Do education, bans and penalties curb drug use? Or does every supply create its own demand?

This ethos module is all about ‘stuff’ – not ‘curriculum content’ and certainly not textiles. It refers to what is colloquially often called ‘stuff’: it is about the trade in hard, illegal drugs. Our society takes a comparatively liberal approach to drugs such as alcohol and nicotine, even though the consequences of alcohol and nicotine addiction are serious – for the addict and those around them, as well as for society as a whole. Nevertheless, these addictive substances can be bought on almost every corner.

Retailers sell them, just like thousands of other everyday goods. There is a legal market for them. Even though they are, in some cases, heavily taxed, their price is still determined by the laws of supply and demand. Yet the trade in drugs such as cannabis, cocaine and heroin is prohibited, with the threat of prison sentences. Does this mean that the laws of supply and demand do not apply there? Or do they also apply to illegal markets such as the drugs market? After all, the trade in illegal drugs appears to be flourishing: according to government drug reports, drug consumption is currently at an all-time high.

This module is not about whether drug use is harmful or not. The answer to that is undisputed. The focus is on which approaches (repressive or liberal) the state can take in its anti-drug policy. What advice does the economist give the politician on this issue? Using this example – which is admittedly unusual for economic education and therefore particularly intriguing – the following questions can be discussed in depth in the classroom:

How does the market for illegal (‘hard’) drugs work? How is the price determined?
Why do some dealers give away their drugs for free?
Why can dealers charge their customers different prices for the ‘stuff’?
Why aren’t all drugs simply banned across the board (or legalised for consumption)?
How can harmful drug use be tackled more effectively and efficiently than has been the case so far?
Should previously illegal drug markets be legalised?
What experiences have other countries had with more liberal drug policies?

Pupils are confronted with the topic of ‘drugs’ at school because, as a group considered particularly at risk, they are to be warned of the negative consequences of drug use. This module takes a different approach and addresses them as responsible economic citizens and as politically engaged members of society. They are encouraged to form their own, fact-based and ethically informed judgement on alternative approaches to state drug policy.

Curriculum relevance: This ethos module can follow directly on from the teaching of general knowledge about how markets function (the laws of supply and demand) and the dynamics of price formation processes. All curricula for economic and political education also include an examination of the relationship between the market and the state. This module allows the state to be discussed as the shaper of the framework conditions for economic activity, and its actions can be analysed using economic concepts based on a specific example.