The political economy of cannabis legalization: moral ideas and the limits of economic analysis

Abstract

This article is an essay. Its objective is to examine, from the point of view of normative
economics, public policy regarding the legalization of cannabis for recreational use.
There are conflicting moral ideas when analyzing the legalization and regulation of this market.
It is also intended to highlight that this is a field of study in political economy. The main
argument is that the analysis of market legalization must be normative, and empirical evidence
derived from economic analysis is relevant to regulating the legalized market. The essay initially analyzes the expected functioning of the legal market and then presents the
available empirical evidence. The essay also describes the central moral ideas underlying
public health policy evaluations. The essay defends an alternative moral idea to the traditional
ones, based on maximizing individual freedom that is restricted to the freedom of others
and on the fact that consumers’ autonomy is limited. Finally, the discussion section speculates
how tolerance could produce gains in mutual well-being. The discussion is fundamental
in the results obtained from the paradoxes of Amartya Sen and Karl Popper. There are
distributional conflicts around subjective perceptions of well-being. In this sense, the conflict
would be dissipated by a win-win outcome in prevailing tolerance, implying a Kaldor-Hicks
optimal status quo. However, this conclusion is speculative and suggests an agenda for theoretical
and empirical research in economic analysis.

JEL Classification: A12; A13; I18.