Bullish or Bearish on Prop 19? Pegging Marijuana Legalization to Market Indicators

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After the 18th amendment to the U.S. Constitution was ratified and the National Prohibition Act to enforce it passed Congress in 1919 — over a veto by President Woodrow — Americans believed they would be stuck forever with the ill-fated law banning alcohol. After all, no Constitutional amendment had ever been repealed before. It’s the same disheartening feeling that has long plagued people who support changing the federal drug laws that ban marijuana use.

These days, however, they’ve been feeling somewhat more optimistic. For one thing, Californians are getting ready to vote on Prop 19, a marijuana-legalization initiative, on Nov. 2. What’s more, the current economic climate in the U.S. is similar to that at the end of Prohibition. But what does any of this have to do with national drug laws, you might ask? (More on Time.com: The Marijuana Number That Was Too Good to Check)

The Socionomics Institute, an organization that seeks to connect the mood of the stock market to the mood of the nation to predict social and economic change, recently released a report that associates lows in the economy with greater public tolerance for alcohol and drug use, and highs with legal crackdowns.

“In times of rising social mood, which we measure by the stock market, people become more optimistic,” says Euan Wilson, author of the report. “They feel good about the future. They have extra money. They decide to put this to use to improve things even more. For a lot of people, that comes down to issues of morality.”

Wilson adds: “Most people have a negative view of drug use, and they become more restrictive in times of rising social mood. The reverse happens in times of low mood. When people are worried that they might lose their jobs and their houses, issues of morality like drug use become a lot less important.”

But if you ask Daniel Okrent, a contributor to TIME and author of Last Call: The Rise and Fall of Prohibition, the public’s tolerance for alcohol and drugs may well be tied to the market, but it might not have anything to do with an attendant shift in moral views. He links the end of Prohibition in 1933 to the economic catastrophe of the Depression — and to the simple fact that the country needed cash. (More on Time.com: See photos of cannabis conventions).

Regarding California’s Prop. 19, Okrent says, “What’s interesting to me about it is that the title is ‘The Regulate, Control and Tax Cannabis Act.’ The word tax is key. What brought about the end of Prohibition was the need for tax revenue.”

So where do the experts put their money? Okrent thinks California will legalize marijuana. Wilson says he expects Prop 19 to pass too, noting that although the market has been rising lately, Californians are still feeling the effects of the crash and are feeling “desperate, angry and broke.” (More on Time.com: Is Drug Use Really on the Rise?)

Still, it’s not clear that a state initiative will affect the national conversation on drug policy. Ten years before Prohibition ended nationally, New York State repealed its enforcement of the alcohol laws (a bipartisan group of legal scholars recently noted this fact in a public letter of support for Prop. 19), but that didn’t lead the federal government to follow suit. “The Feds continued exactly as before. Of course, they were never terribly effective in New York, except for sporadic spasms of intensified crackdowns,” Okrent says. “This had no effect on the national movement.”

Clarification [Oct. 26]: The original version of this story conflated the Constitutional amendment that brought us Prohibition and the laws passed by Congress to enforce it. The story has been updated to correct the error.

More on Time.com:

Prop 19 Analysis: Will Marijuana Legalization Increase Use?

What’s in Your Marijuana? Some Pot Doesn’t Rot Your Memory

Is Marijuana Addictive? It Depends How You Define Addiction

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