Question: How does Objectivism treat the question of the victimless crimes? Does Objectivism support the view that drugs should be legalized because drug abuse per se is only (potentially) harmful to the abuser and has no immediate effect on the rest of society??

Answer: Objectivism holds that the basis of all law should be individual rights to life, liberty, and property. These rights are commonly called "negative rights" because they pertain only to what others are obliged not to do. Most essentially, we have the right to live free from the initiation of physical force (and its corollaries) against us.
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In this conception of law, which applies beyond Objectivism to many forms of classical liberalism and libertarianism, no crime can exist where there is not both perpetrator and victim. If the actor has not initiated force against another person or another person's property, there is no basis for regarding what the actor has done as a breach of law.? Any crime must boil down to the violation of someone's rights.
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A "victimless crime" is therefore a contradiction in terms. When people act to harm themselves, it is certainly immoral, but it should not be illegal. To live and to flourish, people need the freedom to take actions and accept the consequences. Others are rarely in a position to know better than the actor whether an action would be beneficial or not in the full context of the actor's life, and the actor is, after all, the one who will have to live with the consequences of his actions (assuming he violates no one's rights).
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Of course, actions within one's rights have social effects. We live in a complex society based on the division of labor and voluntary alliances, so practically everything we do involves other people in one way or another. But as long as rights are respected, each person is connected in a chain of links?that recognizes:
—that others have a moral right to exist for their own sake.
—that others are independent human beings just like oneself.
—that others are of benefit because they choose to be of benefit.
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If a lover breaks your heart, still you recognize that there could have been no love without the freedom to choose another. If an important client takes business away from you, still you recognize that you cannot have business if clients cannot choose their suppliers. Thus the social effects of a person's actions are not in themselves sufficient grounds to determine whether the acts are or should be criminal.
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To place the power of the gun between a person's mind and his actions is to ban rational thought. And to ban rational thought is, in the long term, to undermine and destroy human life itself. Paternalist governments, which violate people's rights by instituting bans on victimless acts, impede the process of human thought and choice that allows individuals and civilizations to flourish.
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Let's consider two cases of victimless crimes (as regarded in most legal systems today): drugs and price fixing.
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Drugs: It is harmful to one's reason and physical health to abuse recreational narcotics like heroin or cocaine. For this reason, it is immoral to abuse these drugs. Nevertheless, these drugs, like most substances, have appropriate uses in some cases. Who is to be the judge of whether you should use heroin, for example, to treat severe pain? Opiates are highly effective (I say this with no real knowledge of the practical uses of heroin as such, if any). You would be wise to consult a medical doctor, who can instruct you as to the physical benefits and harms, and you would be wise to consult counselors to help you understand the psychological and moral dangers, but in the end you must decide what would be best for you.
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Price fixing: Suppose a group of independent businesses (hotels in Paris, let's say) share information about their customers, prices, occupancy rates, etc. They agree on a pricing regime and sign a contract to coordinate their prices. Now this would be a violation of anti-trust laws, but there is no victim in the case. The rise in prices would hurt the hotels' customers, it might be said. But wait a second: The customers choose whether to stay in the hotel or not, and the hoteliers have made the effort and provided the capital that make the hotels possible through their own free choice. No one is actually forced to stay in a hotel in Paris. And no one is forced to provide a hotel in Paris. The hoteliers have every right, morally and politically, to use their property as they see fit. Now, creating a cartel like this usually just invites others to break into the market at lower prices, but that's not the basic point. The basic point is that because there is no victim in the case, in justice there should be no crime.
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Objectivism does not equate the moral and the political. The moral basis of a just political system is individual rights. This means that one has the political right to do wrong, the right to do what one should not. And thus, more crucially, one has the right to do whatever is right, to the best of one's ability, by one's own judgment, for one's own sake and for the sake of those people and things one loves.

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