Drug revenue would be put to better use in hands of government rather than gangs

Chris Johns was most recently Chief Investment Officer for global fundamental equities, State Street Global Advisers (SSgA). Previously he was CEO of Bank of Ireland Asset Management until the sale of that business to SSgA.

The global trade in drugs is worth £236 billion (€269 billion) per annum.

It was in this month nearly 50 years ago that US president Richard Nixon launched the “war on drugs”. Some wars have lasted longer but not many have continued after such an obvious defeat. Tenacity and stubbornness are prized values in any battle but few generals would continue fighting at such cost.

The war on drugs was lost the moment it started but it continues relentlessly, morphing into a narrative favoured by dystopian novelists.

One of the growth areas of academic finance in recent years has resulted in psychologists winning Nobel prizes for economics. The ways in which we are different to the rational, utility-maximising caricature of the textbooks has been usefully explored by researchers and has yielded a stream of insights that have guided policymakers in many jurisdictions.

Researchers are fond of finding weird anomalies in human behaviour that conflict with standard predictions, coming up with theories about why we behave in this way and then suggesting policy “nudges” that lead to better outcomes for both individuals and societies.

There is, perhaps, nothing weirder than the war on drugs: it will provide material for the study of anomalous human behaviour for generations to come.

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https://www.irishtimes.com/business/economy/time-to-tax-narcotics-as-war-on-drugs