U.S. Federalism Fails at Experimentation: Marijuana Revenue in Uruguay

The most sensible and cautious approach to marijuana legalization, it seems to me, is state monopoly.  Monopoly short-circuits the great motivating force of capitalism, the profit motive, and can operate without advertising.  And monopoly allows for instantaneous price adjustments to combat bootlegging.

But in the USA, states are scared that the Federal Government would shut down a marijuana monopoly, for reasons that Rob Mikos of Vanderbilt articulates.  I wonder if the Federal Government might not turn a blind eye to a scheme that’s demonstrably more cautious than the private enterprise ganjapreneur models that are taking hold, but most folks think Mikos is right, and that the safe approach to state legalization is private .

So the usual advantage of our Federalist system, where the states can be laboratories of experimentation, does not come into play.  The first marijuana monopoly is happening in an entire country, Uruguay.  It’s not strange that the first country to try it is a small one, because the chances of  the first experiment succeeding are slim.   A small country should be more nimble than a big one:  A battleship is harder to turn around than a PT boat.

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Author: patoglesby

From 1982 to 1990, I worked in tax policy for Committees of the United States Congress. In recent years, I was Adjunct Lecturer at UNC-Chapel Hill's Business School and then Adjunct Professor at its Law School.

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