According to a recently released report by the Afghan Ministry of Counter Narcotics and the United Nations Office on Drugs and Crime (UNODC), opium production in Afghanistan has risen by 43% in the last year. The country’s drug trade employs some 2.9 million people—12% of the Afghan population—and generates approximately $68 billion in revenue a year.

This increase comes despite the fact that drug eradication policies have been a cornerstone of US policy in Afghanistan since the invasion in 2001. In fact, winning the war on drugs in Afghanistan has been described as essential for winning the war on terror. The US government has spent some $12 billion in eradication efforts—more than four times the size of the entire pre-invasion economy. Yet, Afghanistan now supplies around 90% of the world’s opium.

This expansion of the opium economy in the face of such vast prevention efforts is actually a wholly predictable consequence of US drug policy.

Economics teaches us that banning a substance does not make it go away. Instead, it pushes the market into an underground or “black” market. Black markets lead to higher prices for banned goods. The higher prices for illegal opium have proved Afghan citizens a major incentive to produce opium on a scale never seen before.

As if the increase in the Afghan opium supply and $12 billion weren’t enough to illustrate the utter failure of US operations in Afghanistan, consider the fact that anti-drug operations have actually worked to strengthen the Taliban and undermine the war on terror. Again, economics can tell us why.

In addition to creating black markets, another classic consequence of prohibition is the rise of cartels. Enticed by the potential for high profits, organized crime may find lucrative business opportunities manufacturing and selling illegal goods.

Cartels form in a variety of illegal drug markets—from Chinese opium gangs in the early 1900s to Pablo Escobar’s multi-billion dollar cocaine empire in Colombia to Mexico’s cartels today. In each of these cases, existing criminal groups have taken advantage of their penchant for violence and working outside the law to earn serious cash.

In Afghanistan, the drug cartel is the Taliban. In fact, the terror group takes in an estimated $200-$400 million annually from the illicit opium economy. But US drug policy doesn’t just offer the Taliban a profitable business opportunity; it also drives Afghan citizens toward the terror group.

Recall that some 12% of Afghans work in the illegal drug trade. Many of these people are poor farmers. Farmers say other crops simply do not provide enough money to support their families. Growing poppy, with its high black market price, provides the opportunity for a better life. Not only does US policy threaten their source of income, but it automatically criminalizes a large segment of the population.

This has caused many people in Afghanistan to turn to the Taliban for help. Recognizing a big revenue opportunity, the Taliban began offering protection to farmers in exchange for payment or part of their crops. Farmers, desperate to preserve their incomes, obliged. This not only gives ordinary citizens a stake in Taliban success, but makes them much less likely to support or cooperate with coalition forces or the new Afghan government.

This local support combined with the desire of the Taliban to protect its business interests is bad news for US troops. The UN has acknowledged that the Taliban insurgency and drug trade are intimately linked. But research has also found that provinces producing more opium see higher levels of terror attacks. Moreover, there appears to be a correlation between spikes in the number of terror attacks and the months in which opium is harvested. This not only makes the job of US forces more difficult, it also puts them in real danger.

The fact that US eradication efforts in Afghanistan have been met with more opium production than ever would be laughable if it weren’t so lamentable. Simply put, US attempts to reduce the drug trade in the country have failed and are now effectively undermining the goals of the war on terror.

The best way to help Afghanistan is to get out of their way and allow for sovereign nations to rule without US interference. Not surprisingly, many scoff at such an idea. How could permitting the production and sale of drugs weaken a terrorist group that relies on such an industry for its income? Once again, the answer is basic economics.

Milton Friedman, the Nobel-winning economist, famously noted that, “If even a small fraction of the money we now spend on trying to enforce drug prohibition were devoted to treatment and drug rehabilitation, in an atmosphere of compassion not punishment, the reduction in drug usage and in the harm done to users could be dramatic.” The solution is as relevant today as it was when Friedman first offered it.

Indeed, when nations are allowed to control their domestic drug policies, dramatic reductions in drug use have often resulted. For example, Switzerland during the 1980s found itself battling a heroin epidemic that was increasing HIV/AIDS rates. Instead of cracking down on users and sellers, Switzerland adapted a harm reduction policy. This program opened free centers for addicts where they were given clean needles, high-grade heroin, showers, beds, and most important of all, treatment for their addiction.

The results speak for themselves—the majority of addicts were able to secure regular employment because they could focus on other things besides financing their addiction. Today, over 70% of opiate or cocaine users in Switzerland utilize harm reduction treatment centers. Contraction of HIV has dropped dramatically and so have drug overdoses.

Prohibition doesn’t work, and making something illegal doesn’t stop the sale and consumption of the item prohibited. Those who lose out most of all are the people of Afghanistan. For 15 years their country has been in chaos, in no small part thanks to US efforts. And without a serious change in policy, this problem is unlikely to go away anytime soon.