I was struck a couple of years ago by the drug-interdiction effort in the Bahamas. We had intercepted during the year an estimated $5 billion street value of cocaine. I don't know how much got through. Nobody has any credible estimate. The total gross national product of the Bahamas is probably somewhere between $1-2 billion. So you get an idea of the leverage there and elsewhere that our market for drugs has brought about.

I welcome the emphasis that is now being put on the drug problem. The efforts —

•    to get to the people who are addicted, try to rehabilitate them (if they cannot be rehabilitated, at least contain them);
•    to educate people;
•    to strongly discourage use of drugs by people who are casual users and first users;
•    to stop this process among the young
— are extremely important.

But I have to tell you that it seems to me that the conceptual base of the current program is flawed and the program is not likely to work. The conceptual base — a criminal justice approach — is the same that I have worked through before, in the Nixon administration when I was budget director and secretary of the Treasury with jurisdiction over Customs. We designed a comprehensive program, and we worked hard on it. In the Reagan administration we designed a comprehensive program; we worked very hard on it. Our international efforts were far greater than ever before. You're looking at a guy whose motorcade was attacked in Bolivia by drug terrorists, so I'm personally a veteran of this war.

What we have before us now is essentially the same program but with more resources plowed into all the enforcement and control efforts. These efforts wind up creating a market where the price vastly exceeds the cost. With these incentives, demand creates its own supply and a criminal network along with it. It seems to me we're not really going to get anywhere until we can take the criminality out of the drug business and the incentives for criminality out of it. Frankly, the only way I can think of to accomplish this is to make it possible for addicts to buy drugs at some regulated place at a price that approximates their cost. When you do that you wipe out the criminal incentives, including I might say, the incentive that the drug pushers have to go around and get kids addicted, so that they create a market for themselves. They won't have that incentive because they won't have that market.

So I think the conceptual base needs to be thought out in a different way. If I am catching your attention, then read a bold and informative article in this September's issue of Science by Ethan Nadelmann on this subject. We need at least to consider and examine forms of controlled legalization of drugs.

I find it very difficult to say that. Sometimes at a reception or cocktail party I advance these views and people head for somebody else. They don't even want to talk to you. I know that I'm shouting into the breeze here as far as what we're doing now. But I feel that if somebody doesn't get up and start talking about this now, the next time around, when we have the next start of these programs, it will still be true that everyone is scared to talk about it. No politician wants to say what I just said, not for a minute.

George P. Shultz, Adapted from an informal talk on Oct. 7, 1989, by the former Secretary of State (under President Reagan) and Secretary of the Treasury (under President Nixon) to an alumni gathering at Stanford Business School. A version of this talk appeared in The Drug Policy Letter, November/December 1989, p.3.