In the start of the colonial period, the drug trade of tobacco sustained both Virginia and New England, allowing each settlement to thrive and grow into thriving American societies due to economic success. Then, in 1619 an english ship would bring women to Jamestown for sale as wives. Tobacco would be used as currency. While Virginia used tobacco for both economic and recreational purposes, around the same time a similar thing was happening in New England with Rum. By 1770, New England would host about 143 separate distilleries, which would produce approximately 5 million gallons of the liquor each year. [Schmoop]
Opium has played a big role in America’s economic history. Ancient Sumerians were known to call it the “Joy Plant,” due to its healing properties. Egyptians would trade opium throughout the Mediterranean. It is believed that Arab Merchants introduced Opium to China sometime in the 7th century. English Merchants under the title “British East Indian Company” would manage supply chains throughout Europe and East Asia. When Chinese leaders felt as if this was a threat to the power hey had over their own economy, they tried to intervene. The British would then provoke the “Opium Wars.” It wasn’t until the American Civil War that opiates would spread into the United States and become commonplace. Soldiers suffering from both psychological and physical pain would be be the first addicts of Opium. Morphine would then be invented in the 1820’s, revolutionizing healing potential as it was quickly delivered into the bloodstream emphasizing the effects. Morphine and opium would be used in healthcare for decades. In 1895, German pharmaceuticals creator Bayer would invent Heroin, which was branded to be even more powerful than aspirin. In 1890 the US Government would start taxing Opium. The Pure Food and Drug Act of 1906 would mandate manufacturers disclose the contents of their products. Then, in 1909, Congress would pass the Opium Exclusion Act which would ban import for smoking purposes. [Washington Post]
The first piece of legislation regarding marijuana would be in 1619 when farmers were encouraged to grow hemp. Founding Father, Benjamin Franklin would endorse this both economically and on a societal level. Hemp was used to write on, as well as other practical purposes unrelated to drug use. Eventually, in 1937 the government would enact the 1937 Marijuana Tax Act. The government believed that marijuana’s wide usage would be competitive with other everyday products. Soon, however, all forms of cannabis would be made illegal. However in 1948, congress would come to the conclusion that marijuana was made illegal for the wrong reasons, and it was never proven to make citizens violent or hostile, but rather had the opposite effect. Due to the Red Scare, the government was afraid communists would use marijuana to “weaken Americans’ will to fight.” Congress would then vote to keep marijuana illegal, except this time for the exact opposite reason than the one they had used to outlaw it originally. [Hector A. Canciano]
Until approximately the late 1970’s, cocaine was primarily trafficked into the US in small quantities on small fish boats, or through airport security packed into luggage. However, the 1980’s glamorized the drug and there was a new demand for it. Colombian drug lord, Pablo Escobar would feed off of this rise in popularity and become the face of drug trafficking throughout the late 90’s. He would account for about 80% of the cocaine smuggled into the United States during this time, an unmatched amount.
In 2007, the cost of drug use on the economy in the United States was estimated at roughly $193 billion. This is the last available estimate. This estimate is comprised of various expenditures. $120 billion was lost in workplace productivity. This was related to labor participation costs as well as participation in drug abuse treatment, incarceration, and early death. About $11 Billion was spent in healthcare costs related to treatment of drug addiction as well as the drug-related health consequences. About $61 billion was spent in criminal justice costs. These included but were not limited to investigation, prosecution and subsequent incarceration, as well as victim costs. In 2009, most of current drug users (67%) aged 18 or older were employed, either full‐time (about 48%) or part‐time (approximately 19%) Unemployed individuals accounted for about 13% and the remaining accounted for 21% not in the labor force.
In 1612, according to Tobacco News and Information, Englishmen in Virginia found the importance of Tobacco in the economy. It quickly became the staple of the Chesapeake colonies, selling profitably in England. As gold and silver became scarce, the colonies began to rely on tobacco as means of currency because of the safety, stability, and value that the product brings in exchange for gold. Tobacco currency was also used to pay fines and taxes and laws were made to protect it and maintain it. Overall, tobacco provided the colonial governments one of their principal sources of revenue. In 1680, Virginia yielded 3,000 pounds of tobacco, equivalent to $4,541 and between the years of 1758 to 1762, revenue grew to 6,000 pounds worth $9,082. From 1700, proceeds remained steady at 2,500 pounds or $3,784 [1].
The United States Department of Agriculture released an Agricultural Economic Report about the U.S. Tobacco Industry in the 1800’s and 1900’s . Throughout the 1800’s and 1900’s, tobacco production and revenue continued to grow steadily, giving support to the states. In 1839, tobacco production reached 219 million pounds and by 1898 it reached over 900 million pounds [2].
In the 1900’s, the United States became the world’s leading tobacco exporter and the second largest tobacco producer with over 2.12 million acres available to plant in 1930 [3]. In the mid 1900’s, the introduction of cigarettes quickly became the primary product made from tobacco, with a consumption peak at 640 billion cigarettes in 1981, accounting for about 85% of tobacco use [4]. Total expenditures for cigarettes increased about 900% in 1950-1986, from $3.6 billion to $31.8 billion and federal tax collections from cigarette sales rose 367%. In 1985, tobacco production amounted to over $2.6 billion and the US consumers spent about $34 billion on tobacco products [5].
Now, in the 2000’s, due to the Master Settlement act of 1998, when the four major cigarette manufacturers were sued and told to recover Medicaid and other costs the states incurred in treating sick and dying cigarette smokers, the desire to smoke has decreased dramatically. Smoking is now directly related to economic health care issues and is attributable to expenditures of $96 billion in early 2000s [6]. It is proven that lifetime health care costs for smokers are significantly higher than those of non smokers, creating a different stigma around the idea of tobacco compared to the views in the 1600’s.
Works Cited
[1] Middleton, A. (1953). Tobacco Coast. Newport News, Virginia: Mariners’ Museum. p. 112
[2] Grice, V., Griffin, K. (1988). The US Tobacco Industry. United States Department of Agriculture, 589, 2.
[3] Grice, V. p. 13.
[4] Grice, V. p. 2.
[5] Grice, V. p. V.
[6] Fong, G., Chaloupka, F. (2013). Tobacco, Economics, and the Development in the 21st Century, Harvard University. Slide 5.
The history of alcohol in America is tied closely to the history of the country. The first settlers landed in Jamestown and Plymouth with more beer in store than water. Wine and brandy were also carried over from Europe. When alcohol supplies ran out, settlers made more, using the natural resources of their new surroundings. Records of distillation go as far back as the mid-17th century. Colonists throughout New England made rum, corn whiskey and apple liquor. From these humble origins, and despite several setbacks, the American alcohol industry grew strong. You could buy one gallon of rum in the 1740s for 1 shilling and this lead to trading among the colonists and other nations. Most colonist in the colonies drank a total of 40 gallons of alcohol pre-year. During this era, each gallon of alcohol cost 1-5 shilling which means that the alcohol industry made about 40-200 shilling per year. This was considered a lot of money for this time period.
The alcohol industry continued to profit throughout the 1700’s, and the 1800’s until the year 1920 when the Prohibition era in the United States began on January 19, 1920. Prohibition in the U.S was started because religion swept through the United States. These religious groups demanded that the United States need to prohibit the sale of alcohol. In addition, the cause of prohibition is due to women wanting their husbands to stop drinking because they believed it destroys families. After the 18th amendment passed, over 200 distilleries and over 170,000 liquor stores led to the elimination of thousands of jobs, and in turn thousands more jobs were eliminated for barrel makers, truckers, waiters, and other related trades. One of the most profound effects of Prohibition was on government tax revenues. In New York, almost 75% of the state’s revenue was derived from liquor taxes. At the national level, Prohibition cost the federal government a total of $11 billion in lost tax revenue, while costing over $300 million to enforce. Even though prohibition made alcohol illegal in the United States there were many people who still made alcohol and still drank it, and these people were called bootleggers.
Once prohibition ended with the repeal of the 21st amendment in 1933 revenues in the alcohol industry grew significantly. Today alcohol beverages generate 50 times more revenue than they did in 1934. The U.S beverage alcohol industry is a major contributor to the economy, responsible for over $475 billion in total U.S. economic activity in 2014, generating $110 billion in wages and nearly 4.6 million jobs for U.S. workers. In 2014, distilled spirits accounted for over $150 billion in total economic activity, or 31% of total economic activity from all beverage alcohol. It also collects around $5.5 billion each year from taxes on alcohol, with state and local governments taking another $6 billion.
Work cited
History channel. “Prohobiton ends” http://www.history.com/this-day-in-history/prohibition-ends
“Economic contributions of the distilled spirits industry” Distilled spirits council http://www.discus.org/economics/
“The price availability of alcohol.” NCBI. https://www.ncbi.nlm.nih.gov/books/NBK217454/
Beverage Dynamics “ 6 Historical Events that Shaped the Alcohol Industry”http://beveragedynamics.com/2015/12/21/6-historical-events-that-shaped-the-alcohol-industry/
Libraries “Negative Economic Impacts of Prohibition.” http://digitalexhibits.libraries.wsu.edu/exhibits/show/prohibition-in-the-u-s/negative-economic-impacts-of-p
WETA “ Unintended Consequences.” PBS, http://www.pbs.org/kenburns/prohibition/unintended-consequences/
In the 17th century, the American production of hemp was widely used, for things such as ropes, sails, and clothing, and was encouraged throughout the United States. To emphasize the importance of hemp in the 1600’s, the Virginia Legislature passed a law requiring every farmer to grow hemp and allowed it to be exchanged as a legal tender in Pennsylvania, Virginia, and Maryland [1]. By the early 1900’s, the recreational use of Marijuana was introduced to the American culture through the Mexican immigrants, and was quickly feared by some of the public and government. This fear pushed the government to create the Marijuana Tax Act in 1937. The act was passed by the Congress in which it made the drug extremely difficult to obtain in legally. By the 1950’s, a first-offense marijuana possession carried a minimum sentence of 2-10 years with a fine up to $20,000 [2].
However in 1970, Congress repealed most of the mandatory penalties for drug-related offenses. It was widely acknowledged that the mandatory minimum sentences of the 1950s had done nothing to eliminate the drug culture that embraced marijuana use throughout the 60s, and that the minimum sentences imposed were often unduly harsh. Congress categorized marijuana separately from other narcotics and eliminated mandatory federal sentences for possession of small amounts [3].
The controversy of marijuana has been a highly heated topic throughout the last hundreds of years, however, with the legalization of marijuana in 2014, the economy has benefited greatly. States like Colorado, Washington, and Oregon saw a significant economic boost since the legalization of the drug. In Colorado, over 23,000 jobs were created, about $175 million made in tax revenue in 2016, and over $1 billion worth of marijuana was sold in 2016 alone [3]. In Washington, 23,000 jobs were also created, $241 million in tax revenue, and also broke the billion-dollar threshold in 2016 with more than $1 billion in marijuana sales [4]. Another state, Oregon, has also seen an economic improvement since the legalization. 11,500 jobs were created, over $55 million made in tax revenue, and $160 million generated in revenues [5]. With these statistics, we are likely to see more states around the nation begin to legalize marijuana.
Works Cited
[1] Will, O. (2004). The Forgotten History of hemp in the American Culture. The Farm Collector.
[2] Martino, J. (2012). How hemp became illegal: The marijuana link. Collective Evolution.
[3] Martin, S. (2016). A Brief History of Marijuana Law in America. TIME.
[4] Gillies, T. (2017). Colorado economy: Low unemployment, high pot sales. CNBC.
[5] Tyrone, T. (2017). Going Green: Washington’s economy after legalization Seattle Metro Magazine.
[6] Quornsome. (2017). Oregon’s Economic Benefit from Legal Weed. The Libertarian Republic.
The earliest reference to opium growth and use is in 3400 B.C. when the opium poppy was cultivated in lower Mesopotamia. The Sumerians referred to the opium poppy as “Hul Gil” – the “Joy Plant,” and would pass the plant and its euphoric effects onto the Assyrians, who in turn passed it on to the Egyptians.
Around 460-357 B.C., Hippocrates, the “father of medicine,” acknowledged opium’s usefulness as a narcotic and styptic in treating internal diseases, diseases of women and epidemics.
Alexander the Great introduced opium to India near 330 B.C., and the Arabs, Greeks and Romans used it as a sedative.
During the Inquisition, opium disappeared from European historical record as anything from the east was linked to the devil. In 1527, Swiss-German alchemist, Paracelsus, who founded the discipline of toxicology, introduced opium pills containing citrus juice and as an analgesic. He called this preparation Laudanum, derived from the Latin verb laudare, to praise. Laudanum remains available by prescription in the United States.
In 1806 the German chemist Friedrich Wilhelm Adam Sertürner isolated morphine from opium. Morphine soon became the “mainstay” of medical treatment in the United States throughout the nineteenth century, used to treat pain, anxiety and respiratory problems.
In 1853, the hypodermic needle was invented, after which morphine began to be used in minor surgical procedures to treat neuralgia and gave rise to the medicalization of opioids. Because of the abuse associated with morphine, a safer alternative was sought.
Heroin was synthesized as a derivative of morphine in 1898. Heroin became known as a cough suppressant and as a “non-addictive” morphine substitute for medical use.
In 1909, Congress passed the Opium Exclusion Act barring importation of opium for the purposes of smoking. In a similar manner, the Harrison Narcotics Tax Act of 1914 placed a nominal tax and required physician and pharmacist registration for the distribution of opiates, but served as a de facto prohibition of the drugs.
Many medicines that were derived from opioids and already being sold such as codeine, morphine and oxycodone, were still allowed to be used by physicians despite the passage.
From the 1950s until the 1970s, Oxycodone became widely available when it was approved by the FDA in 1950 as Percodan® (oxycodone and aspirin tablets). Since the early 1960s, abuse of prescription opioids containing oxycodone has been a continuing problem in the U.S.
In 1969, the World Health Organization (WHO) abandoned the belief that the medical use of morphine led inevitably to dependence. The Controlled Substances Act was passed in 1970 and began to consolidate all of the regulated prescription narcotic/opioid drugs under existing federal law into five separate schedules. The schedules were based upon the substance’s medicinal value, harmfulness and potential for abuse or addiction. Schedule I is reserved for the most dangerous drugs that are no longer allowed to be prescribed.
In 1984, physicians explored the use of prescription narcotics/opioids to treat cases of pain that were not due to terminal illness. In response to the growing recognition of the need to manage pain, a number of prescription opioids that were formulated to release their medicine over a period of time entered the market, continuing into the 2000s.
By 1999, an estimated 4 million people, about 2% of the population age 12 and older, were using prescription drugs non-medically. Of these, 2.6 million misused pain relievers, 1.3 million misused sedatives and tranquilizers, and 900,000 misused stimulants.
The abuse and misuse of opioid products containing oxycodone and hydrocodone, including brands such as OxyContin, Vicodin, Percocet and Lortab increased significantly in the early-to-mid 2000s, doubling between 1998 and 2008.
In 2002, 6.2 million Americans were abusing prescription drugs, and emergency room visits resulting from the abuse of narcotic pain relievers had increased dramatically.
The misuse and abuse of prescription painkillers was responsible for more than 730,000 emergency department visits in 2009, a number that nearly doubled in just five years.
As a result of the increase in misuse and abuse of prescription painkillers in the early 2000s, pharmaceutical manufacturers and the FDA have responded with product formulations that contain abuse-deterrent properties and have supported education on proper opioid prescribing and use. Forty-eight states have implemented prescription drug monitoring programs.
The $25 billion estimate on which the state analysis is based represents total health care costs associated with opioid abuse. According to Birnbaum et al. (2011), this cost is almost entirely (approximately 95%) attributable to excess medical and drug costs. Substance abuse treatment, prevention, and research account for the remaining 5% of the total health care burden. Beyond health care costs, other significant economic burdens are associated with opioid abuse. These include costs related to criminal justice, estimated at $5 billion nationally, and lost workplace productivity, estimated at $25.5 billion (Birnbaum et al. 2011). In total, opioid abuse imposes an estimated $55 billion in societal costs annually. $7.6 billion in criminal justice costs 96% of costs fall to state and local governments. $41.8 billion in lost productivity 57 in 10 employers experience issues associated with prescription drug misuse, such as employee absenteeism, decreased job performance, and injury.
In 2013, workers’ compensation insurers in California will spend about $100 million on tests, up 200-fold since 2002. The estimated size of the U.S. screening industry from 2013 has been $2 billion.
The number of prescriptions dispensed for two drugs increasingly given to treat opioid addiction — buprenorphine and naltrexone — has soared along with opioid use.
In 2011, there were over 800,000 cases in which an opioid other than heroin was cited as a reason for an emergency-room treatment. The cost of four to six weeks of inpatient treatment at a private facility can range from $20,000 to $32,000.
Workers’ compensation costs include treatment expenses and lost wages. The stronger the opioid, the higher the expense. The average claim cost without the use of opioids is $13,o00. However, costs with short-acting opioids like Percocet is $39,ooo and costs with long-acting opioids like OxyCotin is $117,000.
Between 2001 and 2008, narcotics prescriptions as a share of all drugs used to treat workplace injuries jumped 63 percent, according to insurance industry data. In California, workplace insurers spent $252 million on opioids in 2010, which represented about 30 percent of all prescription costs; in 2002, opioids accounted for 15 percent of drug expenditures
The sales of opioids have increased up to 110%, being $3.97 billion in 2002, and $8.34 billion in 2012. In the same manner, opioid prescriptions have increased up to 33%, being 181.7 million in 2001, and 240.9 million in 2012.
Works Cited
“A Brief History of Opioids.” The Atlantic, Atlantic Media Company, www.theatlantic.com/sponsored/purdue-health/a-brief-history-of-opioids/184/.
Matrix Global Advisors, LLC. “Health Care Costs from Opioid Abuse: A State-by-State Analysis.” Apr. 2015, drugfree.org/wp-content/uploads/2015/04/Matrix_OpioidAbuse_040415.pdf.
United States, Congress, U.S. Economic Committee, and Lisa N. Sacco. “Economic Aspects of the Opioid Crisis.” Economic Aspects of the Opioid Crisis, 8 June 2017. www.jec.senate.gov/public/_cache/files/e113fdc0-8974-44bb-9dcc-c30a884b6e1e/sacco-testimony-060817.pdf.
“The Soaring Cost of the Opioid Economy.” The New York Times, The New York Times, 22 June 2013, www.nytimes.com/interactive/2013/06/23/sunday-review/the-soaring-cost-of-the-opioid-economy.html.
We think that if an individual were to get caught with a schedule 1 drug they should be immediately sent to a detox center, which would make sure the individual was going through withdrawal symptoms in a safe environment with the right and necessary care. After they have detoxed they should be admitted into a residential rehabilitation center. The rehab centers should be segregated regarding gender so the patients focus on themselves and getting better without distractions.
If an individual is caught with a schedule 2 drug who is under the age of 21, they should be subject to Intensive Outpatient (IOP), a less severe type of treatment. After completing IOP, they should be drug tested for a month or two to make sure they stay clean.
If an individual is caught with a schedule 3 drug who is under the age of 18 they should be subject to 12-24 hours of community service depending on the amount they had in their possession. They could also be made to attend a class educating the individuals on the harm these drugs can do to the brain. They should also have their license revoked for 6 months or until their 21 depending on the quantity of the drug they were found with.
Also, all these drugs should be regulated, sold at dispensaries. All schedule 2 drugs should be sold at the same dispensary and a have maximum quantity that a person can buy at a time. All schedule 3 drugs should be sold at a the same dispensary, different from the schedule 2 dispensary, and the quantity given out to an individual should be regulated. If these rules/laws were put into place, the economy would boost greatly. Dispensaries would generate millions of dollars through regulating drugs. Marijuana legalization has generated over millions of dollars, if we were to legalize schedule 2 and 3 drugs, imagine how much money the government and small businesses would be making. This would also create new jobs for the overall population.
IOP, Rehab, and detox centers would generate a lot of money for the government. With drugs becoming legal, more people are prone to trying drugs, getting addicted, or getting caught. This would increase the number of individuals entering treatment which means more money for treatment/detox centers.
We would be saving money not through direct payments, but rather through the substantial amount of money saved from occupied prison cells. Currently minor drug offenders account for a substantial amount of occupied prison cells per capita, and while the amount each institution spends on each prisoner varies, they are always astronomical. This would be a monumental increase to the United States Government’s economy.
