I don't think the timeline of that narrative makes sense. There were two major sets of milestones in the drug war: most drugs were heavily regulated or made illegal in the 1920's and 1930's. And modern drug law and the drug war was put into place in the 1970's. But crime started going up in 1960, decades after drugs were made illegal and a decade before the drug war. So how does "drugs" explain the rise in crime rates at that time?
Much has been written on the subject, but I don't think the drug war is a cause so much as it is a symptom of what happened. There was so much else happening that better fits the timeline. Steve Pinker, for example, blames rock & roll and young people: http://quod.lib.umich.edu/h/humfig/11217607.0002.206/--deciv....
The timeline is a well-understood series of events that developed pockets of economic depression, lack of education and above-average crime rates. Take Baltimore for example. Okay, it's probably far too extreme to be an average case, but it's the one I know the best.
After WWII, white southerners moved north in search of jobs, and were not happy to find a sizeable population of black people who were not normalized to the invisible and constant discrimination against black people in the south.
In the 1950s, desegregation and school integration was the final straw in a long discomfort with the growing black population in urban Baltimore, and white people began moving to the suburbs, speeding up their flight even more through the 1960s.
At the same time, heroin use in the city rose dramatically through the 1960s. A new class of violent drug dealers began to control the sale of drugs in the city. Burglaries rose tenfold and robberies rose thirtyfold from 1950 to 1970.
By 1968, the city was seriously deteriorating, with increase in crime and drug abuse, increased racial tension, and a total lack of support for the education or employment of the city's increasingly disadvantaged black citizens. When it was announced that MLK was assassinated, riots enveloped the city. Politicians blamed the people and not the conditions, white voters agreed, and a white exodus to the suburbs ensued. Over a period of 40 years the population in the city decreased by 200,000.
Drug use increased, jobs decreased, and the local economy basically tanked. Throughout this time, prison gangs were beginning to spring up and infiltrate vulnerable populations such as these. Kids grew up in predominately black, poor neighborhoods with high unemployment and high crime, and were stymied by a lack of easy access to a good education.
---
The drug war's primary negative effect on the population isn't that they're putting people in jail for drugs. It's that it effectively increased the price of drugs. This not only made competition more fierce, it developed a new class of criminal, and made it that much more necessary for addicts to commit crime in order to score drugs. Drug dealing was then able to supplant other low-income work (where it was available) as a more reliable source of income. Increased violence is a subsequent side-effect of all this, and thus the increase in incarceration.
---
To understand how deeply drugs (and the war on them) intersects with violent crime, gangs, impoverished black communities and the prison system, I highly recommend reading The Corner: A Year in the Life of an Inner-City Neighborhood. It was written in 1997 but I can tell you it is still completely relevant today. The Wire (especially season 3) is basically a meditation on how the drug war has completely destroyed black communities like those in Baltimore, and how it perpetuates the cycle of an eventual life in and out of prison for many (if not most) of the city's black males.
You want to talk violent crime? There's fewer places in this country more violent than Baltimore. You can't talk about the prison system or violent crime in Baltimore without talking about the drug trade. As recently as 2013, over half of the 650 officers of the Baltimore City Detention Center were found to be smuggling contraband for the Black Guerrilla Family, a prison gang founded in 1966 in California. Reports from gang members show that even by 1996, they had essentially total control over the facility. They, along with the Crips, used the illegal drug trade in order to achieve power and influence enough to control officers working at the facility.
Finally, there's the more recent evidence that really puts things into perspective. In 2013, the city's chief of police noted how for "everyday people", crime had dropped, even though the murder rate was at an all-time high. What did he mean by that? Approximately 80 to 85 percent of the victims of violent crime were african-american males involved in the drug trade.
And homicide rates have skyrocketed every month since the most recent riots in Baltimore. The reason? So many pharmacies got robbed during the riots that it flooded the market with prescription drugs at prices up to ten times lower than they used to be, and rival gangs are fighting a war to dominate this new market while there's still excess supply.
Without (hopefully) detracting from your excellent points, a couple of points on tv series: 1) The Corner is also worked into a tv mini series[1] by the author -- and in case people are not aware - he also wrote "The Wire" -- which is a more dramatic treatment of the same material.
Your point about WWI and WWII are interesting -- I'd come to a similar realization, partly jolted by the (entirely fictional, as far as I know -- more so than The Corner, and probably The Wire too) tv series "The Peaky Blinders"[2].
It does seem entirely reasonable that combining unemployment with a number of young men with great skills at war, coupled with severe PTSD and no treatment or well-fare to speak of is likely to lead to violent gangs forming. I can't imagine the situation is helped by ready access to firearms.
Much has been written on the subject, but I don't think the drug war is a cause so much as it is a symptom of what happened. There was so much else happening that better fits the timeline. Steve Pinker, for example, blames rock & roll and young people: http://quod.lib.umich.edu/h/humfig/11217607.0002.206/--deciv....