Saturday, November 17, 2007

The unintended consequences of prohibition

By Libby

This, via Radley, is a fascinating lesson in black market economics.

Billy and his parents had been at odds. The junior at Boulder’s Fairview High School, whose identity has been changed for this story, had been letting his hair grow and was routinely getting it styled. He was buying things without any visible means of income. A few weeks into the 2007 fall semester, he had a brand new iPod. He had new boots, new clothes and was talking about a new car.

“He had no friggin’ job,” his mother, Sue Anne, told Boulder Weekly. “His dad and I won’t let him have a job. We want him focused on school. We want him at Stanford after he graduates, so we don’t need him distracted by a job and all that comes with it. We don’t want him buying videogames and iPods.”

As money became less of an obstacle for Billy, the boy’s parents became more concerned. It had become common to see him with a one- to two-inch-thick wad of cash. They became certain he was dealing drugs.

He wasn't dealing drugs. He was dealing in a legal substance that was banned from his school for 'the good of the children' but the same dynamics apply. Prohibition doesn't stop anyone from getting their 'fix,' it just creates a black market to fill the demand.

[Ed. note: I see even the cached page is gone now. He was dealing in candy.]

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