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

This article is an essay. Its objective is to examine, from the point of view of normativeeconomics, 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 mainargument is that the analysis of market legalization must be normative, and empirical evidencederived from economic analysis is relevant to regulating the legalized market. The essay initially analyzes the expected functioning of the legal market and then presents theavailable empirical evidence. The essay also describes the central moral ideas underlyingpublic health policy evaluations. The essay defends an alternative moral idea to the traditionalones, based on maximizing individual freedom that is restricted to the freedom of othersand on the fact that consumers’ autonomy is limited. Finally, the discussion section speculateshow tolerance could produce gains in mutual well-being. The discussion is fundamentalin the results obtained from the paradoxes of Amartya Sen and Karl Popper. There aredistributional conflicts around subjective perceptions of well-being. In this sense, the conflictwould be dissipated by a win-win outcome in prevailing tolerance, implying a Kaldor-Hicksoptimal status quo. However, this conclusion is speculative and suggests an agenda for theoreticaland empirical research in economic analysis. JEL Classification: A12; A13; I18.