Quotulatiousness

December 3, 2017

Alberta debates marijuana legalization … oddly

Filed under: Cancon, Law, Liberty — Tags: , , , — Nicholas @ 03:00

Colby Cosh’s most recent column is a real-life illustration of the old Bastiat saying that “The worst thing that can happen to a good cause is not to be skillfully attacked, but to be ineptly defended”:

I will leave better informed people to discuss Mr. Orr’s creative interpretation of the Cultural Revolution as being a proto-Reaganite anti-drug crusade. Actually, I am just informed enough to discuss it, briefly. Here’s the discussion: it’s bananas.

And yet! — the nonsense about China might not even have been the silliest part of the speech. Orr has concerns that legalized marijuana might not serve to suppress illegal production. This could, in itself, be a legitimate point. There is a genuine fear that the licensed vendors will set the price too high to compete with existing dealers. But it is not quite the point Orr chose to make. He seems to be convinced that licensed growers cannot compete with the black market at any price.

Why is it that criminals grow pot? Orr’s answer is not “because growing pot has, until now, been a crime.” That would be too easy. “Let’s look at it from a business point of view,” he suggests…

“The black market doesn’t have to pay taxes. They don’t have to pay (worker’s compensation). In most cases they don’t have to pay for any capital expenditures on land or buildings. They don’t have to buy business licences. In many cases they don’t pay for power… Anybody who tries to do this legally is going to have to pay all of these expenses, and you think you can compete financially on that level with them?”

This, of course, explains why, when we want furniture or shoes or chicken, we all invariably buy them in back alleys from underground businesses. But if Orr were to actually look around Alberta — even his own part of Alberta — he would see that lawful businesses do have some advantages.

Legal growers can raise hundreds of millions of dollars in capital markets not run by guys named Lefty or Snake. They can recruit scientists, professional marketers, and horticultural experts without having to hope Walter White shows up. They can exploit economies of scale. They can buy or rent acres of land without having to hide from helicopters. They can do business in broad daylight: they can rent billboards.

And meanwhile, it is not really as though illegal pot growers don’t have labour costs, or overhead, or capital and land requirements. Underground businesses that don’t pay “tax” still have to spend money, often more money, on the basic protective services that taxes buy the rest of us. Any economist could have told Mr. Orr as much. But I am afraid he got his economics out of the same Cracker Jack box his Chinese history came from.

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