No doubt there would be some damage from libertarian drug policies, but it would look a lot more like alcohol does, which IMHO would be less damaging to society and people than prohibition and heavy handed legal punishments is. People do need help with alochol issues sometimes, and it does sometimes destroy lives/families, but we don't make it orders of magnitude worse by treating them like criminals. (although we did try it in the US a hundred years ago and it didn't go well like we thought it would).
I think there is strong empirical evidence that drug liberalization sounds good but has failed where tried. If an American city can turn it around (as SF had a great chance to do) I'll change teams and stop talking about the issue.
Now imagine the inverse. We find somewhere a thriving city with "draconian" drug policies. Would you reconsider your position?
^ That's bait, we all know Singapore exists…
But when you see the effect of these libertarian policies in American cities the results speak for themselves. Harm reduction and lax enforcement have really destroyed some communities, and this was simply not as large a problem in the 50s or 60s.
There's really no better poster child for this phenomenon than San Francisco. It was the economic center of the technology boom and unlike New York or London of centuries past, completely failed to become a "center of the world" city despite having the “center of the world” economy. By most accounts, it actually functions less well than it did before the internet was invented.