legalization will do what?

Fester over at Newshoggers proposes that we legalize all drugs and put high taxes on them in order to drive drug lords out of business. He makes an excellent point that drug lords are only becoming more and more powerful, and that Mexico is becoming destabilized, possibly to the point of becoming a criminal-controlled state, which would be a disaster for the US. This argument is good in theory, i.e., US pharmaceutical companies could make heroin and cocaine, etc., much more cheaply than the drug lords and could then drive them out of business.

What it fails to recognize is that drug lords don’t compete along capitalist lines, they compete along lines of both market and projection of violence. If big US pharmaceutical companies become competitors, then drug lords will have the executives executed, chemists murdered or kidnapped, and normal employees bullied and harassed. There will be no way the companies can provide sufficient security; they would have to secure every employee’s home. Also, if the companies have to greatly increase security, then that greatly increases their costs, meaning the drugs they produce won’t necessarily be that competitive against drug lords with established markets.

As a side note, high taxes will be counter-productive, decreasing the competitiveness of legally-manufactured drugs, as I noted earlier.

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h/t Instapundit, who seems to like the idea.