Chewing gum, grape juice, and soft drink companies all expected growth. Theater producers expected new crowds as Americans looked for new ways to entertain themselves without alcohol. None of it came to pass. Instead, the unintended consequences proved to be a decline in amusement and entertainment industries across the board. Restaurants failed, as they could no longer make a profit without legal liquor sales.
Theater revenues declined rather than increase, and few of the other economic benefits that had been predicted came to pass. On the whole, the initial economic effects of Prohibition were largely negative.
The closing of breweries, distilleries and saloons led to the elimination of thousands of jobs, and in turn thousands more jobs were eliminated for barrel makers, truckers, waiters, and other related trades. The unintended economic consequences of Prohibition didn't stop there. 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.
With Prohibition in effect, that revenue was immediately lost. 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. Prohibition led to many more unintended consequences because of the cat and mouse nature of Prohibition enforcement. While the Eighteenth Amendment prohibited the manufacture, sale and transportation of intoxicating beverages, it did not outlaw the possession or consumption of alcohol in the United States.
The Volstead Act, the federal law that provided for the enforcement of Prohibition, also left enough loopholes and quirks that it opened the door to myriad schemes to evade the dry mandate.
One of the legal exceptions to the Prohibition law was that pharmacists were allowed to dispense whiskey by prescription for any number of ailments, ranging from anxiety to influenza. Bootleggers quickly discovered that running a pharmacy was a perfect front for their trade. As a result, the number of registered pharmacists in New York State tripled during the Prohibition era. 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. With a wink and a nod, the American 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.
And ultimately it did not result in a significant or lasting drop in alcohol consumption. For these reasons, many people believe it was a failure , which should give pause to policymakers and others pushing for a ban on smoking or vaping.
And even the person most responsible for drafting Prohibition legislation, US Rep. Andrew Volstead R-Minn. So, as an economist, I believe if you want to stop people from doing something injurious to their health, raising the price works better than a ban. This commentary originally appeared on The Conversation. Boston University moderates comments to facilitate an informed, substantive, civil conversation. Abusive, profane, self-promotional, misleading, incoherent or off-topic comments will be rejected.
Moderators are staffed during regular business hours EST and can only accept comments written in English. Statistics or facts must include a citation or a link to the citation. Should be a reminder that a healthy relationship to alcohol is important including lowering the drinking age to a standard Your email address will not be published.
Boston University More Publications. The Brink. January 17, Jay Zagorsky. Twitter Facebook. Post a comment. Cancel reply Your email address will not be published. The 21st Amendment was ratified on December 5, , ending Prohibition.
In , the state of Massachusetts passed a temperance law banning the sale of spirits in less than gallon quantities; though the law was repealed two years later, it set a precedent for such legislation.
Maine passed the first state prohibition laws in , followed by a stricter law in A number of other states had followed suit by the time the Civil War began in By the turn of the century, temperance societies were a common fixture in communities across the United States. Women played a strong role in the temperance movement, as alcohol was seen as a destructive force in families and marriages. In , a new wave of attacks began on the sale of liquor, led by the Anti-Saloon League established in and driven by a reaction to urban growth, as well as the rise of evangelical Protestantism and its view of saloon culture as corrupt and ungodly.
In addition, many factory owners supported prohibition in their desire to prevent accidents and increase the efficiency of their workers in an era of increased industrial production and extended working hours. In , after the United States entered World War I , President Woodrow Wilson instituted a temporary wartime prohibition in order to save grain for producing food.
That same year, Congress submitted the 18th Amendment, which banned the manufacture, transportation and sale of intoxicating liquors, for state ratification.
Though Congress had stipulated a seven-year time limit for the process, the amendment received the support of the necessary three-quarters of U. Ratified on January 16, , the 18th Amendment went into effect a year later, by which time no fewer than 33 states had already enacted their own prohibition legislation.
In October , Congress put forth the National Prohibition Act, which provided guidelines for the federal enforcement of Prohibition. Both federal and local government struggled to enforce Prohibition over the course of the s. In general, Prohibition was enforced much more strongly in areas where the population was sympathetic to the legislation—mainly rural areas and small towns—and much more loosely in urban areas.
Despite very early signs of success, including a decline in arrests for drunkenness and a reported 30 percent drop in alcohol consumption, those who wanted to keep drinking found ever-more inventive ways to do it. In addition, the Prohibition era encouraged the rise of criminal activity associated with bootlegging. Such illegal operations fueled a corresponding rise in gang violence, including the St.
Even as costs for law enforcement, jails and prisons spiraled upward, support for Prohibition was waning by the end of the s. In addition, fundamentalist and nativist forces had gained more control over the temperance movement, alienating its more moderate members.
With the country mired in the Great Depression by , creating jobs and revenue by legalizing the liquor industry had an undeniable appeal.
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