The Iron Law of Prohibition
According to its proponents, all the proposed benefits of
Prohibition depended on, or were a function of, reducing the
quantity of alcohol consumed. At first glance, the evidence seems
to suggest that the quantity consumed did indeed decrease. That
would be no surprise to an economist: making a product more
difficult to supply will increase its price, and the quantity
consumed will be less than it would have been otherwise.
Evidence of decreased consumption is provided by two important
American economists, Irving Fisher and Clark Warburton.3
It should be noted that annual per capita consumption and the
percentage of annual per capita income spent on alcohol had been
steadily falling before Prohibition and that annual spending on
alcohol during Prohibition was greater than it had been before
The decrease in quantity consumed needs at least four
qualifications — qualifications that undermine any value that
a prohibitionist might claim for reduced consumption. First, the
decrease was not very significant. Warburton found that the
quantity of alcohol purchased may have fallen 20 percent between
the prewar years 1911-14 and 1927-30. Prohibition fell far short of
eliminating the consumption of alcohol.5
Second, consumption of alcohol actually rose steadily after an
initial drop. Annual per capita consumption had been declining
since 1910, reached an all-time low during the depression of 1921,
and then began to increase in 1922. Consumption would probably have
surpassed pre-Prohibition levels even if Prohibition had not been
repealed in 1933.6 Illicit production and distribution
continued to expand throughout Prohibition despite ever-increasing
resources devoted to enforcement.7 That pattern of
consumption, shown in Figure 1, is to be expected after an entire
industry is banned: new entrepreneurs in the underground economy
improve techniques and expand output, while consumers begin to
realize the folly of the ban.
Third, the resources devoted to enforcement of Prohibition
increased along with consumption. Heightened enforcement did not
curtail consumption. The annual budget of the Bureau of Prohibition
went from $4.4 million to $13.4 milion during the 1920s, while
Coast Guard spending on Prohibition averaged over $13 million per
year.8 To those amounts should be added the expenditures
of state and local governments.
Per Capita Consumption of Alcoholic Beverages (Gallons of Pure
Warburton, The Economic Results of Prohibition (New York:
Columbia University Press, 1932), pp. 23-26, 72.
The fourth qualification may actually be the most important: a
decrease in the quantity of alcohol consumed did not make
Prohibition a success. Even if we agree that society would be
better off if less alcohol were consumed, it does not follow that
lessening consumption through Prohibition made society better off.
We must consider the overall social consequences of Prohibition,
not just reduced alcohol consumption. Prohibition had pervasive
(and perverse) ef fects on every aspect of alcohol production,
distribution, and consumption. Changing the rules from those of the
free market to those of Prohibition broke the link that
prohibitionists had assumed between consumption and social evil.
The rule changes also caused unintended consequences to enter the
The most notable of those consequences has been labeled the
“Iron Law of Prohibition” by Richard Cowan.9 That law
states that the more intense the law enforcement, the more potent
the prohibited substance becomes. When drugs or alcoholic beverages
are prohibited, they will become more potent, will have greater
variability in potency, will be adulterated with unknown or
dangerous substances, and will not be produced and consumed under
normal market constraints. 10 The Iron Law undermines
the prohibitionist case and reduces or outweighs the benefits
ascribed to a decrease in consumption.
Statistics indicate that for a long time Americans spent a
falling share of income on alcoholic beverages. They also purchased
higher quality brands and weaker types of alcoholic beverages.
Before Prohibition, Americans spent roughly equal amounts on beer
and spirits.11 However, during Prohibition virtually all
production, and therefore consumption, was of distilled spirits and
fortified wines. Beer became relatively more expensive because of
its bulk, and it might have disappeared altogether except for
homemade beer and near beer, which could be converted into real
Figure 2 shows that the underground economy swiftly moved from
the production of beer to the production of the more potent form of
alcohol, spirits.13 Prohibition made it more difficult
to supply weaker, bulkier products, such as beer, than stronger,
compact products, such as whiskey, because the largest cost of
selling an illegal product is avoiding detection.14
Therefore, while all alcohol prices rose, the price of whiskey rose
more slowly than that of beer.
Fisher used retail alcohol prices to demonstrate that
Prohibition was working by raising the price and decreasing the
quantity produced. However, his price quotations also revealed that
the Iron Law of Prohibition was at work. The price of beer
increased by more than 700 percent, and that of brandies increased
by 433 percent, but spirit prices in creased by only 270 percent,
which led to an absolute in crease in the consumption of spirits
over pre-Prohibition levels.15
A number of observers of Prohibition noted that the potency of
alcoholic products rose. Not only did producers and consumers
switch to stronger alcoholic beverages (from beer to whiskey), but
producers supplied stronger forms of particular beverages, such as
fortified wine. The typical beer, wine, or whiskey contained a
higher percentage of alcohol by volume during Prohibition than it
did before or after. Fisher, for example, referred to “White Mule
Whiskey,” a name that clearly indicates that the product had quite
a kick. Most estimates place the potency of prohibition-era
products at 150+ percent of the potency of products produced either
before or after Prohibition.16
Total Expenditure on Distilled Spirts as a Percentage of Total
Alcohol Sales (1890-1960)
Warburton, The Economic Result of Prohibition (New York:
Columbia University Press, 1932), pp. 114-15; and Licensed Beverage
Industry, Facts about the Licensed Beverage Industry (New
York: LBI, 1961), pp. 54-55.
Even Fisher, the preeminent academic supporter of Prohibition,
recognized the danger of such products.
I am credibly informed that a very conservative
reckoning would set the poisonous effects of bootleg beverages as
compared with medicinal liquors at ten to one; that is, it requires
only a tenth as much bootleg liquor as of pre-prohibition liquor to
produce a given degree of drunkenness. The reason, of course, is
that bootleg liquor is so concentrated and almost invariably
contains other and more deadly poisons than mere ethyl
There were few if any production standards during Prohibition,
and the potency and quality of products varied greatly, making it
difficult to predict their effect. The production of moonshine
during Prohibition was undertaken by an army of amateurs and often
resulted in products that could harm or kill the consumer. Those
products were also likely to contain dangerous adulterants, a
government requirement for industrial alcohol.
According to Thomas Coffey, “the death rate from poisoned liquor
was appallingly high throughout the country. In 1925 the national
toll was 4,154 as compared to 1,064 in 1920. And the increasing
number of deaths created a public relations problem for … the
drys because they weren’t exactly accidental.”18 Will
Rogers remarked that “governments used to murder by the bullet
only. Now it’s by the quart.”
Patterns of consumption changed during Prohibition. It could be
argued that Prohibition increased the demand for alcohol among
three groups. It heightened the attractiveness of alcohol to the
young by making it a glamour product associated with excitement and
intrigue. The high prices and profits during Prohibition enticed
sellers to try to market their products to nondrinkers —
undoubtedly, with some success. Finally, many old-stock Americans
and recent immigrants were unwilling to be told that they could not
drink. According to Lee, “Men were drinking defiantly, with a sense
of high purpose, a kind of dedicated drinking that you don’t see
much of today.”19
Prohibition may actually have increased drinking and
intemperance by increasing the availability of alcohol. One New
Jersey businessman claimed that there were 10 times more places one
could get a drink during Prohibition than there had been
before.20 It is not surprising that, given their hidden
locations and small size, speakeasies outnumbered saloons. Lee
found that there were twice as many speak easies in Rochester, New
York, as saloons closed by Prohibition. That was more or less true
throughout the country.
Another setback for prohibitionists was their loss of control
over the location of drinking establishments. Until Prohibition,
prohibitionists had used local ordinances, taxes, licensing laws
and regulations, and local-option laws to prevent or discourage the
sale of alcohol in the center city, near churches and schools, on
Sundays and election days, and in their neighborhoods. Prohibition
eliminated those political tools and led to the establishment of
speak easies in business districts, middle-class neighborhoods, and
other locations that were formerly dry, or gave the ap pearance of
Prohibition also led many people to drink more “legitimate”
alcohol, such as patent medicines (which contained high
concentrations of alcohol), medicinal alcohol, and sacramental
alcohol.21 The amount of alcoholic liquors sold by
physicians and hospitals doubled between 1923 and 1931. The amount
of medicinal alcohol (95 percent pure alcohol) sold increased by
400 percent during the same time.22 Those increases
occurred despite rigorous new regulations.
Prohibitionists wanted and expected people to switch their
spending from alcohol to dairy products, modern appliances, life
insurance, savings, and education. That simply did not happen. Not
only did spending on alcohol increase, so did spending on
substitutes for alcohol. In addition to patent medicines, consumers
switched to narcotics, hashish, tobacco, and marijuana. Those
products were potentially more dangerous and addictive than
alcohol, and procuring them often brought users into contact with a
more dangerous, criminal element.23
The harmful results of the Iron Law of Prohibition more than
offset any benefits of decreasing consumption, which had been
anticipated but did not occur.
Prohibition Was Not a Healthy Move
One of the few bright spots for which the prohibitionists can
present some supporting evidence is the decline in “alcohol-related
deaths” during Prohibition. On closer examination, however, that
success is an illusion. Prohibition did not improve health and
hygiene in America as anticipated.
Cirrhosis of the liver has been found to pose a significant
health risk, particularly in women who consume more than four
drinks per day.24 However, deaths due to cirrhois and
alcoholism are a small portion of the total number of deaths each
year, and alcohol can be considered only a contributing cause of
most of those deaths.25 Many people who do not drink
develop cirrhosis, and the vast majority of heavy drinkers never
develop it.26 Dr. Snell of the Mayo Clinic in Rochester,
Minnesota, reported in 1931 that “we know now that cirrhosis occurs
in only 4 per cent of alcoholic individuals.”27 Even in
the worst pre-Prohibition year, recorded deaths due to alcoholism
and cirrhosis of the liver amounted to less than 1.5 percent of
An examination of death rates does reveal a dramatic drop in
deaths due to alcoholism and cirrhosis, but the drop occurred
during World War I, before enforcement of Prohibition.28
The death rate from alcoholism bottomed out just before the
enforcement of Prohibition and then returned to pre-World War I
levels.29 That was probably the result of increased
consumption during Prohibition and the consumption of more potent
and poisonous alcoholic beverages. The death rate from alcoholism
and cirrhosis also declined rather dramatically in Denmark,
Ireland, and Great Britain during World War I, but rates in those
countries continued to fall during the 1920s (in the absence of
prohibition) when rates in the United States were either rising or
Prohibitionists such as Irving Fisher lamented that the
drunkards must be forgotten in order to concentrate the benefits of
Prohibition on the young. Prevent the young from drinking and let
the older alcoholic generations die out. However, if that had
happened, we could expect the average age of people dying from
alcoholism and cirrhosis to have increased. But the average age of
people dying from alcoholism fell by six months between 1916 and
1923, a period of otherwise general improvement in the health of
There appear to have been no health benefits from
Prohibition.32 On the contrary, the harmlessness and
even health benefits of consumption of a moderate amount of alcohol
have been long established. As early as 1927 Clarence Darrow and
Victor Yarros could cite several studies showing that moderate
drinking does not shorten life or seriously affect health and that
in general it may be beneficial.33 According to the
eminent Harvard psychologist Hugo Månster berg, “there exists no
scientifically sound fact which demonstrates evil effects from a
temperate use of alcohol by normal adult men.”34
Studies continue to find the same results and that problems with
alcohol are associated with excess — a problem with most
goods.35 Gene Ford cites 17 recent studies that provide
evidence of the benefits to the heart and cardiovas cular system of
moderate drinking.36 The evidence appears so strong that
the American Heart Association has conceded that “modest alcohol
consumption has been associated with beneficial effects,” and that
“an increased HDL-cholesterol [the good kind] level appears to be a
dividend of moderate consumption of alcohol.”37
Not all prohibitionists were blind to the potential benefits of
alcohol. However, many were technocrats or Progressives, and if
some benefit of alcohol were admitted they would have been forced
to conclude that the government should act to encourage moderate
consumption of alcohol. One technocrat-economist, Thomas Carver,
was familiar with the “possibility” that moderate drinking could be
beneficial,38 but according to Fisher, he was “a
courageous scholar” and discarded that possibility to pursue the
undeniable benefits of Prohibition.
Prohibition Was Criminal
At the beginning of Prohibition, the Reverend Billy Sunday
stirred audiences with this optimistic prediction:
The reign of tears is over. The slums will soon be a
memory. We will turn our prisons into factories and our jails into
storehouses and corncribs. Men will walk upright now, women will
smile and children will laugh. Hell will be forever for
Sunday’s expectations of Prohibition were never realized. He and
other champions of Prohibition expected it to reduce crime and
solve a host of social problems by eliminating the Demon Rum. Early
temperance reformers claimed that alcohol was responsible for
everything from disease to broken homes. High on their list of
evils were the crime and poverty associated with intemperance. They
felt that the burden of taxes could be reduced if prisons and
poorhouses could be emptied by abstinence. That perspective was
largely based on interviews of inmates of prisons and poorhouses
who claimed that their crimes and poverty were the result of
alcohol.40 Social “scientists” later used those
correlations as propaganda “to persuade many people to turn to
saloon suppression and prohibition.”41
America had experienced a gradual decline in the rate of serious
crimes over much of the 19th and early 20th centuries. That trend
was unintentionally reversed by the efforts of the Prohibition
movement. The homicide rate in large cities increased from 5.6 per
100,000 population during the first decade of the century to 8.4
during the second decade when the Harrison Narcotics Act, a wave of
state alcohol prohibitions, and World War I alcohol restrictions
were enacted. The homicide rate increased to 10 per 100,000
population during the 1920s, a 78 percent increase over the
The Volstead Act, passed to enforce the Eighteenth Amendment,
had an immediate impact on crime. According to a study of 30 major
U.S. cities, the number of crimes increased 24 percent between 1920
and 1921. The study revealed that during that period more money was
spent on police (11.4+ percent) and more people were arrested for
violating Prohibition laws (102+ percent). But increased law
enforcement efforts did not appear to reduce drinking: arrests for
drunkenness and disorderly conduct increased 41 percent, and
arrests of drunken drivers increased 81 percent. Among crimes with
victims, thefts and burglaries increased 9 percent, while homicides
and incidents of assault and battery increased 13
percent.42 More crimes were committed because
prohibition destroys legal jobs, creates black-market violence,
diverts resources from enforcement of other laws, and greatly
increases the prices people have to pay for the prohibited
Instead of emptying the prisons as its supporters had hoped it
would, Prohibition quickly filled the prisons to capacity. Those
convicted of additional crimes with victims (burglaries, robberies,
and murders), which were due to Prohibition and the black market,
were incarcerated largely in city and county jails and state
prisons. According to Towne, “The Sing Sing prison deported no less
than sixty prisoners to Auburn in May 1922 because of
overcrowding.” Figure 3 shows the tremendous increase in the prison
population at Sing Sing in the early years of
Inmates at Sing Sing Prison: 1917-22
Hanson Towne, The Rise and Fall of Prohibition (New York:
Macmillan, 1923) p. 162.
Before Prohibition and the Harrison Narcotics Act (1914), there
had been 4,000 federal convicts, fewer than 3,000 of whom were
housed in federal prisons. By 1932 the number of federal convicts
had increased 561 percent, to 26,589, and the federal prison
population had increased 366 percent.44 Much of the
increase was due to violations of the Volstead Act and other
Prohibition laws. The number of people convicted of Prohibition
violations increased 1,000 percent between 1925 and 1930, and fully
half of all prisoners received in 1930 had been convicted of such
violations. Two-thirds of all prisoners received in 1930 had been
convicted of alcohol and drug offenses, and that figure rises to 75
percent of violators if other commercial prohibitions are
The explosion in the prison population greatly increased
spending on prisons and led to severe overcrowding. Total federal
expenditures on penal institutions increased more than 1,000
percent between 1915 and 1932. Despite those expenditures and new
prison space, prisons were severely overcrowded. In 1929 the normal
capacity of Atlanta Penitentiary and Leavenworth Prison was
approximately 1,500 each, but their actual population exceeded
To some the crime wave of the 1920s remained a mere “state of
mind” due mostly to media hype. For example, Dr. Fabian Franklin
noted that according to one measure, crime had decreased 37.7
percent between 1910 and 1923. However, the apparent contradiction
between the media hype and Franklin’s declining crime statistic is
resolved by the realization that violent and serious crime had
increased (hence the media hype), while less serious crime had
decreased. For example, theft of property increased 13.2 percent,
homicide increased 16.1 percent, and robbery rose 83.3 percent
between 1910 and 1923, while minor crimes (which were large in
number) such as vagrancy, malicious mischief, and public swearing
decreased over 50 percent.47 Even Franklin had to admit
that the increased homicides may have been related to the “illegal
The number of violations of Prohibition laws and violent crimes
against persons and property continued to increase throughout
Prohibition. Figure 4 shows an undeniable relationship between
Prohibition and an increase in the homicide rate. The homicide rate
increased from 6 per 100,000 population in the pre-Prohibition
period to nearly 10 per 100,000 in 1933. That rising trend was
reversed by the repeal of Prohibition in 1933, and the rate
continued to decline throughout the 1930s and early
Homicide Rate: 1910-44
U.S. Bureau of the Census, Historical Statistics of the United
States, Colonial Times to 1970 (Washington: Government Printing
Office, 1975), part 1, p. 414.
Not only did the number of serious crimes increase, but crime
became organized. Criminal groups organize around the steady source
of income provided by laws against victimless crimes such as
consuming alcohol or drugs, gambling, and prostitution. In the
process of providing goods and services, those criminal
organizations resort to real crimes in defense of sales
territories, brand names, and labor contracts. That is true of
extensive crime syndicates (the Mafia) as well as street gangs, a
criminal element that first surfaced during
The most telling sign of the relationship between serious crime
and Prohibition was the dramatic reversal in the rates for robbery,
burglary, murder, and assault when Prohibition was repealed in
1933. That dramatic reversal has Marxist and business-cycle crime
theorists puzzled to this day. For example, sociologist John
Pandiani noted that “a major wave of crime appears to have begun as
early as the mid 1920s [and] increased continually until 1933 …
when it mysteriously reversed itself.”50 Theodore
Ferdinand also found a “mysterious” decline that began in 1933 and
lasted throughout the 1930s.51 How could they miss the
significance of the fact that the crime rate dropped in 1933?
Prohibition Caused Corruption
It was hoped that Prohibition would eliminate corrupting
influences in society; instead, Prohibition itself became a major
source of corruption. Everyone from major politicians to the cop on
the beat took bribes from bootleggers, moonshiners, crime bosses,
and owners of speakeasies. The Bureau of Prohibition was
particularly susceptible and had to be reorganized to reduce
corruption. According to Assistant Secretary of the Treasury
Lincoln C. Andrews, “conspiracies are nation wide in extent, in
great numbers, organized, well-financed, and cleverly
conducted.”52 Despite additional resources and
reorganization, corruption continued within the bureau.
Commissioner of Prohibition Henry Anderson concluded that “the
fruitless efforts at enforcement are creating public disregard not
only for this law but for all laws. Public corruption through the
purchase of official protection for this illegal traffic is
widespread and notorious. The courts are cluttered with prohibition
cases to an extent which seriously affects the entire
administration of justice.”53
Prohibition not only created the Bureau of Prohibition, it gave
rise to a dramatic increase in the size and power of other
government agencies as well. Between 1920 and 1930 employment at
the Customs Service increased 45 percent, and the service’s annual
budget increased 123 percent. Personnel of the Coast Guard
increased 188 percent during the 1920s, and its budget increased
more than 500 percent between 1915 and 1932. Those increases were
primarily due to the Coast Guard’s and the Customs Service’s role
in enforcing Prohibition.54
Conclusion: Lessons for Today
Prohibition, which failed to improve health and virtue in
America, can afford some invaluable lessons. First, it can provide
some perspective on the current crisis in drug prohibition —
a 75-year effort that is increasingly viewed as a failure.
Repeal of Prohibition dramatically reduced crime, including
organized crime, and corruption. Jobs were created, and new
voluntary efforts, such as Alcoholics Anonymous, which was begun in
1934, succeeded in helping alcoholics. Those lessons can be applied
to the current crisis in drug prohibition and the problems of drug
abuse. Second, the lessons of Prohibition should be used to curb
the urge to prohibit. Neoprohibition of alcohol and prohibition of
tobacco would result in more crime, corruption, and dangerous
products and increased government control over the average
citizen’s life. Finally, Prohibition provides a general lesson that
society can no more be successfully engineered in the United States
than in the Soviet Union.
Prohibition was supposed to be an economic and moral bonanza.
Prisons and poorhouses were to be emptied, taxes cut, and social
problems eliminated. Productivity was to skyrocket and absenteeism
disappear. The economy was to enter a never-ending boom. That
utopian outlook was shattered by the stock market crash of 1929.
Prohibition did not improve productivity or reduce
absenteeism.55 In contrast, private regulation of
employees’ drinking improved productivity, reduced absenteeism, and
reduced industrial accidents wherever it was tried before, during,
and after Prohibition.56
In summary, Prohibition did not achieve its goals. Instead, it
added to the problems it was intended to solve and supplanted other
ways of addressing problems. The only beneficiaries of Prohibition
were bootleggers, crime bosses, and the forces of big government.
Carroll Wooddy concluded that the “Eighteenth Amendment …
contributed substantially to the growth of government and of
government costs in this period [1915-32].”57
In the aftermath of Prohibition, economist Ludwig von Mises
wrote, “Once the principle is admitted that it is the duty of
government to protect the individual against his own foolishness,
no serious objections can be advanced against further
encroachments.”58 The repeal of all prohibition of
voluntary exchange is as important to the restoration of liberty
now as its enactment was to the cause of big government in the
1 The “Koop doctrine,” for example, calls for a
smoke-free America by the year 2000. For a description of the
antialcohol movement, see Jacob Sullum, “Invasion of the Bottle
Snatchers,” Reason 21, no. 9 (February 1990): 26-32. For a
description of that movement’s subversive measures against alcohol,
see recent issues of Moderation Reader, which is published
by Citizens for Moderation, Seattle, Washington.
The federal bureaucracies charged with reducing access to
purportedly harmful substances will resort to almost any means to
achieve their goal. One example of their propa-ganda campaign is
the recent report on smoking in America, dubbed the “Sullivan
Report,” that claims that 390,000 deaths per year are caused by
smoking. That figure is very misleading. The estimate is based on a
faulty sample and methodology; the deaths do not represent “named,
individual persons”; and most of those “deaths” are of people over
65 years of age. For a critique of Sullivan’s estimate of the
number of deaths and the “cost” of smoking, see Richard Ault, “The
Economic Costs of Smoking: A Critique of Conven tional Wisdom”
(Paper presented to the Southern Economic Association, November
1990). It should also be noted that prohibition of tobacco products
was attempted at the state level during the 1920s and was a
miserable failure. See Mark Thornton, “The War on Tobacco,” Free
Market, November 1990, pp. 7-8. For further insight into the
character of bureaucrats, see the sympathetic interview with
Secretary of Health and Human Services Louis Sullivan in the
Saturday Evening Post, September 1990.
2 See Mark Thornton, The Economics of
Prohibition (Salt Lake City: University of Utah Press, 1991,
3 Clark Warburton, The Economic Results of
Prohibition (New York: Columbia University Press, 1932);
Irving Fisher, Prohibition at Its Worst (New York: Alcohol
Information Committee, 1927). For a recent estimate of consumption
of alcohol during Prohibition that concurs with earlier estimates,
see Jeffrey A. Miron and Jeffrey Zwiebel, “Alcohol Consumption
during Prohibition,” American Economic Review: Papers and
Proceedings 81, no. 2 (May 1991): 242-47.
4 See Mark Thornton, The Economics of
Prohibition (Ph.D. diss., Auburn University, 1989), pp.
5 Warburton’s estimates are the most reliable,
although he felt that he might have underestimated the sales of the
most potent products — spirits. Warburton, pp. 104-8.
6 According to Warburton, from 1921 to 1929 the
apparent per capita consumption of beer increased 463 percent, that
of wine increased 100 percent, and that of spirits increased 520
percent. While per capita beer consumption in 1929 was only
one-third the 1909 level, per capita consumption of wine and
spirits was above 1909 levels. If that trend had continued, total
per capita consumption of alcohol would have surpassed
pre-Prohibition levels during the mid-1930s. Warburton, p. 174.
7 As noted above, Warburton found that production of
beer, wine, and spirits rapidly expanded during the 1920s. It
should be remembered that illegal sources of alcohol were just
organizing in 1920-21 and that large inventories could still be
relied on during those early years.
8 Bureau of Prohibition, Statistics Concerning
Intoxicating Liquors (Washington: Government Printing Office,
December 1930), p. 2.
9 Richard Cowan, “How the Narcs Created Crack,”
National Review, December 5, 1986, pp. 30-31.
10 See Mark Thornton, “The Potency of Illegal Drugs,”
Auburn University working paper, 1986; and Thornton, The Eco nomics
11 See Thornton, The Economics of
Prohibition, pp. 176-79.
12 Alcohol produced for industrial, medical, and
ceremonial purposes, although illegally consumed, could not be
13 Data from Warburton, pp. 114-15; and Licensed
Beverage Industry, Facts about the Licensed Beverage
Industry (New York: LBI, 1961), pp. 54-55.
14 The same effect can be seen at most college
football games where alcoholic beverages are prohibited. Football
fans are normally beer drinkers. However, they typically become
brandy, bourbon, and rum smugglers at football games. It is easier
to smuggle any given quantity of alcohol in the form of more potent
15 Fisher, p. 91. His support for Prohibition may
have blinded him to the importance of the change in relative
prices. Certainly others have made a similar mistake, such as Tun
Yuan Hu, The Liquor Tax in the United States: 1791-1947
(New York: Columbia University Graduate School of Business, 1947),
p. 54, who found it “difficult to agree with him Warburton] that
prohibition had not curtailed but, on the contrary, increased the
consumption of spirits.”
16 Henry Lee, How Dry We Were (Englewood
Cliffs, N.J.: Prentice-Hall, 1963). Lee refers to 38-proof (100
proof equals 50 percent ethyl alcohol by volume) beer (p. 76),
which would have been five times the strength of legal beer, and to
170-proof spirits (p. 202) that were produced on a large scale and
had roughly twice the potency of legal spirits.
17 Fisher, pp. 28-29. Fisher was not describing an
unfortunate consequence of Prohibition; he was trying to explain
“distortions” in the statistics on arrests for drunkenness.
According to Fisher, people were drinking less but getting
18 Thomas M. Coffey, The Long Thirst: Prohibition
in America, 1920-1933 (New York: W.W. Norton & Co., 1975), pp.
19 Quoted in Lawrence W. Reed, “Would Legalization
Increase Drug Use?” Free Market, February 1990.
20 Warburton, p. 206.
21 Clarence Darrow and Victor S. Yarros, The
Prohibition Mania: A Reply to Professor Irving Fisher and
Others (New York: Boni and Liveright, 1927).
22 Warburton, p. 222.
23 Physician F. E. Oliver reported in 1872 on several
studies that showed that consumption of opiates and other nar
cotics increased dramatically when the price of alcohol rose or
when prohibitions were enforced. The use of narcotics was also
common among the membership of total abstinence societies. Wayne H.
Morgan, Yesterday’s Addicts: American Society and Drug
Abuse, 1865-1920 (Norman: University of Oklahoma Press, 1974),
25 R. Norton, R. Bartez, T. Dwyer, and S. MacMahoney,
“Alcohol Consumption and the Risk of Alcohol-Related Cirrhosis in
Women,” British Medical Journal 295 (1987): 80-82.
25 See, for example, Warburton, p. 73, and Gene Ford,
Drinking and Health (San Francisco: Wine Appreciation
Guild, 1990), p. 79.
26 Wine Institute, Wine and Medical
Practice, 10th ed. (San Francisco: Wine Institute, 1979);
cited in Ford, p. 79.
27 New York Times, March 26, 1931, p. 1.
28 The death rate due to alcoholism and cirrhosis
began to decrease after 1916, before the wartime restrictions
began. The tax rate on a gallon of distilled spirits increased from
$1.10 to $3.20 in October 1917 and to $6.40 in February 1919. The
War Prohibition Act did not become effective until July 1, 1919.
Taking into account massive immigration and the impact of World War
I, the alcohol-related death rate may have begun to decline much
earlier. It should also be noted that death due to alcoholism and
cirrhosis is thought to be the result of a long, cumulative
process; therefore, the decrease in death rates must, in part, be
at tributed to factors at work before the wartime restrictions on
alcohol and Prohibition.
29 Warburton, p. 90.
30 Ibid., pp. 78-90.
31 Darrow and Yarros, p. 40.
32 Warburton concludes that “there is thus no
statistical evidence, at least so far as these death rates are
concerned, that prohibition has had a measurable influence upon the
general public health, either directly or indirectly through the
living standard” (p. 221).
33 Darrow and Yarros, pp. 139-46.
34 Hugo Mnsterberg, American Problems from the
Point of View of a Psychologist (1910; Freeport, N.Y.: Books
for Libraries Press, 1969); quoted in Darrow and Yarros, pp.
35 Gene Ford, The Benefits of Moderate Drinking:
Alcohol, Health and Society (San Francisco: Wine Appreciation
Guild, 1988), pp. 18-26. It may be more appropriate in some cases
to say that the problems are with the consumers rather than with
the goods themselves.
36 Ibid., pp. 27-30.
37 American Heart Association, “Report of
Inter-Society Commission for Heart Disease Resources,” 1984; quoted
in Ford, pp. 30-31.
38 Thomas Nixon Carver, Government Control of the
Liquor Business in Great Britain and the United States (New
York: Oxford University Press, 1919), chap. 6.
39 Quoted in Michael Woodiwiss, Crimes, Crusades
and Corruption: Prohibitions in the United States, 1900-1987
(London: Pinter Publishers, 1988), p. 6.
40 John A. Krout, The Origins of Prohibition
(New York: Alfred A. Knopf, 1925), pp. 234-35.
41 James H. Timberlake, Prohibition and the
Progressive Movement: 1900-1920 (Cambridge, Mass.: Harvard
University Press, 1963), p. 60. Timberlake notes that such
correlations were a key element in turning social science away from
the concept of free will and toward acceptance of environmental
42 Charles Hanson Towne, The Rise and Fall of
Prohibition: The Human Side of What the Eighteenth Amendment Has
Done to the United States (New York: Macmillan, 1923), pp.
156-61. The 30 cities examined had a total population of more than
10 million. A closer examination of the cities studied indicates
that the greatest increases in crime occurred in those that were
previously wet; the only cities to experience a decline in arrests
were already dry when Prohibition was enacted.
43 Ibid., p. 162.
44 Carroll H. Wooddy, The Growth of the Federal
Government, 1915-1932 (New York: McGraw-Hill, 1934), p.
45 Ibid., p. 94.
46 Ibid., p. 75.
47 Fisher, pp. 75-80.
48 Figure 4 is a revised table first suggested by
James Ostrowski, “Thinking about Drug Legalization,” Cato Institute
Policy Analysis no. 121, May 28, 1989.
49 Thornton, The Economics of Prohibition,
50 John A. Pandiani, “The Crime Control Corps: An
Invisible New Deal Program,” British Journal of Sociology
33 (Septem ber 1982): 348-58.
51 Theodore N. Ferdinand, “The Criminal Patterns of
Boston since 1849,” American Journal of Sociology 73
52 U.S. Department of the Treasury, Prohibition
Enforcement (Washington: Government Printing Office, 1927), p.
53 National Commission on Law Observance and
Enforcement, Enforcement of the Prohibition Laws of the United
States (Washington: Government Printing Office, 1931), p. 90.
54 Ibid., p. 215. The additional resources greatly
expanded the enforcement of Prohibition. The annual number of
liquor seizures by Customs doubled between 1927 and 1931.
55 Ibid.; Warburton, pp. 203-06.
56 Thornton, The Economics of Prohibition,
57 Ibid.; Wooddy, p. 104.
58 Ludwig von Mises, Human Action, 3d
revised ed. (Chicago: Henry Regnery, 1966), p. 733.