Australian governments spend about $4.7 billion a year on the war on drugs. This figure was arrived at using information from the Australian Drug Law Reform Foundation and other sources and is an estimate of how much the Government would save and get in tax revenue if illicit drug sales were regulated and taxed the way tobacco is.

I compiled the figure because of a growing interest in the economic consequences of the war on drugs launched by the US president Richard Nixon in 1971. Dr Alex Wodak, director of the Alcohol and Drug Service at Sydney's St Vincent's Hospital, observed in the Herald recently that there is a growing belief - across the political landscape - the war has been lost.

At the United Nations in 1998 there was acknowledgement that the war was not going so well, and a pledged of a renewed effort in reducing demand within 10 years. As the deadline approached, RAND Europe and the Netherlands' Trimbos Institute reported to the European Commission that they found no evidence the global drug problem had declined. Interventions against drug producers, such as coca growers in South America, caused local disruption but had little effect on global supply. Drug prices generally declined, even in those Western countries that toughened their law and order approach.

In 2005 a Harvard economist, Jeffrey Miron, produced a paper urging legalisation of marijuana because the prohibition had minimal benefits and could cause substantial harm, including the diversion of government spending that might be better used. Five hundred economists wrote to the American government supporting his call. They included the Nobel laureates George Akerlof, Vernon Smith, and the late Milton Friedman.

The debate in Australia could do with some economics. Dr Wodak said this week: "After 40 years, it's time to consider just what the war on drugs has really achieved, and at what cost. It would be very interesting to know just how much Australia has spent on drug law enforcement, and how much has been gained."