[h3] Federal Reserve Bank High School Essay Contest Focuses On Economic Lessons From Illegal Drug Markets [/h3] http://www.csdp.org/news/news/communities.htm It was announced in late October 2005 that "the Federal Reserve Bank of Minneapolis has decided to ask the following question for its 2005–2006 Student Essay Contest: 'What economic lessons can be drawn from this picture of an illegal drug deal?'"
According to the Minneapolis Fed's announcement, "As this picture illustrates, however, making a product illegal does not eliminate the market for it. The Office of National Drug Control Policy estimates that Americans spent about $65 billion on illegal drugs in 2000, more than the amount spent on cigarettes. Worldwide, the drug business is worth about $400 billion. Drugs are also a big concern to politicians, with government spending an estimated $40 billion to $60 billion annually to fight the 'war on drugs.'
"Potential profits from selling drugs have led to violent crime in America’s inner cities and elsewhere, causing some to ask whether there is a better way to address the problem. Some have proposed tougher enforcement. Others have suggested moving away from a criminal law strategy toward a public health approach, and still others have proposed legalizing drugs altogether.
"These are emotionally charged and controversial issues, but perhaps by taking the cool view of an economist we can gain some perspective. Fundamental concepts, such as externalities, cost-benefit analysis and black market economics, can shed light on policies and individual behavior related to illegal drugs."
Student essay deadline is March 24, 2006. Click here for more information about the Minneapolis Fed's student essay contest. Also, read this article from the Minneapolis Star Tribune on Oct. 22, 2005, "Not Your Typical Essay Contest: 3 Pages On Cash, Drugs, Crime".