Falco was Assistant Secretary of State for International Narcotics Matters during the Carter Administration. She is now president of Drug Strategies, a national drug policy center. This is the edited transcript of an interview conducted in 2000.

It's very hard not to change your vision if you stay in the field long enough.

If you look over the sweep of time, what changed for me from 1980 until about 1990, and continuing today, is that the price of drugs has just plummeted in this country. Worldwide production of opium has more than tripled, and cocaine has geometrically expanded. Both the quality, the purity of the drug, is much higher, and is so much more dangerous now to people who use it in this country. And it's so cheap that even a high school kid could buy a hit of heroin for his weekend enjoyment.

So that's got to be a failure. The measure of success for a supply control strategy has always been whether what we're doing overseas or on the high seas actually increases the price on the streets of this country and reduces the purity. By both of those measures, this program has failed miserably.

It's also a flawed strategy. Many people argue that it just hasn't been implemented enough, that, "If you just put ten times as much money into it, it would change everything." But, in fact, it's a flawed strategy at its very core. First, because drugs can be produced almost anywhere. We've proved that in the United States with marijuana. As pressures grow up in one area against production, it just moves down the street, so to speak.

Isn't the fact that we're spending more money on treatment a form of progress?

It's true that more is being spent on treatment. But there was always such a small amount being spent on treatment--it's very easy to claim an expansion of treatment money. America's drug problem can only be resolved by attacking demand right here at home, and not be looking to other countries to solve our problem. If, in fact, we're going to reduce demand in this country, we need to change our priorities--fundamentally--and make treatment and prevention the number one priority; not only in theory, but also in terms of how much money is spent. Right now in the federal drug budget, treatment gets less than 15 percent of the entire amount. And if you look at the state level, states are putting even less of their own drug budgets into treatment and prevention. So law enforcement overseas interdiction consumes more than the lion's share.

Today, fewer than a third of the nation's addicts can get treatment unless they can afford to pay for it, and most addicts can't pay for it. The result is that many of the people who have this chronic addiction problem are cycled in and out of the criminal justice system because, ironically, in many places, that's the only way you can get treatment.

There's always been this debate about whether we're having a drug epidemic or not. It's always cast as "Are we winning? Are we losing?" In fact, we have a very large drug problem in this country, probably one of the largest in the world. A lot of it seems to be intractable, because we continue to do the wrong things. We don't provide intensive sustained treatment for people who need it. We don't have effective prevention programs in most schools. So we have a huge number of Americans whose lives are, in fact, completely destroyed by these problems, and who also incur huge costs for everybody in this society. It's not just about lost human lives. It's also about economics. The drug problem in this country costs us hundreds of billions of dollars a year.

Americans aren't rational about the drug problem, and we never have been. We continue to attach enormous stigma to people who get involved with drugs. And we tend to think of this as a moral issue, so it generates a huge amount of blame and denial, in the sense that we don't want people to know if our family has drug problems. And we certainly might not want to know about it ourselves.

To stand up and advocate treatment as the major approach takes a whole new vision of how to address the drug problem--to think about it in medical terms, in public health terms--instead of as primarily a criminal problem. And that's the kind of conceptual leap that we haven't made yet in this country. That vision of the drug problem has governed our policy for more than 100 years. It might take us another 100 years to get out the other side.

Is treatment cost-effective?

Treatment is vastly more cost-effective than incarceration and enforcement. Studies have been done repeatedly over the last ten years, and it's been demonstrated very clearly that if an addict is retained in treatment for a year or longer the success rate is very good--very good. Other studies show, for example, that one dollar invested in treatment saves seven dollars in social costs, primarily by reducing prison costs. That study was done in California, which has one of the largest prison populations in the country.

In America we still define our drug problem as primarily criminal in nature. We have not yet made the leap into understanding that addiction really is a chronic relapsing disease, and that there are a lot of things we can do, both to prevent the disease from happening, and to treat it once it happens. So, as long as we think about the drug problem in terms of being tough on drugs, thinking of it as a crime, or being soft on drugs and dangerously liberal or touchy-feely, we are going to continue to allocate our money in these really skewed ways that don't make sense in terms of what the research has shown us. In some sense, supporting law enforcement in this field is a litmus test for legitimacy of concern about the drug problem.

Why are current law enforcement officials in Washington reluctant to make a public statement in favor of treatment and education?

There is a pervasive fear in Washington that you will immediately be labeled as soft on drugs if you stand up and say, "We really need to change priorities. We need to focus on treatment and prevention." And if you're a federal official, you're afraid that somehow that will affect your job. You might not get promoted as fast. If you're an elected official, they really believe, I think, that the voters will throw them out. But the interesting irony is that many national surveys, including several conducted recently by Peter Hart Research Associates, have found that the American people strongly support increased spending for prevention and treatment. So there's this huge disconnect between what's felt in the communities and what's going on in Washington.

Is racism a factor in the war on drugs?

If you look at the numbers and racial composition of people who end up in prison because of the mandatory minimum drug laws, it's hard not to conclude that there is a distinct racial bias here. The vast majority of people behind bars in this country for major drug offenses are African American or Hispanic. It's hard to say whether the laws were originally intended to achieve that result. But the reality is that we are locking up millions of people who come from these very specific groups.

How effectively is the United States' drug war waged overseas?

I do think it's part of that larger delusion that Americans still have, about being able to solve the drug problem by going to other countries. From my perspective, the most dangerous part about it is that it continues to have Americans thinking that if we could just get the Colombians to do the right thing, things would be better in this country. We really need to understand that the answers are right here at home. The answers are not in very sophisticated Blackhawk helicopters flying over remote parts of a country--that is really something for a civil war.

What lessons can we learn from our involvement with Panama and Colombia?

The invasion of Panama was really justified in terms of taking Noriega, who was then defined as the major drug trafficker in the region and had to go. In reality, the US had a wide range of other interests in Panama. And it was very convenient to say that we were doing this on behalf of the drug war. In fact, within six months of Noriega's extraction, drug trafficking from Panama more than doubled. So there was never any doubt that that activity really was meant to do anything about the drug war.

In terms of Colombia, if we look at the nature of the assistance package, we understand right away that it cannot have a lasting kind of impact on the drug traffic. Eighty-five percent of the assistance package is for very sophisticated helicopters and a little bit of military assistance, and tiny amounts of economic development and judicial reform.

If we really wanted to do something about the drug problem in Colombia, we would provide assistance to strengthen the central government and the institutions of civil society--the judiciary, the police, and to professionalize the police, and, even more important, to develop real economic alternatives in these regions.

Most people don't understand that these vast regions in southern Colombia really are very poor, with very little other source of income. And until you begin to provide alternative means of income to farmers, who are essentially drug farmers, they're going to continue growing their crops.

We need to focus on how you bring these groups into a much broader definition of Colombian society. There are profound economic and class divisions within the society that have never been addressed. It's part of the ongoing problem in Colombia that's been true for well over 50 years. Helicopters are not going to make any difference, either to solving the insurgency problem or to reducing the drug problem.

Is there anything wrong with having many different federal agencies involved in the drug war?

The drug budget is the one big growth item every year. Whether we're contracting or expanding federal spending, the drug budget always goes up. We're now at $20 billion a year. Agencies are very eager, of course, to get part of that, particularly since responsibility for various aspects of the drug war are spread among so many enforcement agencies. There has been a long history of interagency rivalry, and sometimes real struggles on the ground over which agency is going to get credit. If they get the credit, they then have a much stronger case to make for increased budget authority. I think it's really a chronic problem with the way we think about the drug war. Since we define the drug war primarily in enforcement terms, something like 20 law enforcement agencies have some part to play in this. This problem will continue, because it is a growth industry. It's something that gives them a mission.