Q: In Europe are they taxing drugs like marijuana or heroin the way we tax alcohol?

A: No. The closest is The Netherlands, where the government has found innovative ways to insure that the people involved in selling cannabis in the coffee shops do pay some taxes. I should point out, however, that Switzerland did some very interesting studies of their heroin prescription projects, which is where drug addicts can come to a clinic and get heroin either for free or for like 10 francs per day. They found that even though these projects were fairly expensive to run, in part because there were so many regulations and codes and because they provided other services, there was a net savings to the government and the taxpayer because of the reduction in public health and criminal justice costs. So from a purely cost-benefit perspective, even a heroin-maintenance project proved to be a cost savings.

Q: Obviously, there are many people who disagree with you 180 degrees. What's the weakest part of your argument for legalization of drugs?

A: There is a range of areas where there is an empirical body of evidence. There is evidence about the relative harms of marijuana. There is evidence about the consequences of decriminalization. There is evidence about heroin maintenance. There is evidence about providing clean needles. There is evidence on this stuff where people can disagree, but the evidence is there. So disagreeing ceases to be about the substance, it's about something else.

The area where the evidence is not conclusive and where people can legitimately disagree, is what would be the consequences if you actually made not just marijuana but a whole range of other drugs more legally available? That is what I would call the "$64,000 Question" in the drug legalization debate. I believe -- as do millions of others, and not just libertarians -- that even if the drugs that are now illegal were to be made legal -- whether like alcohol or in some more restrictive way -- the increase in drug use would minimal, whereas the savings and the benefits in terms of the reduction of crime, violence, corruption and other things would be dramatic. But there are those people who believe that if we made these drugs legal you would see drug abuse increase tenfold. I'm convinced they are wrong, but I cannot prove they are wrong.

Q: How is President Obama's drug policy different from President Bush's?

A: In quite significant ways. First of all, he made a set of commitments when he was running for office and he appears more or less to be making good on them. He said that he was going to push for the repeal of the crack powder mandatory drug sentencing laws. The day after his inauguration it was up on his Web site and last week a high-level Justice department official said that was our official position. So they are moving in that direction.

He said that he was now going to support federal funding for needle exchange. The day after the inauguration that was up on the Web site but I have to say he went back on his word yesterday (May 7), when he introduced the federal budget and that ban was still in there. I think it's a little like the issue about gays in the military. He's made clear that he's going to do the right thing eventually, but he feels that he is not quite ready to do it yet politically.

Thirdly, he said he was going to remove the federal government from going after medical marijuana in those states that had made it legal. He appears to be moving in that direction as well. There are still some exceptions that are unsettling, but by and large Attorney General Holder said last month that that's the official policy of the government.

And he's talked about two broader themes, one of which is treating the drug issue more as a health issue than a criminal justice issue - changing the paradigm. And he's talked about no longer subordinating science to politics, which is of dramatic significance in the drug-policy area, where science has always been subordinated to politics.

And unlike Bush, who never admitted to his marijuana and cocaine use and had to be exposed by quote-unquote "old friends," Obama came right out early on saying he had smoked marijuana and even used cocaine. And when he was asked if he inhaled, his response was, "Sure. Wasn't that the point?" And, "Yeah, many times." So it's a different attitude and a level of frankness.

Q: Do you think Obama will be able to de-escalate America's long, bipartisan war on drugs in any significant way?

A: Yes, I think so, for a few reasons. The first thing is that the nature of the dialogue is changing. It's been true already for many years that 70-plus percent of Americans say that the war on drugs has failed. But there has been a lack of political leadership to reflect that public opinion. I think what is happening now is that the state budget deficits are really focusing people' minds.

I think that this may well be the first year in 40 years in which we see a reduction in the total number of people incarcerated in this country - mostly because of the budget issue. I think that we're also seeing a redefinition of quote-unquote "the problem" as we increasingly define the quote-unquote "problem" as the problem of over-incarceration or mass-incarceration in America. That's relatively new.

I think we are seeing interesting champions emerge. It's not just Schwarzenegger making the comment about marijuana. It's Senator Webb of Virginia saying that we need a national debate and that the over-incarceration is a disgrace and proposing a bill for an independent commission. It's surprising voices like the Attorney General of Arizona saying, "I don't support legalizing marijuana, but it's time for a debate." It's the El Paso city council. It's members of Congress who never before spoke out.

What we are seeing is that sort of fear, that self-censorship that has been so pervasive in drug policy for so many years, is beginning to fade. That's crucially important. I think at the state and the federal level we're going to see these harsh mandatory-minimum sentences being rolled back. I think we're going to see a much more pragmatic policy in terms of dealing with addiction and HIV and hepatitis C, which are the most deadly aspects of drugs.

The area where I am a little more pessimistic is whether or not the Obama administration we'll be open to a real debate about what to do about places like Mexico, Colombia and Afghanistan, because we really do need to have that debate as well.