Despite the government’s best efforts, cocaine prices have plummeted over the past 30 years. All our best drug interdiction and anti-narcotic regulation work hasn’t put much of a dent in production or consumption. The laws of economics and technology have teamed up to ensure that technical advances, economies of scale, and improved supply chains deliver product to consumers faster and cheaper.

That got me thinking, what would the government do if it wanted to price most consumers out of the market? What would it take for government to make cocaine prohibitively expensive for most people?

My modest proposal: legalize cocaine, and then subsidize its consumption.

Now bare with me. It might seem to be a ridiculous idea on its face. After all, subsidizing consumption is what the government does when it wants to drive prices down, not up. But let’s look at the two most ambitious consumption subsidies that the US government has ever undertaken: housing and higher education.

In both instances, the government agreed to take on the burden of part or all of the purchase price of the good. In the housing market, the government pushed down interest rates, gave tax subsidies to home owners, and strong-armed mortgage lenders into lending to people with lower and lower means. Prices went up and up under the force of government subsidy, leading ultimately to a bubble that staggered the global economy.

An even closer parallel to my proposed cocaine subsidy is the higher education market. Easy money for higher education makes the vast majority of students less price sensitive. This removes the major incentive for universities to control costs and keep tuitions low. After all, if you know the majority of your students qualify for low-interest, payment-deferred loans that will comfortably cover tens of thousands of dollars a year, why not charge them tens of thousands of dollars a year and give them all the help they need on the paper work.

(This is, functionally, what financial aid advisers at universities do these days. Their job is to stream-line and support the loan application process to ensure that students get as much money as they need with as little trouble as possible.)

What have been the results of these government efforts to make housing and higher education “more affordable”? The biggest real estate bubble in human history and college tuitions that sky-rocket perfectly in tandem with increases in government subsidized educational loans.

In other words, the government is so bad at planning the economy, that when it tries to force prices down, they usually go up. And as we saw with cocaine, even when it spends almost a century trying to eradicate consumption entirely, markets manage to bring prices down anyway. In both instances, prices ended up going in the opposite direction from what the .gov intended.

But having a method that is exactly wrong most of the time is actually just as good as having one that is exactly right most of the time. All you have to do is invert the input set. So instead of subsidizing the kind of consumption that the government likes (hence inflating prices and destabilizing markets), the government should instead subsidize the use of things that it doesn’t like.

This works especially well for things like Cocaine. Say the government declared low-interest loans for anyone wanting to buy a bunch of cocaine. Dealers the world over would rejoice and raise prices in anticipation of the increased demand from customers newly flush with cheap government cash. As with the higher education market, this would kick off a feedback loop in which the government increased subsidies in response to rising prices, and the dealers increased prices in response to rising subsidies.

Before long, a night-at-the-club’s worth of dancing sugar costs as much as a used car and you have to take out loans every time you wanted to get a bump. Pretty soon it’d be impossible to get another loan because of the sheer number you had outstanding already. But you wouldn’t be able to afford the marching powder on your own, because the loan subsidies had driven prices up so high. You’d be priced out of the market and be forced to come clean.

Cocaine, like higher education, would become an unsustainably expensive habit. Just like college, you might manage to ride the white rails every night for a few years, but eventually you’d have to sober up, get a job, and finally pay off the loans from those years of partying. Make cocaine debt non-dischargeable, just like educational debt, and you have a recipe for drastically reducing the number of people spending years sucking nose candy off the backs of LMFAO albums.

And let’s face it: doing loads of coke for four years can’t be that much more damaging to one’s life prospects than getting a state school Art degree.

And so, I strongly encourage the United States government not only to legalize cocaine, but to subsidize its consumption. Cheap cocaine will be a fact of life until the US .gov recognizes the right of every man, woman, and child in this country to suck down snow on the tax payer’s dime. Then, and only then, can we finally price addicts out of the market and begin the long process of healing our national addiction to nose candy.


N.B: I apologize for any drug-related misrepresentations in this article and for any offense they may have caused any cocaine addicts in the audience. Having never done cocaine myself, I don’t know for sure if that’s what makes you like all those terrible LMFAO songs, but high-grade narcotics are the only reason I can think of for why such shitty music is so ridiculously popular.

(Hat tip to the wonderful Radley Balko for both the link and idea.)