A Swamp of Unintended Consequences
Prohibition created a lot of crime
I actually know people who remembered Prohibition. My father was seven when the Volstead Act passed. He was 20 before it was legal to sell a young man a drink in this country. Although we never had any conversations about what age he was, I’m pretty sure he was drinking while Prohibition was still the law.
My mother’s mother supported Prohibition. Her husband, my grandfather, liked an occasional beer but he wasn’t opposed to making the sale of it illegal because their German neighbors homebrewed it. He knew he could easily get that rare beer with a simple horse ride down the road. Their area of North Dakota remained a dry county until World War 2. My mother and her friends would drive 40 miles to South Dakota so they could drink while in high school.
To say Prohibtion was a disastrous failure is putting it mildly.
A Problem in Need of Addressing
America's alcohol consumption prior to Prohibition was unusually high compared to other countries and later American eras and certainly current levels. Estimates suggest the average American over 15 years of age consumed nearly seven gallons of beverage alcohol per year. Today, the average American consumes about 2.3 gallons.
Why the difference?
Well, notice I selected Americans over 15 as my comparison group. Far more young people drank alcohol pre-Prohibition. Many states didn’t have minimum drinking age restrictions and even in states that had some restrictions, the laws often aren’t enforced. The vast majority of states had no restrictions on alcohol purchases.
Understand, in that era, you were an adult when you began earning a paycheck and could afford to move out of your parents’ house. It was a much more liberty-based era than our own.
Alcohol was the beverage of choice if there was a lack of readily available safe drinking water. The lack of education about the harmful effects of alcohol might have had something to do with higher consumption levels too.
There were reports of small children passed out on street corners. I don’t know how much truth there is to those reports, but if true, you can understand why some people had legitimate concerns about Americans’ alcohol usage.
Remember the racism and xenophobia I alluded to in the previous article? You can’t really understand why Prohibition was such a popular idea at its outset without understanding the influence of eugenics in early 20th century American society.
President Theodore Roosevelt was a great proponent of eugenics (which was a legitimate, if wrong-headed, science at the time) and he also campaigned vigorously for public health. Eugenists had discovered that infants born to drinking parents could have some anomolies. We’d call it Fetal Alcohol Syndrome today. There are a myriad of health implications tied to alcohol consumption and well-intentioned people were led to believe that if you eliminated alcohol from society, everybody would be healthier.
That was the propaganda, at least. Meanwhile, racists and xenophobes saw it as a way to prevent black people from gathering in saloons and jute joints in the evening and they hoped it would make America a less attractive place to southern and eastern European immigrants who seemed to drink far more than the average American. Whether there was a consumption divergence or not might be an interesting topic of research.
The problem was, of course, is that prohibition tends to have the opposite effect of what is intended. While restrictions on the manufacture and sale of beverage alcohol initially led to a drop in consumption, it ultimately proved difficult to enforce and may have even led to a subsequent increase in drinking.
History Sent a Warning
When the Prohibition began on January 19, 1920, a few sage observers predicted it wouldn’t work out. Previous attempts to outlaw the use of alcohol in America had fared poorly.
When a Massachusetts town banned the sale of alcohol in 1844, an enterprising tavern owner took to charging patrons for the price of seeing a striped pig. The accompanying drinks were included in the price of admission.
When Maine passed a strict prohibition law in 1851, people didn’t stop drinking, but the city’s working class and Irish immigrants grew restive because they didn’t have the means to afford the black market hooch. A deadly riot in Portland in 1855 led to the law's repeal.
So, the federal government had ample warning that implementing Prohibition on a national scale might not go as intended.
Economics of Prohibition
Prohibition's supporters were initially surprised by what didn’t happen during the dry era. When the law went into effect, they expected sales of clothing and household goods to skyrocket. Real estate developers and landlords expected rents to rise as saloons closed as neighborhoods improved. Chewing gum, grape juice, and soft drink companies all expected growth. Theater producers expected new crowds as Americans looked for alternative ways to entertain themselves without alcohol.
It didn’t happen!
Instead, the unintended consequences proved to be a decline in amusement and entertainment industries across the board. Restaurants failed because it was hard to make a profit without legal liquor sales. Theater revenues declined. Dancehalls shuttered their doors. Few of the other predicted economic benefits came to pass even as the Roaring 20s got underway.
Instead, the initial economic effects of Prohibition proved largely negative. Breweries, distilleries and saloons closures led to the elimination of thousands of jobs, with downline impacts as barrel makers, truckers, waiters, and other related trades also lost their jobs.
One of the most profound effects of Prohibition was on government tax revenues. Before Prohibition, many states relied heavily on excise taxes in liquor sales to fund their budgets. In New York, almost 75% of the state's revenue was derived from liquor taxes. Under Prohibition, that revenue was immediately lost.
At the national level, Prohibition cost the federal government a total of $11 billion in lost tax revenue, while costing over $300 million to enforce.
The most lasting consequence was that many states and the federal government would come to rely on income tax revenue to fund their budgets going forward. Even after Prohibition ended, they continued to rely heavily on income tax revenue, while also taxing alcohol.
Uneven Enforcement
While the 18th Amendment prohibited the manufacture, sale and transportation of intoxicating beverages, it didn’t outlaw the possession or consumption of alcohol in the United States. The Volstead Act, the federal law providing for enforcement of Prohibition, left enough loopholes to open the door to myriad schemes to evade law.
Pharmacists were allowed to dispense whiskey by prescription for any number of ailments, ranging from anxiety to influenza. (Alcoholics who can’t get their booze grow anxious, so then they could buy their booze as medicine). Bootleggers quickly discovered running a pharmacy was a perfect front for their trade. The number of registered pharmacists in New York State tripled during the Prohibition era.
The Canadians made a LOT of money (um) importing whiskey into the United States. The Kennedy family got wealthy as alcohol smugglers.
Because Americans were also allowed to obtain wine for religious purposes, enrollments rose at churches and synagogues, and cities saw a large increase in the number of self-professed rabbis who could obtain wine for their congregations.
The law was unclear when it came to Americans making wine at home. America’s devastated grape industry began selling kits of juice concentrate with warnings not to leave them sitting too long or else they could ferment and turn into wine. I’ve experimented with that and it doesn’t make good wine, but I suppose if I were addicted to wine, it might not matter.
Home stills were technically illegal, but Americans found they could purchase the components at many hardware stores, while public libraries provided pamphlets issued by the US Department of Agriculature with instructions for distillation.
The law meant to stop Americans from drinking instead turned many of them into experts on how to make it, and make it even sronger than they would have been consuming it prior to Prohibition.
The black market for alcohol had serious consequences for public health. As the trade in illegal alcohol became more lucrative, the quality of alcohol on the black market declined. On average, 1000 Americans died every year during Prohibition from the effects of drinking tainted liquor.
At least 100,000 Americans died when the US Treasury agents poisoned alcohol batches in an attempt to frighten consumers.
Greatest Consequence
Law enforcement also experienced negative impacts from Prohibition. Vast sums of money exchanged during the dry era proved a corrupting influence in both the federal Bureau of Prohibition and the state and local police. Police officers and Prohibition agents alike were frequently tempted by bribes. Some even went into bootlegging themselves. While many stayed honest, enough succumbed to the temptation that the stereotype of the corrupt Prohibition agent or local cop undermined public trust in law enforcement for the duration of the era and well into the next.
Gang were mainly a small-time local affair before Prohibition, but smuggling and illegal manufacture greatly enriched mobsters during the 13-year dry spell.
The growth of the illegal liquor trade under Prohibition made criminals of millions of otherwise law-abiding Americans. As the decade progressed, court rooms and jails overflowed to where the legal system couldn’t keep up. Trials were stacked up a year or more. As the backlog of cases increased, the judicial system turned to the "plea bargain" to clear hundreds of cases at a time. This was the first widespread use of this questionable practice in American jurisprudence.
The greatest unintended consequence of Prohibition was perhaps the plainest to see. For over a decade, the law meant to foster temperance instead fostered intemperance and excess. The solution the United States devised to address the problem of alcohol abuse made the problem even worse.
Statistics from the period are notoriously unreliable, but it became very clear that more Americans were drinking, and they were drinking more than ever.
There’s no doubt Prohibition failed to achieve what it set out to do. Its many unintended consequences reached farther than its few benefits. We learned a lesson at a painful cost. Beware of solutions that end worse than the problems they set out to solve, and remember the Constitution is no place for social engineering experiments, well-intended or otherwise.