Prohibition

A recently finished reading Prohibition: A Concise History by W.J. Rorabaugh.  The history is interesting throughout and concise indeed at only 133 pages.  Some interesting excerpts include:

Whenever a substance is banned two things happen.  First, the price goes up, and second, the product returns in more concentrated form, or a replacement appears.  The high risk of handling an item that has low value leads to potent substitutes that can be readily made, shipped and stored.  Thus, the ban on opium under the Harrison At (1914), yielded heroin, the war against cocaine in the 1970s produced crack, and the prohibition of alcohol caused a shift from beer to hard liquor, and the substitution of opiates.

When the government outlawed alcohol in the U.S. and within a 3 miles (and then 12 miles) of the U.S. coast, ship were anchored outside of this prohibited area and speed boats to take the alcohol from the anchored ships to the mainland and avoid the U.S. Coast Guard.

The most famous rum-runner was Bill McCoy, who refused to cut liquor, honored business arrangements, and never cheated.  His quality goods were labeled the Real McCoy, a brand of high reputation and premium price.

Sound a bit like medical marijuana in California prior to de-criminalization?

One way to get legal alcohol was to have a physician write a prescription for whiskey or beer, which many states allowed.  These prescriptions turned drug stores into liquor stores…stores preferred to sell more profitable moonshine rather than the heavily taxed alcohol available from authorized dealers.

The beginning of the end of prohibition may have been the Wickersham Commission, which found overwhelming evidence that:

…probhibition was not being enforced and realistically could not be enforced short of creating a national police state. Few Americans liked that idea.

Further, prohibiting alcohol eliminating a gravy train of revenue for the government.

Then there was the matter of the lost taxes, not just Capone’s untaxed millions but the amounts that could be raised from alcohol taxes and license fees.

The book concludes saying:

Where the substance [alcohol] has not been part of local culture, prohibition has sometimes been effective, as has been true in some Islamic areas.  On the other hand, people in hard-drinking cultures have usually resisted any ban so strongly that it had to be repealed…Always eager for revenue, governments also tended to stop other restrictive anti-liquor policies over time.  Sweden gave up the Gothenburg system’s strict allotments of alcohol to individual drinkers, although it continues to use government outlets to sell hard liquor.  Since the 1990s, Britain has lengthened hours of service in public houses, and youth binge drinking has soared.  There are always trade-offs between harms to individuals or to society versus benefits in the form of government revenues and the popularity of easy access to alcohol.

Certainly worth a read, especially given the brevity of the book.

 

 

from Dental Tips https://www.healthcare-economist.com/2018/09/05/prohibition/

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