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[Wayward Device]

Ok. First of all, what this thread is not about. It's not about the morality of drug laws, or that time you may or may not have take drugs. Or how the current political situation in <Country of your choice> makes legalization highly unlikely/impossible. Or similar stuff that I'm not going to go into detail about because it should be obvious. It's a thought experiment. That is to say, I will present an idea (should be pretty obvious by now from the title what it'll be) and discussion of that idea will....you know. Commence and stuff. With ideas. And high quality animations that would char George Lucas' bastard flesh to the bonesensible arguments in a friendly tone. Any deviation from this plan will result in instant retribution, as soon as one of my future descendants invents a time machine. Now, to the bones of the matter:

What effect, if any, would the legalization of recreational drugs on a national or international level have on the world economy? Could it get us out of the aftermath of the Moneypocalypse¹?

For the purposes of clarity, mention where and what (i.e <country of your choice> does a,b and c and then x,y and z happens), but feel free to speculate wildly as well. Hmm... what's left... Oh! Right! Thought experiment !!SCIENCE POWERS!! Activate!   

1. I am outraged. Anyone who makes a spellcheck that doesn't accept "moneypocalypse" or "spellcheck" as a real words doesn't take their language seriously.     

[Putnam]

I'm not sure if they would boost in demand--everyone who's against legalizing would probably never use. Those who are for legalizing but don't use may start, but there aren't as many as one may think. Supply would increase, that's for sure--and prices would go down accordingly.

[GalenEvil]

USA, specifically Marijuana:

The probability of actual legalization and subsequent taxation is very small for this drug due to its ease of growth. In order to make it a true prospect for legalization then the quality standard across the board would need to be increased at least to medical standards. Due to the ease of growth of what would become sub-standard grades of marijuana it would also be difficult to appropriately tax (which is why it would be difficult to get legalized, in my opinion).

I think that the absolute most that could be hoped for by any pro-marijuana group would be for it to become a non-criminal offense.

[penguinofhonor]

.

[LordBucket]

What effect, if any, would the legalization of recreational drugs on a national or international
level have on the world economy? Could it get us out of the aftermath of the Moneypocalypse1?

I'm uncertain whether tax income from legalization of the drugs that happen to be illegal at present would be enough to make up for the loss in income from fines, seizures and the CIA drug trade. Source 1 Source 2 Source 3

That aside, I would be in favor.

[Wayward Device]

!!Super Happy Yay!!. Ahem. Sorry about that, it just sorta slipped out. Now:

What effect, if any, would the legalization of recreational drugs on a national or international
level have on the world economy? Could it get us out of the aftermath of the Moneypocalypse1?

I'm uncertain whether tax income from legalization of the drugs that happen to be illegal at present would be enough to make up for the loss in income from fines, seizures and the CIA drug trade. Source 1 Source 2 Source 3

That aside, I would be in favor.

Those are all indeed good points, especially about the asset seizure¹. However, I would argue that it works on the assumption that the money acquired from seizures comes from nowhere, i.e. because the owners of the assets are criminals and therefore operate in the black market, they aren't contributing to the US economy². Not that this really matters in practical black market terms, as risk to the seller (as well as greed and all that good stuff) is a factor in the price. That said, I would argue that while direct taxes from now-legalized narcotic sales (even including the likely price crash form the removal of various risks (i.e. rivals shooting you in the face, cops Seizing your lootz) might not be too high at first, as the people found their way around the new market there would be a strong potential for growth. Plus, the fact that you could scrap entirely the DEA would certainly mean a few savings for the treasury.         

1. Without getting too of topic, there are quite a few cases where various law enforcement agencies in the US have deliberately targeted "suspects" with easily salable assets to fill budget holes, even going so far as to plant evidence to secure a conviction and therefore a seizure. I apologize for the lack of sources in this post, I've been studying for about 14.5 hours and my brain-chi is too low to use my flying-shadow-fire-crane google-fu techniques.

2. I remember reading a bunch of essays about three years ago that claimed that the black market makes up roughly 11% of the overall US economy, with about 7  of the 11% being drugs (the rest is stuff like illegal migrant workers, arms sales, people trafficking etc). One of the essays focused on the fact that cannabis (I refuse to say Mary Jane in Spanish every time I want to mention this) was actually the largest cash crop grown in California. Sadly, my advanced state of impending brain coma leaves me unable to find facts to back this up. If anyone can oblige and feels like it (or can provide something completely contradictory to what I said), please do.   

[GalenEvil]

I refuse to say Mary Jane in Spanish every time I want to mention this

I never even thought of the origins of Marijuana as a name until now... I don't like calling it Mary Jane because it sounds rather odd and just makes me think about Spider Man. I guess I will be calling it cannabis from now on, heh.

[Nilik]

I think the most profound effect that would be felt throughout the world is that everything would be, like, super awesome maaaaaaan.

I may post a serious response here later...

[palsch]

I need to get hold of the book mentioned here. The essays in those links are interesting reading and I wish to have more.

Some of the more interesting points;

Cannabis's effects on alcohol consumption levels are pretty important to discover. From the second article;

Another big unknown is how marijuana legalization would influence alcohol consumption. It is natural to assume that pot would serve as a substitute (higher use would decrease heavy drinking), but it is equally likely that it would be a complement (higher use would increase heavy drinking). The scientific literature on this is inconclusive.

That uncertainty is crucial because heavy drinking is much more common—and much more harmful—than heavy marijuana use. Alcohol is strongly connected with violence, traffic fatalities and chronic disease. Even a small decrease in heavy drinking could outweigh any social costs from legalizing marijuana. By the same token, even a small increase in heavy drinking could outweigh any benefits of legalization.

The first article really makes the point that we suck at managing addiction and substance use (let alone abuse) as a society. There are schemes that work, but they tend to be regional at best. In the broad scheme of things cannabis is only a sideshow, with minimal benefits or costs associated compared to other drugs. Getting a sensible and effective system for managing alcohol use and addiction would be far more important, as well as becoming a solid base to build legalisation and management of other substances on.