When you ask most people what they think of when they hear the word Prohibition, they will probably tell you “speakeasies and gangsters.” Prohibition is a perfect example of the law of unintended consequences-- a law meant to curb drinking that encouraged it. The widespread flouting of this law made criminals of people who would never have dreamt of breaking the law before it was passed.
Prohibition came about as the result of the passage of a Constitutional amendment, and is a perfect example of why it isn’t a good idea to amend the Constitution for every current cause. Since the Constitution is the operating system on which our country runs, passing a whole lot of amendments is like sticking apps into your operating system-- it just gums up the works.
There have been 27 amendments to the Constitution. Most of these have either fixed glitches in the operating system-- like the twelfth amendment, which put the president and vice president onto the same ballot-- or they have expanded individual freedoms, like the Bill of Rights and the amendments that gave the vote to blacks, to women, and to citizens between the ages of 18 and 21.
The amendment that created prohibition-- the 18th amendment-- is the only one to have contracted individual freedoms, and the only one to have been repealed.
The Eighteenth Amendment forbade the sale, importation, or transportation of “intoxicating liquors” within or into the United States. And Americans did drink a lot, and always had-- even in colonial times. In an era before refrigeration, and when waste was dumped into rivers and streams, alcoholic beverages were among the safest of drinks. In addition, alcohol was thought to have medicinal value, so it was consumed morning, noon and night.
Social reformers were determined to end this widespread overuse of alcohol. But as is the case with the use of drugs today, when people are determined to do something, they will find a way. In the 1920s, they did just that. The law meant to curb drunkenness had the result of encouraging it instead. The net effect of the Amendment-- and the Volstead Act that detailed its enforcement-- was to force drinking underground.
The Volstead Act was named for the Minnesota congressman who was its author. It forbade the manufacture, import and sale of alcohol, but did not forbid its consumption. It made exemptions for alcohol used for scientific or medicinal or sacramental purposes, and even allowed people to produce a limited amount of alcohol for their own use, that of their family, and of bonafide guests. The result? It was estimated that as much as 700 millions of gallons of beer was brewed in homes in 1929.
But there were other results of prohibition besides the rise of a general disrespect for the law. There was the inability of the government to regulate the content of home brews, which were known on occasion to poison people. There was the loss of all the tax revenue from the sale of alcoholic beverages. And an entire industry was forced out of business.
Milwaukee, famous for its breweries, was hard hit. While illegal enterprises related to the production of alcohol flourished in places like Chicago, or in the hills of Appalachia--where using souped up vehicles to outrun the feds became the forerunner of NASCAR racing-- in Milwaukee, local brewers took to alternate industries.
Milwaukee’s former brewers turned to producing cheese, malt syrup, candy and yeast. The Uihlein family, who owned the Joseph Schlitz Brewing Company, entered into a disastrous experiment, making chocolate bars under their phonetically spelled name. Among other things that went wrong with their candy was a fish-oil coated wrapper that spoiled the taste.
The Uihleins also sold off their interest in many of the iconic Schlitz taverns throughout the city.
The National Distilling Company, which had produced hard liquors like whiskey and gin, had also owned the Red Star Yeast company. When prohibition came, they had to shut down the distillery-- and its famous “wet bar,” which had dispensed free gin to those who stopped in, including the local police who were patrolling the area. They took the name of their yeast division, and later lost the distilling name as a result of its disuse.
But Milwaukee’s brewers did not disassemble their breweries. And when Franklin Delano Roosevelt campaigned on, among other things, repealing the 18th Amendment, American brewers contributed over $300,000 to his campaign. When Prohibition, which had gone into effect on January 16, 1920, was repealed on December 5, 1933, they were in place to be up and running immediately. A Constitutional blunder was remedied, and the rest is history.
Essayist Ellen Kozak on the 18th Amendment
Anti-Saloon League paper, The American Issue, with headline, "U.S. Is Voted Dry", Anti-Saloon League Museum
When the Mayor of Berlin, Gustav Boess, visited New York City in the fall of 1929, one of the questions he had for his host, Mayor James J. Walker, was when Prohibition was to go into effect. The problem was that Prohibition has already been the law of the United States for nearly a decade. That Boess had to ask tells you plenty about how well it was working.
The Noble Experiment
When the Prohibition era in the United States began on January 19, 1920, a few sage observers predicted it would not go well. Certainly, previous attempts to outlaw the use of alcohol in American history had fared poorly. When a Massachusetts town banned the sale of alcohol in 1844, an enterprising tavern owner took to charging patrons for the price of seeing a striped pig—the drinks came free with the price of admission. When Maine passed a strict prohibition law in 1851, the result was not temperance, but resentment among the city's working class and Irish immigrant population. A deadly riot in Portland in 1855 lead to the law's repeal. Now, Prohibition was being implemented on a national scale, and being enshrined in the Constitution no less. What followed was a litany of unintended consequences.
This should have come as no surprise with a venture as experimental as Prohibition. It is no mistake that President Herbert Hoover's 1928 description of Prohibition as "a great social and economic experiment, noble in motive and far-reaching in purpose" entered the popular lexicon as "the noble experiment." It was unfortunate for the entire nation that the experiment failed as miserably as it did.
Anheuser-Busch Bevo near beer poster, Anheuser-Busch
The Atlanta Constitution Cover: "$100,000,000 For Government From Income Tax", Library of Congress Prints and Photographs Division
Economics of Prohibition
Prohibition's supporters were initially surprised by what did not come to pass during the dry era. When the law went into effect, they expected sales of clothing and household goods to skyrocket. Real estate developers and landlords expected rents to rise as saloons closed and neighborhoods improved. 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. In New York, almost 75% of the state's revenue was derived from liquor taxes. With Prohibition in effect, that revenue was immediately lost. At the national level, Prohibition cost the federal government a total of $11 billion in lost tax revenue, while costing over $300 million to enforce. 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.
Volstead Act, page 1, National Archives and Records Administration
Bottle of bonded medicinal whiskey, "For Medical Purposes Only", Culver Pictures
IRS Treasury official with confiscated still, Library of Congress Prints and Photographs Division
"Cat and Mouse"
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. Home stills were technically illegal, but Americans found they could purchase them at many hardware stores, while instructions for distilling could be found in public libraries in pamphlets issued by the U.S. Department of Agriculture. The law that was meant to stop Americans from drinking was instead turning many of them into experts on how to make it.
The trade in unregulated alcohol had serious consequences for public health. As the trade in illegal alcohol became more lucrative, the quality of alcohol on the black market declined. On average, 1000 Americans died every year during the Prohibition from the effects of drinking tainted liquor.
A line of shamefaced bootleggers in a Detroit, Michigan police station, Photofest
The Greatest Consequence
The effects of Prohibition on law enforcement were also negative. The sums of money being exchanged during the dry era proved a corrupting influence in both the federal Bureau of Prohibition and at the state and local level. Police officers and Prohibition agents alike were frequently tempted by bribes or the lucrative opportunity to go into bootlegging themselves. Many stayed honest, but enough succumbed to the temptation that the stereotype of the corrupt Prohibition agent or local cop undermined public trust in law enforcement for the duration of the era.
The growth of the illegal liquor trade under Prohibition made criminals of millions of Americans. As the decade progressed, court rooms and jails overflowed, and the legal system failed to keep up. Many defendants in prohibition cases waited over a year to be brought to trial. As the backlog of cases increased, the judicial system turned to the "plea bargain" to clear hundreds of cases at a time, making a it common practice in American jurisprudence for the first time.
The greatest unintended consequence of Prohibition however, was the plainest to see. For over a decade, the law that was meant to foster temperance instead fostered intemperance and excess. The solution the United States had devised to address the problem of alcohol abuse had instead made the problem even worse. The statistics of the period are notoriously unreliable, but it is very clear that in many parts of the United States more people were drinking, and people were drinking more.
There is little doubt that Prohibition failed to achieve what it set out to do, and that its unintended consequences were far more far reaching than its few benefits. The ultimate lesson is two-fold. Watch out for solutions that end up worse than the problems they set out to solve, and remember that the Constitution is no place for experiments, noble or otherwise.
By Michael Lerner, historian