The paradox of national prohibition is shown in the law’s simultaneous substantial reduction of alcohol consumption and its loss of popular support because of perceived ineffectiveness. Declining public enthusiasm for the liquor ban did not lead inevitably to repeal, the essay argues, because the actual and assumed difficulties of further constitutional amendment were so formidable. A well-organized pressure group and the unique method of amendment ratification by popularly elected state conventions contributed to the success of the repeal effort. Among the consequences of national prohibition’s perceived failure and rapid fall, the essay concludes, are as yet unresolved questions about the proper role of law in dealing with alcohol abuse as well as continuing political caution regarding any proposed constitutional amendment. Many of the essays which follow deal in one way or another with issues of alcohol control and the impact of constitutional change.
The Temperance Movement was popular in the USA during the first two decade of the 19th century. The battle over adoption of national prohibition and the implementation of the law disrupted organized labor, Prior to 1919 the scientific and medical community, the American Medical Association in particular, contributed influential arguments in support of a national ban on alcoholic beverages despite its own internal divisions of opinion on the issue, The problem is that none of these services are improved prior to the advent of alcohol prohibition. The city, county, and state do not have the available funds. Thus, these changes must await the increased revenues from real estate taxes and luxury taxes. None of these services improve in time. It makes sense to slow down the development of new markets to permit the public facilities to catch up. The law enforcement agencies in Atlantic City felt that they had a good chance to do this because the members of organized crime had not hitherto focussed their operations on Atlantic City. Members of organized crime would have to move into the city. The prohibition gave the Control Commission strong powers to eliminate the influence of organized crime from the ownership. Liquor licenses were examined for evidence that owners were involved in organized crime activities. However, a great many goods and services are involved in peripheral activities, and these are not subject to any regulation.
The need to prohibit alcohol is explained by the following facts. There still remains the problem of attribution of the accident to alcohol consumption. It is not beyond the bounds of possibility that some of these accidents may have occurred even though no driver or rider involved in them had consumed alcohol. At the same time, some of the accidents in which no driver or rider was over the legal limit may have been due to the reduction in driving skills known to take place in susceptible individuals at blood alcohol levels below the legal limit. A forthcoming report from the Transport and Road Research Laboratory (in press) indicates that around 14% of all road casualties attending accident and emergency departments had been drinking, which sets an upper limit on the proportion of such casualties which might be alcohol-related. Alcohol is likely to play a part in accidents of other kinds, such as industrial accidents, domestic accidents, fires, accidental poisonings and drownings. However, there appear to be few studies which would permit estimation of the proportion of these attributable to alcohol. This has not deterred some authorities from producing ‘guesstimates’ in this area, notably the Royal College of General Practitioners ( 1986), who attribute 40% of all deaths due to injuries and poisonings in both sexes to alcohol, which compares strangely with McDonnell and Maynard’s earlier ‘high’ estimates of 33% for men and 6% for women. A more recent investigation suggests that a proportion of around 19% of male admissions to an acute orthopaedic ward were alcohol-related, although there are some deficiencies in the methods of analysis employed. Restricting attention to alcohol and crime-related mortality, there were 164 male and 113 female deaths officially recorded as due to homicide or deliberately-inflicted injury by another person in England and Wales in 1989. Even if there is a considerable element of undercounting, it is clear that crime-related mortality is not a major cause of death and will contribute little to any estimate of total mortality attributable to alcohol.
Speakeasies and bootlegging had a great impact on prohibition and control over the black market operations. In the first two months after the stores opened, nonviolent street crime increased by 27 percent. Larcenies increased by 40 percent and motor vehicle thefts by 38 percent. In other urban areas of New Jersey, meanwhile, crime rates were decreasing. The advent appears to increase crime rates. Concern was expressed over the changing community standards with particular reference to the growth of entertainment that might be considered lewd. The Control Commission can control this market, and local law enforcement agencies in the community in general. However, more entertainment is surely going to be offered that will offend the taste of some local residents. Some people were concerned about the abuse of civil rights by law enforcement agencies in their attempts to eliminate people with organized crime connections. Already, abuses have been identified. For example, hotel employees had to give social security numbers to facilitate the search of criminal records; this action is being contested in court.
As has been noted, there is disagreement as to the regressive nature of alcohol prohibition taxes as a source of revenue. The argument for regressivity is supported by the observed pattern of alcohol prohibition behavior for persons of different income groups. One counterargument is a more theoretical one. It maintains that alcohol prohibition demand depends on the structure of prizes and not It should be realized that the degree of substitutability between legal and illegal alcohol prohibition is greatly affected by such factors as credit policies of a alcohol prohibition enterprise and tax policies toward alcohol prohibition and alcohol prohibition winnings. Here again arises the inherent conflict between the desire to be competitive with illegal operations and the need to raise revenue. Alcohol prohibition demand has been shown to be price elastic, i.e. a reduction in the take-out rate results in an increase in the total amount wagered. But, to the extent that the lower take-out rate is from a lower tax, total government revenue will decline if the increased handle can not compensate for the lower tax rate. Therefore, policymakers must use the tax rate that maximizes tax revenue. The effects of the tax rate on demand and revenue can be illustrated with national horse racing. The lowered tax rates brought a small increase in wagers, but a much greater reduction in government revenue. Other examples of this phenomenon have been cited for Nevada Horse and Sport-Betting parlors.
Al Capone and mafia took an active part in production and selling of illegal alcohol. Supporters of legalization argue that more effective and deliberate regulation of alcohol prohibition could reduce or eliminate many of the problems associated with Las Vegas alcohol prohibition. They point out that, revenue considerations aside, alcohol prohibition enterprises are achieving respectability through public ownership and offer attractive opportunities for the individual investor. The debate has been rekindled by recent developments in New Jersey, and in Atlantic City in particular. Atlantic City provides a laboratory for new experiments in cooperation between the public and private sectors in the operation and control of alcohol prohibition enterprises. We now review briefly the activities leading up to this partnership, describe some of its effects, and speculate as to its future. Intervening events illustrate the conflict cited earlier between the revenue and law enforcement aspects of alcohol prohibition legalization. While Governor Byrne asserts that he will have clean alcohol prohibition or none at all in Atlantic City, the city officials have publicly supported the Resorts appeal, citing the economic benefits afforded to the slowly reviving resort town.
Alcohol prohibition had a positive impact on society as it protected people from illegal alcohol and limits consumption of alcohol among diverse social groups;. Regardless of the particular determination, alcohol prohibition should continue to have an important impact on the economy, although less so on the overall state economy. As economists, some formerly with the Commission on the Review of the National Policy toward Alcohol prohibition, agree, alcohol prohibition can not provide an adequate tax base for the state. Even in the unlikely event that Atlantic City becomes another Las Vegas, the greater population density in New Jersey would mean that alcohol prohibition revenues would be only about 3 percent of the state budget. Also to be considered is the increased competition with which Atlantic City and New Jersey will most certainly have to contend as the trend to legalization continues. In order to counter the price elasticity of alcohol prohibition demand while promoting its own revenue source, New Jersey may need to act collectively with other states in the establishment of tax rates. Otherwise, lowered rates may result in lowered revenues because, as discussed earlier, the increased volume may be inadequate to compensate for the lowered rates. It is less certain, however, whether and for how long the states will be able to sustain such an effort and resist the pressures to which other cartels have been known to succumb.
Also in question is the ability of the state to curtail what is seen as the inevitable infiltration of organized crime. This could promote the move from government regulation of private enterprise to a wholly government-owned and government operated alcohol prohibition. Such a transition is considered undesirable. For one, competition among private concerns should promote lower take-out rates, which in turn could benefit both the bettor and the state. The bettor would benefit to the extent that winnings increase. The state would benefit to the extent that lower take-out rates stimulate betting and generate revenue both from business operating revenues and personal alcohol prohibition winnings. Second, bettors and taxpayers may be unwilling to concede that a government-operated alcohol prohibition operation is any less morally offensive than a privately operated one. Given existing differences between the effective tax rates on legal and illegal alcohol prohibition winnings, this could promote alcohol prohibition activity in illegal forms. The revenue losses that would result might well be secondary to the loss of government’s law enforcement authority. The trend to legalization rests on a similar steady increase in government alcohol prohibition revenues over the past decade.
Success will surely spur this trend to legalization, greater investor interest in alcohol prohibition stocks, and financial support of the alcohol prohibition boom. And as the expansion continues, it seems even more likely that all arguments to the contrary will be outweighed by the potential economic gains to the state and to the individual and institutional investor. Such is the irony of the economics of alcohol prohibition, for these aggregate impacts are attributable to the multitude of individuals, whose wagers can be considered largely futile endeavors to share in the monetary benefits that their alcohol prohibition provides for others.
In sum, the effect of these prohibitions is to regulate the market more severely and with greater consistency. These directives signal police and prosecutors that the judiciary will fully support upgrading the importance of alcohol prohibition violations. While other laws are also difficult to enforce, there are few offenses that are subject to such a unique combination of constraints. Alcohol prohibition laws, with their tremendous profits, are an institution deeply entrenched in society. The institution is supported by those who like to drinkers and by others who view illicit alcohol prohibition as a minor offense. Alcohol prohibition today, as in the past, has a very low priority in comparison to other crimes. Police officers are given limited resources and less encouragement in alcohol prohibition enforcement. Moreover, they are subject to considerable abuse when they are unsuccessful and get little credit if they do a good job. Police often find themselves the targets of criticism and the scapegoats of legislators. With crime rates and the fear of crime on the increase, law enforcement resources are spread thin. Violent crime dominates the agenda of police, politicians, and the public. In all likelihood, a familiar pattern will remain on the landscape: alcohol prohibition laws will continue to be given second class treatment; organized groups, in turn, will continue to flourish; politicians and public officials will continue to be corrupted; and the public’s confidence in law and the police will continue to be eroded.
Reference
Behr, E. Prohibition: Thirteen Years That Changed America. Arcade Publishing, 1997.
Clark, N. H. Deliver Us from Evil: An Interpretation of American Prohibition. W. W. Norton & Company, 1976.
Kyving, D. E. Law, Alcohol, and Order: Perspectives on National Prohibition. Greenwood Press, 1985.
Lucas, E. The Eighteenth and Twenty-First Amendments: Alcohol–Prohibition and Repeal (Constitution (Springfield, Union County, N.J.).) Lucent Books; 1 edition, 2003.
Pack, G. The Prohibition Hangover: Alcohol in America from Demon Rum to Cult Cabernet. Rutgers University Press, 2009.
Thomton, M. The Economics of Prohibition. Univ of Utah Pr, 1991.
Woog, S. A. Words That Changed History – Prohibition: Banning Alcohol. Lucent Books; 1 edition, 2003.