« Gonzales | Main | Shock Troops »

July 26, 2007

Comments

Makes sense to me, FWIW. And an interesting piece of social history, too. Thanks for sharing.

Anyone have enough good historical knowledge about the issue to say if this theory is plausible?

Did they even bother to look at the process by which the 21st amendment was ratified?

And I would note that this sounds like a version of the WSJ editorial page's "private equity/hedge funds are making too much money so congress wants to tax them/attrack campaign donations" fantasy.

Sebastian,

Given that the source is a Scaife-funded paper, I am taking it with a grain of salt. My limited knowledge of that era in history leads me to suspect that the revenue information is likely accurate, but other, larger forces were in play, including the violence that was generated by the gangs operating the speakeasies, and the general unpopularity of Prohibition.

Having just read Maureen Ogle's history of beermaking in America (Ambitious Brew): the first part (that income tax made Prohibition possible) is valid (and not new--she makes this point). She says less about repeal; but since Hoover promised (in his 1928 campaign) to have the problem studied, there must have been significant concern by then. I wouldn't discount the increasing awareness, over time, of the social cost of Prohibition, as compared to the social cost of drinking. Note that the level of alcohol consumption after was indeed much less than before.

An interesting tidbit: The repeal Amendment is the only one that Congress had go through state conventions rather than state legislatures. I'm not sure how that fits in to the concept but intuitively I would think the difference happened for some reason (trying to find a definitive analysis of that). (Was that process faster than the legislative process which could drag on for years?)

Anyway, just throwing it out there.

The repeal Amendment is the only one that Congress had go through state conventions rather than state legislatures.

that's what I was obliquely referring to above - the idea that the people were gung-ho to repeal prohibition so Congress could tax alcohol sales is ridiculous.

I might, might, be willing to believe the prospect of extra revenue tipped a vote in congress or two, but the idea that it was the driving force behind the repeal - seems way beyond, as you say Sebastion, the "conventional wisdom."

On further reading, I find that Congress used the state convention procedure because while Prohibition was unpopular with citizens, there were many state lesgislature which were considered to be dry-oriented. They used the convention procedure to get around these legislatures. This shows that the Amendment was very important to Congress and not nearly as important to the states. This cuts at least a little bit against the 'crime' explanation, since the crime associated with prohibition certainly impacted state-level police concerns. (The FBI had lots of jurisdictional problems at the time which hampered its investigations far more than occurs in modern drug investigations). It is plausible that Congress was so concerned to avoid the state legislature's thoughts on the issue because it was desperate for cash.

"that's what I was obliquely referring to above - the idea that the people were gung-ho to repeal prohibition so Congress could tax alcohol sales is ridiculous."

But the popular will turned against prohibition almost immediately. Congress was in no rush to worry about that in the 1920s.

"there were many state lesgislature which were considered to be dry-oriented."

Pennsylvania's still is. Since Prohibition was repealed, they've had to settle for taking a large number of actions to make alcohol consumption merely difficult and expensive instead of illegal.

Sebastian - The amendment permits state legislatures to bar the sale of alcohol if they so wish - and indeed prohibits the importation of alcohol into a state in violation of the laws therein (in one of the only places in the constitution places a bar on individual's actions).

Why try to go around state legislature's when, in effect, you haven't gone around them?

Ugh: that's what I was obliquely referring to above - the idea that the people were gung-ho to repeal prohibition so Congress could tax alcohol sales is ridiculous.

Sure.

But, the idea that Congress was facilitating the repeal of Prohibition because it was anticipating revenue from taxing alcohol, makes a lot of sense.

People would have wanted Prohibition repealed for all sorts of reasons. That doesn't contradict the idea that the federal government wanted Prohibition repealed in order to tax alcohol sales.

Florence King writes in Confessions of a Failed Southern Lady and Southern Ladies and Gentlemen that in some dry states they passed a tax on "black market hooch" - how this was possible, or if it ever happened, I don't know: though I love her dearly, I know King is not a reliable narrator.

"...make alcohol consumption merely difficult and expensive instead of illegal."

My wallet does tend to be much lighter after stumbling out of Monk's.

I guess I can believe that extra tax revenue was a motivation, it just seems to me that the authors of the article are placing way too much weight on it, both for enacting prohibition in the first place and then repealing it - almost to the exclusion of all else.

That is - the authors seem to put forth the tax motivation as the reason for the actual repeal - which was done by the people - rather than Congress passing the amendment (I suppose I could be misreading the article).

Prohibition indeed.

DEA Seeks to Shut Legal Marijuana Centers in Los Angeles

and

Marijuana Centers in Los Angeles

Actually I can very easily see the tax window on the front end. Before the 16th amendment (authorizing income tax), the liquor tax was absolutely critical to the functioning of the federal government. Prohibition pushes had existed throughout the early history of the United States, but they couldn't possibly get federal traction before the income tax.

The amendment permits state legislatures to bar the sale of alcohol if they so wish - and indeed prohibits the importation of alcohol into a state in violation of the laws therein (in one of the only places in the constitution places a bar on individual's actions).

Why try to go around state legislature's when, in effect, you haven't gone around them?

You're looking at this through a modern central-state-is-all perspective that didn't exist in the US yet. Congress couldn't force the states to all be 'wet'. But (in this theory) they wanted to get liquor tax from many of the states. If they allowed the legislatures to weigh in, the dry states could keep the entire country dry (remember that the status quo is keeping the prohibition amendment and that the status quo can be kept in place by 1/4 of the states refusing to sign the repeal amendment). The fact that SOME states will remain dry has nothing to do with the fact that Congress (in this theory) needed a way to get rid of the prohibition amendment without letting the dry states block it.

hairshirthedonist,

"My wallet does tend to be much lighter after stumbling out of Monk's."

Yes, but your head is also lighter after consuming the fine Belgian beers (which are unlikely to be cheap at any US restaurant). Speaking of Belgian restaurants in Philly, I recently tried Zot, which was most excellent.

I agree with a couple people above that it I think it's perfectly likely that Congress saw repealing prohibition as a way to rake in some extra tax revenue, but that the article puts far too much emphasis on it.
Sebastian, you have the laudable instinct to be skeptical of things that fit your preconceptions. I'd qualify that to some extent; be skeptical of relying solely on ideas that fit your preconceptions.

I second Ugh's view -- there is no basis for ascribing this social phenomena purely or even primarily to income tax policy.

Here is a good web site OSU history dept site for the history of this phenomena, with many links. Prohibition was the result of Christian Temperance and other movements that had been advocating against alcohol abuse for decades, had succeeded on a local level and finally broke through nationally. We are used to a more regulated environment regarding alcohol -- that environment did not exist pre-Prohibition. Alcohol was sold everywhere and largely unregulated. Prohibition was the reaction to that.

Think of the Prohibition advocates as the Drug War and Just Say No advocates of their era -- that is a good analogy as to how they thought of themselves. There is one important exception, though. Prohibition did not criminalize the purchase or use of alcohol.

The key argument against Prohibition was that it was overkill and did not prevent drinking anyway. Another was that it resulted in enormous crime and graft -- bigger problems than the pre-Prohibition drinking. Without question, one of the arguments made was the loss of revenue, as it is with the suggestion today that we regulate and tax drug use rather than try to ban it outright.

Prohibition became politically untenable because it did not work and created greater social ills. Its repeal ushered in the more modern environment of strict alcohol regulation. One of the little footnotes to the repeal is that the 21st amendment allowed local control of alcohol to continue -- Prohibition was still legal on a local level. Nonetheless, it did not survive except in only a few areas.

Sebastian - that's a good point.

I should have put greater emphasis on the last point. If repeal was primarily about re-establishing tax revenues, the 21st amendment would not have explicitly authorized alcohol sales to be banned by the states. Otherwise the repeal could have been meaningless as a tax revenue device if a large enough number of states had continued the policy anyway.

dmb: "did not prevent drinking anyway." -- As I understand it, it did cause drinking to fall quite significantly. It didn't end drinking, of course, but no one expected that anything other than magic could accomplish that. The problem wasn't that it didn't achieve its intended result to a pretty significant degree; it was that it had unintended consequences.

"Otherwise the repeal could have been meaningless as a tax revenue device if a large enough number of states had continued the policy anyway."

But that is overly hypothetical: everyone knew that a majority of the states were going to allow drinking. But they had to be certain to avoid having repeal blocked by 1/4 of the states.

You know, my native country, Finland, was the only other Western country to have Prohibition (1919-1932). Here, the Prohibition actually increased the alcohol consumption, and decreased the overall obedience to the law.

Here, all the liberalizing changes to the alcohol policy have left the "dry" parts of the country the ability to opt out of the changes, even though we have otherwise centralized government. (Individual municipalities still have the power to end all forms of sale of alcohol within their borders, if they wish. None does.) This has been simply to make the changes less repulsive for those who oppose them. So, I would believe that the case is same also in the US.

Hilzoy:

dmb: "did not prevent drinking anyway." -- As I understand it, it did cause drinking to fall quite significantly.

Very true. Here is a chart I came across documenting per capita usage over the last 150 years.

Sebastian:

But that is overly hypothetical: everyone knew that a majority of the states were going to allow drinking.

They knew this because Prohibition had become very unpopular in most places in the country.

So what was the impetus for repeal? Taxes or its broad unpopularity? Saying that taxes was the primary motivation rather than the broad unpopularity of Prohibition does not seem very logical.

Well I'm skeptical of anything that fits Sebastian's preconceptions too, but this works for me, at least in the sense of the drop in income tax revenue being either the deciding factor for the successful repeal, or closely related.

I don't see anybody arguing that prohibition was broadly popular when it was enacted, nor that it gained any popularity between enactment and repeal. And yet repeal had been successfully postponed during that period.

Whether the repeal movement was a "sullen and hopeless expression of minority discontent" in the early to mid 20s seems relevant, but not decisive. It's certainly possible for a policy to be quite popular without having a strong movement behind it. Especially if, as the article argues, there was no particular economic basis for such a movement. Which there clearly wasn't. If the movement gained steam at approximately the same time that income tax revenue dropped precipitously, it's not unreasonable to look for economic explanations for its success.

There's no doubt that prohibition substantially increased the price and difficulty of alcohol consumption, along with creating legal jeopardy for producers. So perhaps the repeal movement gained steam because during the depression an increasing part of the electorate could no longer afford to drown their sorrows as they had when the economy was in better shape. Or, alternatively, because the depression reduced the special political influence of either the syndicates or the temperance societies, or both, to the extent that mere popularity made repeal possible. Or maybe congress just concluded that they needed the tax revenue...

BTW I would bet that laudanum use, and probably marijuana as well, went up as alcohol use went down.

Florence King writes in Confessions of a Failed Southern Lady and Southern Ladies and Gentlemen that in some dry states they passed a tax on "black market hooch" - how this was possible, or if it ever happened, I don't know

I think this is true. I seem to recall that when Mississippi was dry the official charged with collecting the tax was one of the highest paid public officials in the country, because he received a commission on his collections.

Such a tax would not be that unusual. Income tax is due, after all, even on income from illegal activities (see Capone, Al).

Speaking of prohibition, I'm listening to a caller (owner of a cigar store) on the Kojo Nnamdi Show ranting about how SCHIP would create a $10 tax on each cigar -- information he got from Rush Limbaugh.

Apparently the reality is that what might be raised is a cap on cigar taxes. Currently the cap is a ludicrously low 4.8 cents per cigar, even if the cigar costs $50. If the cap were raised to $10 as suggested, then of course the actual tax would be $10 only on very expensive cigars. This is being squawked about as a "20,000% tax increase". By that logic, removing the cap entirely would be an infinite tax increase.

The process of determining cause and effect in history can lead to all kinds of creative thinkinng. For example:

Prior to Prohibition women were disenfranchised and, in most states, unable to get divorced while everywhere at an extreme disadvntage in the job market. Marriage to a drunk was a life sentence in hell. Women were a huge part of the political movement leading up to the passage of the 18th Amendment. Motives which were couched in religious terms could be seen in hindsight as a sort of proto-feminism: powerless women seeking to excert themselves in the political arena to protect themsleves and their children from the demon rum's effect on their husbands.

A few years later the 20th is passed and alchohol is legal again. What happened?

The 19th Amendment happened. Women got the vote. Suddenly a world of possiblities openned up:divorce, access to birth control, access to jobs and education, all obtainable eventually throuugh the political process! No need to ban alchohol if a women can kick the drunk out of her house.

This is mostly overstatement, of course, but I made it up to show how something that is a little bit true,, or a little part of the truth, can be developed into a New Interpetation of History.

In other words I think it is likely thhat taxes had something to do with the repeal of Prohibition, but crime had somethinng to do with it , too. It's also possible tht thhe US just had a rare outbreak of common sense.

Wonkie, I actually thought about the impact of the women's suffrage amendment, but I couldn't make for an interesting link. I'm half-convinced by yours. (And as I'm only half-convinced by the tax explanation, that is pretty good).

Sebastian,

"But the popular will turned against prohibition almost immediately. Congress was in no rush to worry about that in the 1920s."

You do realize that you are directly contradicting the article you cited:

"But contrary to popular belief, the 1920s witnessed virtually no sympathy for ending Prohibition. Neither citizens nor politicians concluded from the obvious failure of Prohibition that it should end.

As historian Norman Clark reports:

"Before 1930 few people called for outright repeal of the (18th) Amendment. No amendment had ever been repealed, and it was clear that few Americans were moved to political action yet by the partial successes or failures of the Eighteenth. ... The repeal movement, which since the early 1920s had been a sullen and hopeless expression of minority discontent, astounded even its most dedicated supporters when it suddenly gained political momentum.""

I suspect you are closer to correct than the article is -- Prohibition was unpopular, but not enough so during the Roaring '20's to lead to a repeal. It was only after the Great Depression started that the movement to repeal itgained ground. Whether the reduced tax revenue or the greater crime once people were out of work was the primary cause is something beyond my research capacity, although it would make a nice term paper for a Cliometrics class.

The history of prohibition is both long and convoluted. The hypothesis that 21st amendment was passed to help raise taxes has been around since it, the amendment, was ratified so there is nothing new here. The argument that the movement to repeal prohibition was weak or nonexistent in the 20s has also been around for a long time.

That the repeal movement was ineffectual is not something I'd argue with. It was. The Roaring 20s is a period of American history that is well and deservedly noted for its rampant hypocrisy. This was the era when the phase "Drink wet, vote dry" first became vogue, so that people would patronize bootleggers while still "publicly" supporting prohibition should not be used as "proof" of governmental nefariousness.

And we again see all the negative unintended consequences with drug prohibition. If the tax revenue thesis is correct, perhaps we can expect to see legal, highly taxed marijuana in my lifetime.

And we again see all the negative unintended consequences with drug prohibition. If the tax revenue thesis is correct, perhaps we can expect to see legal, highly taxed marijuana in my lifetime.

hilzoy: "As I understand it, it did cause drinking to fall quite significantly."

Well, yes and no. It dropped at first, then rebounded. Here's an interesting link on the topic.

"And we again see all the negative unintended consequences with drug prohibition."

An unintended consequence of prohibition was the homocide rate, which increased "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 1940s."

(also from the Cato article linked above)

Same thing will happen if you end the War On Drugs (lotsa luck on that one) -- the murder rate would drop significantly, the prisons would empty, and a lot of cops, judges, prison guards, wardens, parole officers, and snitches would be off the government payroll.

This completely fits with my preconceived notions about how government power (and its general unwillingness to relinquish it) works, so I'm a bit skeptical.

*Sniffle* I love you, Mr. Holsclaw.

This shows that the Amendment was very important to Congress and not nearly as important to the states. This cuts at least a little bit against the 'crime' explanation, since the crime associated with prohibition certainly impacted state-level police concerns.

I'm not sure I buy this. Local and state law enforcement / government quite frequently reaped a share of the benefits from said criminal activities, so I would be willing to attribute resistance to something other than an abiding respect for Prohibition's principles.

With no serious research on the matter (hey, it's the Internets, after all), my gut suggests that a combination of Holsclaw's find with wonkie's theorizing would make for a plausible explanation of why things came to a head when they did. As everyone's noted, we need to account both for newly-focused popular will and initial action by a usually-lethargic Congress.

And hooray for government recreational drug stores!

"Same thing will happen if you end the War On Drugs (lotsa luck on that one) -- the murder rate would drop significantly, the prisons would empty, and a lot of cops, judges, prison guards, wardens, parole officers, and snitches would be off the government payroll."

I'd just like to speak up strongly for all that, and, oh, speak up again. As in, gosh, that would save our government and society a huge amount of society, and help us all out immensely.

"As in, gosh, that would save our government and society a huge amount of society, and help us all out immensely."

Crap. A huge amount of "money," damnit.

Nouns. I actually can occasionally tell them apart.

Prohibition worked. Ok? I'm not challenging your thesis about tax revenues (which sounds plausible), or that Prohibition was a glorious boon to organized crime. Perhaps Prohibition was indeed a bad idea -- in an era (today) where most people drink, it's certainly going to be an unpopular one. But on its own terms, Prohibition succeeded, and improved millions of lives.

The task of Prohibition was to reduce drinking; it did. The two most respected estimates of drinking in America over history are from

1. William Rorabaugh's the Alcoholic Republic -- which shows that even when Prohibition was repealed, alcohol consumption stayed down 70% for years, although by now it's back above where it was in 1900. Rorabaugh goes to a lot of effort as well to estimate alcohol consumption via secondary factors (the ingredients used to make it), and shows alcohol consumption down somewhat further than that during actual Prohibition; and

2. Alcoholic Epidemiological Data System, which shows even larger success from, and for awhile after, Prohibition.

Prohibition, to a large extent, was a progressive reform meant to save poor and working-class families from the absolutely typical pattern in which the man would go to work, the man would get paid, and then the man would blow the paycheck on liquor on the way home, leaving the wife and kids in poverty. Call it paternalistic if you like, but the prohibitionists argued that the husbands, as well as the wives and kids, would be better off if given a break from addiction. The evidence says they were right.

Who did NOT reduce drinking? The rich and connected. Who did the news media hang out with? The rich and connected. So we learned that Prohibition failed. Duh.

As for the War on Drugs: I'm a teacher. I work with teenagers, I was a teenager in accessible memory, and Just Say No, despite its reputation among adults, is not a universal joke to teens. Do you see any inherent-to-the-drug reason why marijuana use isn't as universal as drinking, or why cocaine couldn't be at least moderately mainstreamed again with RJR Nabisco's advertising dollars behind it? I don't. They're against the law, and that keeps the use down. For better or worse.

Voxpoptart, of course Prohibition was a success if you ignore all its negative effects, and the same can be said about the war on drugs if you ignore all its negatives. I don't think it's news to most of us that alcohol consumption went down during Prohibition, and that's not what the argument is about.

I don't think "Just Say No", whether it's silly or not, is really part of the war on drugs. That's education. When people talk about ending the war on drugs, they're talking about the system that treats drugs as a criminal rather than a medical problem and has resulted in a huge increase in our prison system and destroyed millions of lives -- a system that has now produced the obscenity of a private prison industry lobbying to make sure more Americans go to prison and stay there longer, to increase its profits. When you set up a financial incentive to imprison people, bad things happen.

Do you see any inherent-to-the-drug reason why marijuana use is more dangerous than drinking, or why it makes sense to have such a large proportion of our population locked up because of it?

As for the War on Drugs: I'm a teacher. I work with teenagers, I was a teenager in accessible memory, and Just Say No, despite its reputation among adults, is not a universal joke to teens.

By 'Just Say No' do you mean 'choosing to abstain from illicit substances' or are you referring to the ridiculous propaganda campaign in which soft drugs are portrayed as an existential threat to civil society?

Because if you mean the latter, I'd have to say that your teenage peer group was way more 'ABC After School Special' than mine.

Even my sXe (Straight Edge) acquaintances recognize the folly of the War on (Some) Drugs.

Do you see any inherent-to-the-drug reason why marijuana use isn't as universal as drinking, or why cocaine couldn't be at least moderately mainstreamed again with RJR Nabisco's advertising dollars behind it? I don't.

For anyone to have an informed opinion about this, we'd need data from places with cultures comparable to the US and where marijuana use is at least decriminalized if not outright legalized. Anyone have any data that might be useful?

No, Phil, as with the issue of national heath care, the United States is totally unlike any other country on the planet, so we can't make any comparisons or draw any conclusions from any other countries' experiences.

I don't think it's news to most of us that alcohol consumption went down during Prohibition, and that's not what the argument is about

It went _way_ down, and yes, in my experience, that's news. So is the class issue behind it: that Prohibition was an anti-poverty measure, and one which had a lot of success.

I teach history, to be specific; even the textbooks insist, in their flat brooking-no-controversy way, that drinking didn't go down during Prohibition. (The textbooks do not mention the intent to fight working-class poverty behind the law either.) Prohibition is repeatedly used to bolster equally silly arguments like that if abortion were banned (which, by the way, I'd oppose), there'd be just as many abortions, only illegal ones, or that gun control doesn't reduce gun use.

OF COURSE the reduction in alcohol use isn't the only issue in determining if Prohibition was a good idea. But it's AN issue, and people, including Sebastian in this post, act as if they don't know that.

I don't think "Just Say No", whether it's silly or not, is really part of the war on drugs. That's education

I'll agree with you there, and retract my wording. The education "please choose not to" approach works surprisingly well, was all I'm saying - and it wouldn't work nearly as well if it was up against billboards full of hot-looking models advertising their preferred brand of pot or cocaine.

Do you see any inherent-to-the-drug reason why marijuana use is more dangerous than drinking, or why it makes sense to have such a large proportion of our population locked up because of it?

I didn't want to go into this during my original post, since it was beside the point, but here, for the record, is my opinion about alcohol, marijuana, and harder drugs:

1. None of them should be legal for corporate, profit-driven sale.

2. All of them should be legal for sale, modeled after the Soviet Union, which showed the world how to run a sluggish and non-growing market: they should be cheap, moderately rationed, and sold in dingy, unpleasant government-run stores that are understaffed so as to produce long lines.

3. Jail sentences, albeit fairly short ones, should remain for people dealing alcohol and other drugs for profit.

Whether or not you agree with me on any of this - you probably don't, and that's fine - Prohibition was a success on its own terms. The truth of this deserves to be reflected in any number of debates.

The comments to this entry are closed.

Blog powered by Typepad