Three years into the government's 10-year
strategy to fight drugs, the war is over. The
government lost. Not only is Britain awash with
drugs, but they are more affordable and more
easily available than ever before. The time has
come to face the fact that drugs have become
just another part of our leisure activity.

British kids spend as much on Ecstasy as the whole
nation spends on tea and coffee. Cocaine is
almost as freely available as alcohol and is nearly 
as popular. And it is not just the young, the trendy or
the socially deprived who are recreational drug users. 
Everyone's at it.

Just a cursory study of the backgrounds of
people mentioned in drug-related stories in the
national newspapers turned up the following
occupations: plumbers, photographers,
psychiatrists, doctors, receptionists, accountants,
actors, dancers, chefs, waiters, investment
bankers, PR executives, television producers,
models, footballers, airline cabin crew, policemen,
solicitors, barristers and journalists.

No one wants to admit any of this because the
subject is a political, emotional, religious, social
and economic minefield. No one even wants to
discuss the fact that the war is over and that we
need to consider what we do now. This is
because accepting defeat would involve admitting
that the whole drugs war - both here and in
America - has been a sham. A strategy to bring
the drugs trade under control has always been
available, but this strategy is not acceptable in
the new global economic order.

If London and Washington were serious about
the drugs war they would hit the drugs barons
where it hurts - in their pockets. They could use
their powers to regulate banking and the
international electronic money transfer system to
halt the movement of illegal monies. But they
would also have to eliminate all off-shore banks
and tax havens as legitimate hide-outs for
capital.

But, of course, they cannot do that because
legitimate business in Britain and America does
not want the off-shore tax havens closed. The
hypocrisy of the drugs war is that Washington
and London say that they are waging war on
drugs when they know that there are more
important issues - namely banking and free
trade.

The accumulated profit from drugs, estimated at
$500 billion, sloshes around the world banking
system until it can be laundered, and the
money-laundering capital of the world is London.
True, the government has authorised the Bank of
England, the British Bankers' Association,
Customs and Excise, the Serious Fraud Office,
Scotland Yard, the City of London Police, the
Security Service and the Secret Intelligence
Service - all liaising through the National Criminal
Intelligence Service - to crack down on
drugs-money laundering. But where are the
10-year sentences for drug barons and the
financial services advisers who helped them wash
their money? Their absence is explained officially
as the difficulty in defining legally at what point
dirty money becomes clean.

But there is another, unofficial reason. City
institutions welcome the flood of drugs money
into Britain, arguing that it is safer for it to be
laundered and then go into legitimate financing
rather than move around unaccountably in the
black economy. And it's good business.

And here we are at the crux of why we lost the
drugs war - economics and the theory of the
market. Everyone underestimated the power of
the profit motive on the supply side and the
appeal of drugs on the demand side. All the
police, armies, secret services, prisons and
executions in the world cannot buck a market
where the tax-free profit on a kilo of cocaine is
20,000%. All the drugs education in the world
cannot overcome the fact that many people find
in drugs enormous pleasure and feel that the
state has no moral authority to deny them that
pleasure - even if there are health risks.

Another reason the anti-drugs campaigners lost
the war was that their strategy was wrong. They
should have said, "Mind-bending drugs have been
part of human culture since time immemorial.
Why, as recent as the early years of the 20th
century, heroin and cocaine were legal and
popular - Coca-Cola was originally made with
cocaine. True, the world might be a better place if
nobody took anything that could harm them. But
since they seem determined to do so, we need
to learn to live with drugs in such a way that they
do the least possible damage. Let's work out
what this way might be."

Instead they embarked on a crusade that was
based on racial and religious bigotry. American
racial contempt for the Chinese became focused
on their opium-smoking habits, and the
Protestant missionary societies in China and the
Women's Christian Temperance Union set out on
a moral campaign to protect the white world
from the horrors of opium.

Even today, the war against drugs remains in
many ways a religious matter rather than a
law-and-order one. The anti-drug lobby speaks of
drug-taking as "evil . . . immoral . . . a sin . . . an
offence against God that can result in the loss of
your soul". Yet how can a campaign be a moral
one when, as the Nobel prize-winning economist
Milton Friedman says, "It leads to widespread
corruption, imprisons so many, has so racist an
effect, destroys our inner cities, wreaks havoc on
misguided and vulnerable individuals and brings
death and destruction to foreign countries?" He
might have added: how can the campaign be a
moral one when it so terrifies American doctors
that they turn away from their patients' cries of
pain and refuse to prescribe morphine for them in
case they run foul of the Drug Enforcement
Administration for over-prescribing?

With the war over, where do we go from here?
How about licensed sales outlets for drugs, a sort
of drugs off-licence, where initially cannabis and
Ecstasy would be on sale at reasonable prices.
There would be a minimum age for purchase, just
as there is now for alcohol and tobacco. The
drugs would be supplied by licensed
manufacturers to ensure the purity and safety of
the product. Driving under the influence of drugs
would carry the same penalties and stigma as
driving under the influence of alcohol.

Drugs off-licences would save Britain the £800m
a year spent on enforcing anti-drug laws. If the
drugs were taxed at the same rate as alcohol
and tobacco they would provide the Treasury
with revenue of at least £1 billion a year. They
would cut the prison population by 10% at a
stroke, reduce crime and violence and put the
drug bosses out of business.

I have little hope that such a scheme will be
adopted. It is too logical and, as the American
psychiatrist Thomas Szasz has pointed out, it is
useless to present facts and logic to the
anti-drugs lobby. He says the war on drugs is a
mass movement characterised by demonising
certain objects and persons - "drugs . . . addicts .
. . traffickers" - as the incarnations of the devil.
Hence there is nothing to be gained by trying to
point out to its supporters that the anti-drugs
lobby has lost the war. "Since he wages war on
evil, his very effort is synonymous with success."