Cato Policy Analysis No. 157 July 17, 1991

Policy Analysis

Alcohol Prohibition Was A Failure

by Mark Thornton

Mark Thornton is the O. P. Alford III Assistant Professor of Economics at Auburn University.


Executive Summary

National prohibition of alcohol (1920-33)--the "noble experiment"--was undertaken to reduce crime and corruption, solve social problems, reduce the tax burden created by prisons and poorhouses, and improve health and hygiene in America. The results of that experiment clearly indicate that it was a miserable failure on all counts. The evidence affirms sound economic theory, which predicts that prohibition of mutually beneficial exchanges is doomed to failure

The lessons of Prohibition remain important today. They apply not only to the debate over the war on drugs but also to the mounting efforts to drastically reduce access to alcohol and tobacco and to such issues as censorship and bans on insider trading, abortion, and gambling.[1]

Although consumption of alcohol fell at the beginning of Prohibition, it subsequently increased. Alcohol became more dangerous to consume; crime increased and became "organized"; the court and prison systems were stretched to the breaking point; and corruption of public officials was rampant. No measurable gains were made in productivity or reduced absenteeism. Prohibition removed a significant source of tax revenue and greatly increased government spending. It led many drinkers to switch to opium, marijuana, patent medicines, cocaine, and other dangerous substances that they would have been unlikely to encounter in the absence of Prohibition. Those results are documented from a variety of sources, most of which, ironically, are the work of supporters of Prohibition--most economists and social scientists supported it. Their findings make the case against Prohibition that much stronger.[2]

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