Just how free is the Land of the Free? In his 1977 book, America: why I love her, the actor John Wayne appeared to tell it straight: "We are indivisible and ever since 1776 all the world is aware of our hunger for individual liberty and our thirst for justice." While Wayne's sentiments are echoed by many Americans today, Eric Schlosser has his doubts. In Reefer Madness, he investigates America's vast underground economy and finds a country alienated from itself by a growing fissure between public and private morality. Far from embodying the ideals of its founders, contemporary America, suggests Schlosser, is "a personality beginning to decompose".
The invisible economy is defined here as undocumented, illegal money-making. He cites various estimates of this economy's size, suggesting that it could be worth at least $650bn per year. The enormous expansion of black-market activity since 1970 has been fuelled, he says, by economic hardship, desire for profit and, crucially, increasing disrespect for authority and the law.
Schlosser focuses on three unrelated aspects of the American underground - cannabis use, migrant labour and pornography. All three are subject to the same free-market dynamics as the mainstream economy. But in each case, Schlosser identifies a failure by the state to balance competing claims for freedom. In the case of cannabis use and pornography, the problem is that the state has intervened too much; in the case of illegal Mexican immigrant workers in California, it has not intervened enough.
The book opens with the story of Mark Young, jailed for life without parole in Indiana in 1992 for brokering the sale of 700lbs of marijuana. Young's sentence was the mandatory minimum under the "three strikes and you're out" legislation introduced in the 1980s. This is contrasted with the average time served for murder in the US - 11 years, four months.
Having outlined the history of Young's case (including his eventual early release on technical grounds), Schlosser then turns angry polemicist, denouncing the 20-year war on drugs. As many as 45,000 people are currently serving time in US jails for marijuana offences, yet it remains the country's most widely used illegal drug, smoked by around two million people each day. Schlosser argues that the medical evidence favours decriminalisation and urges his fellow citizens to demand changes to the law.
The author is more comfortable attacking the free market than describing individual lives. Relating the plight of the illegal immigrants who work in California's strawberry fields, he argues that the lack of legal protection for workers has allowed market forces to drive their wages down to as little as $7,500 per year - hardly better than they would have earned in rural Mexico. This, he insists, is not real freedom. He predicts that, unless the market is regulated, shanty towns could start appearing on the edge of American cities.
Although this book is being pushed by the publishers as an expose of how often mainstream America frequents the underground, Schlosser's eye tends to be drawn towards the most extreme proponents of illicit causes. In his account of America's sex industry, for example, he describes in detail the authorities' 30-year pursuit of pornographer Reuben Sturman ("smut lord" to some, freedom campaigner to others), yet only mentions in passing the amoral executives who access pay-per-view porn in their hotel rooms.
On the last page, Schlosser suggests that 11 September might change America's tough stance on marijuana and other areas of the black economy. The war on terrorism, he says, may force the country to consider which values are most worth defending. But his optimism is open to question. While the country remains focused on the aftermath of Operation Iraqi Freedom, dragging attention back to the state of freedom at home - Schlosser's intention, here - may prove tricky.
Tristan Quinn is the culture producer of BBC2's Newsnight