Omar Ornelas / The Desert Sun / AP Former Mexican President Vicente Fox in La Quinta, Calif., in 2009

As Mexico drowns in drug-related bloodshed  suffering almost 12,000 murders in 2010  it is perhaps unsurprising that government critics have turned up their screaming that the war on drugs isn't working. But it was a bit of a bombshell when former President Vicente Fox added his voice to the chorus. The cowboy-boot-wearing leader, who ruled Mexico from 2000 to 2006, once declared the "mother of all battles" against crime and rounded up drug kingpins. But before he left office, he witnessed the first big spike in violence as the narcos retaliated. Last August, evidence surfaced that his vision had changed when he wrote on his blog that prohibition wasn't working. Now, in an interview with TIME in his hometown in central Mexico, he says his views have indeed moved toward the other end of the spectrum: favoring full-on legalization of the production, transit and sale of prohibited drugs. Fox is most explicit about marijuana but says the principle applies to all illegal drugs.

"Prohibition didn't work in the Garden of Eden. Adam ate the apple," says Fox, 68, looking relaxed in a polo shirt  in contrast to his stressful last days in office. "We have to take all the production chain out of the hands of criminals and into the hands of producers  so there are farmers that produce marijuana and manufacturers that process it and distributors that distribute it and shops that sell it ... I don't want to say that legalizing means that drugs are good. They are not good but bad for your health, and you shouldn't take them. But ultimately, this responsibility is with citizens." (See "Mexico's Lost Youth: Generation Narco.")

Taking such a step would go beyond policies pursued anywhere in the world. While nations including Portugal, Holland and Mexico itself have decriminalized the personal possession of many narcotics, traffic and the billions of drug dollars remain firmly in the hands of criminal gangs. Governments have been held back from going the distance to legalize and regulate the trade by rigid U.N. treaties, which oblige all signatories to combat trafficking. Fox, however, argues that nations should not wait for the whole world but plow ahead with reform. (See how California's pot proposition agitated Latin America.)

"It is not necessary that there is a global change," he says. "Always, in every human action, there are leaders. There are people that go ahead, that see problems before the rest, that take decisions before the rest." As an example, he goes on, California's Proposition 19 to legalize cannabis would have been a gigantic step forward. (Prop 19 missed being passed in November, with 46.5% in favor and 53.5% against.) "It is a shame that the proposal to legalize did not prosper," Fox says. "It would have been a great thing, a benefit to California, the United States and for Mexico. It would have been a first step." Mexican cartels make billions exporting marijuana to the U.S., as well as trafficking cocaine, heroin and crystal meth. (See a video on narcocorridos, the songs of drug gangs and violence.)

Fox is the latest in a series of former Latin American Presidents to question the war on drugs. In 2009, former Mexican President Ernesto Zedillo, former Colombian President César Gaviria (who oversaw the killing of cocaine cowboy Pablo Escobar) and former Brazilian head Fernando Cardoso all released a statement saying the war on drugs had failed. However, typical of the drug debate, the politicians all made the statement after they had left office, with drug legalization seen as a toxic vote loser. Fox says his position has changed because the situation itself has changed and because prohibition has become far more costly for Mexico.

"Every idea has its time," Fox says. "When I was in government, things were not as bad as they are now. There is a growing cost in not resolving this problem, in not finding a form of truce, a way to avoid the brutal violence that is hurting Mexico. The cost is growing exponentially ... I see important businessmen leaving and going to San Antonio, Houston, Dallas. We are losing in many things: tourism is stagnant, trade on the border, nightclubs, hotels are all stuck. We don't deserve to pay this price."

Fox's position has put him at loggerheads with Mexico's current President, Felipe Calderón, who is firmly against drug legalization. In response to Fox's statement that the war isn't working, Calderón has accused former Mexican Presidents for not taking on the drug gangs during their terms in office and letting the organizations grow into monsters. Fox himself is criticized for the 2001 prison escape of trafficker Joaquin "Chapo" Guzman, who has since become the most high-profile drug lord in Mexico.

When asked about the notorious breakout, Fox concedes that it was a serious setback but argues that it was not emblematic of his administration. "One swallow does not make a summer. It is an important case, but it is not the hallmark of my government." The Fox era also saw major drug seizures, arrests of 74,000 suspects on drug charges and major extraditions to the U.S.

Under Calderón, Mexican forces have made even more arrests, bigger seizures and record extraditions  winning praise and $1.4 billion in support from the U.S. But each kingpin who goes down only appears to provoke more bloodshed, as lieutenants war with one another to take over turfs. In total, there have been more than 30,000 drug-related killings in the four years since Calderón took office, compared with some 7,000 in the last four years of Fox's tenure. Such relentless murder, Fox argues, shows that the drug war cannot be won through strength of arms.

"I believe that violence against violence doesn't work. It only unleashes more violence and a conflict of the size we have in Mexico," Fox says. "And it is not only in people's income, in investment, but also in the collective psychology. There is fear in the country. And when you have an environment where there is no harmony, no peace and tranquility, then no human being can make the best of themselves."

See pictures of a Mexican meth gang waging a holy drug war.