number of innocent victims now. You’ve got the people whose purses are stolen, who are bashed over the head by people trying to get enough money for their next fix. You’ve got the people killed in the random drug wars. You’ve got the corruption of the legal establishment. You’ve got the innocent victims who are taxpayers who have to pay for more and more prisons, and more and more prisoners, and more and more police. You’ve got the rest of us who don’t get decent law enforcement because all the law enforcement officials are busy trying to do the impossible. And last, but not least, you’ve got the people of Colombia and Peru and so on. What business do we have destroying and leading to the killing of thousands of people in Colombia because we cannot enforce our own laws? If we could enforce our laws against drugs, there would be no market for these drugs. You wouldn’t have Colombia in the state it’s in.

Paige: Is it not true that the entire discussion here, the entire drug problem is an economic problem till now?

Friedman: No, it’s not an economic problem at all. It’s a moral problem. I’m an economist. But the economics problem is strictly tertiary. It’s a moral problem. It’s a problem of the harm which government is doing. Look, I have estimated statistically that the prohibition of drugs produces on the average 10,000 additional homicides a year. It’s a moral problem that the government is going around killing 10,000 people. It’s a moral problem that the government is making into criminals people who may be doing something you and I don’t approve of but who are doing something that hurts nobody else. Most of the arrests for drugs are for possession by casual users. Now, here’s somebody who wants to smoke a cigarette, a marijuana joint. If he’s caught, he goes to jail. Now, is that moral? Is that proper? I think it’s absolutely disgraceful that our government’s—supposed to be our government—should be in the position of converting people who are not harming others into criminals, of destroying their lives, putting them in jail. I don’t— that’s the issue to me. …

… See, if you look at the drug war from a purely economic point of view, the role of the government is to protect the drug cartel. That’s literally true.

Paige: Is it doing a good job of it?

Friedman: Excellent. What do I mean by that? In an ordinary free market business—let’s take potatoes, beef, anything you want—there are thousands of importers and exporters. Anybody can go into the business. But it’s very hard for a small person to go into the drug-importing business because our interdiction efforts essentially make it enormously costly. So, the only people who can survive in that business are these large, Medellin cartel kind of people who have enough money so they can have fleets of airplanes, so they can have sophisticated methods, and so on.

In addition to which, by keeping goods out and by arresting, let’s say, local marijuana growers, the government keeps the price of these products high. What more could a monopolist want? He’s got a government who makes it very hard for all his competitors and who keeps the price of his products high. It’s absolutely heaven.

… [Drug] legalization is a way to stop—in our forum as citizens—a government from using our power to engage in the immoral behavior of killing people, taking lives away from people in the US, in Colombia, and elsewhere, which we have no business doing.

Paige: So, you see the role of government right now as being just as deadly as if Uncle Sam were to take a gun to somebody’s head.

Friedman: That’s what he’s doing, of course. Right now Uncle Sam is not only taking a gun to somebody’s head, he’s taking his property without due process of law. The drug enforcers are expropriating property, in many cases of innocent people on whom they don’t have a real warrant. That’s a terrible way to run what’s supposed to be a free country.

Paige: … How would you legalize drugs? How would you go about doing that?

Friedman: I would legalize drugs by subjecting them to exactly the same rules that alcohol and cigarettes are subjected to now. Alcohol and cigarettes cause more deaths than drugs do, by far, from use, but many fewer innocent victims. And the major innocent victims, in that case, are the people who are killed by drunk drivers. And we ought to enforce the law against drunk driving, just as we ought to enforce the law against driving under the influence of marijuana or cocaine, or anything else.

But I would, as a first step at least, treat the drugs exactly the same way we now treat alcohol and tobacco, no different.

….

Paige: What scares you the most about the notion of drugs being legal?

Friedman: Nothing scares me about the notion of drugs being legal.

Paige: Nothing?

Friedman: What scares me is the notion of continuing on the path we’re on now, which will destroy our free society, making it an uncivilized place. There’s only one way you can really enforce the drug laws currently. The only way to do that is to adopt the policies of Saudi Arabia, Singapore, which some other countries adopt, in which a drug addict is subject to capital punishment or, at the very least, having his hand chopped off. If we were willing to have penalties like that—but would that be a society you’d want to live in?

Paige: Last question. You have grandchildren?

Friedman: Absolutely. I have a two-year-old granddaughter named Becca.

Paige: When you look at Becca, what do you see for her and for her future?

Friedman: That depends entirely upon what you and your fellow citizens do to our country. If you and your fellow citizens continue on moving more and more in the direction of socialism, not only inspired through your drug prohibition, but through your socialization of schools, the socialization of medicine, the regulation of industry, I see for my granddaughter the equivalent of Soviet communism three years ago [before the collapse of the USSR in 1991].