Chapter 6: Introduction
Crime and Drugs: A Modern Dilemma

This chapter introduces the concept of a public good and contends that the establishment and enforcement of a system of property rights is a public good. It argues that the efficient provision of public goods requires government intervention. Therefore, a private market system can not provide public goods efficiently. The existence of property fights enforceable by government leads to crime. So the chapter discusses the efficient level of crime control.

Within this context, the issue of drug use and abuse is raised. Normative and positive aspects of drug control are discussed. Demand and supply analysis is the main tool The chapter emphasizes the unintended consequences of drug prohibition and drug legalization.

Instructional Objectives

After completing this chapter, your students should know:

1. What a public good is and why the existence of public goods leads to a role for government.
2. Why the establishment of a system of property fights is important.
3. That property fights provision is a public good.
4. Why the effident level of crime is not zero.
5. The morality arguments for and against drug legalization.
6. The consequences of drug prohibition.
7. The consequences of drug legalization.

Terms from Previous Chapters

You should review the terms in this section at the beginning of your discussion of the chapter.

property rights (Chapter 2)
marginal social benefit (Chapter 2)
marginal social cost (Chapter 2)
opportunity cost (Chapter 1)
demand (Chapter 1)
supply (Chapter 1)

Key Terms
These terms are introduced in this chapter:

public good
nonexcludable good
nonrivalous good
free rider

Additional References

In addition to the references in the text, instructors may wish to read or assign one or more of the foliowing:

1. "Bring Drugs within the Law" and "Drug Policy: the Enemy Within;" The Econom/st (May 1993), pp. 13-14 and 31.
2. Edwin J. DeLattre, "New Faces of Organized Crime," The American Enterprise 1 (May/June 1990), pp. 38-45.
3. Peter Kerr, "The Detoxing of Prisoner 88AO802," The New York Tunes Magazine (June 27, 1993), pp. 23-27 and 58-59.
4. Ethan A. Bodelman and David T. Courtwright, "Should We Legalize Drugs? History Answers," American Heritage (February 1993), pp. 41-48.
5. Edward J. Nell, "The Dynamics of the Drug Market," Challenge (March 1994), pp. 1321.
6. Robert P. Thomas, Economics: Pdncil~les andApplications, Chapter 5, "The Economics of the Public Sector" (Hillsdale, lll.: Dryden Press, 1990), pp. 174-223.
7. Timothy Tregarthen, 'q~he Drug War: Battling Supply and Demand,' The Marg/n 5 (January/February 1990), pp. 17-22.
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