Economic And Social Effects Of Prohibition Essay

, Research Paper

There are many ways in which prohibition of alcohol consumption in the United States of

America, damaged the very economic and social aspects of American culture, that it was

designed to heal.

?Prohibition did not achieve its goals. Instead, it added to the problems it was intended to

solve.? On 16th January 1920, one of the most common personal habits and customs of

American society came to a halt. The eighteenth amendment was implemented, making all

importing, exporting, transporting, selling and manufacturing of intoxicating liquors absolutely

prohibited. This law was created in the hope of achieving the reduction of alcohol consumption,

which in turn would reduce: crime, poverty, death rates, and improve both the economy, and the

quality of life for all Americans. These goals were far from achieved. The prohibition

amendment of the 1920’s was ineffective because it was unenforceable. Instead, it caused

various social problems such as: the explosive growth of organized crime, increased liquor

consumption, massive murder rates and corruption among city officials. Prohibition also hurt the

economy because the government wasn?t collecting taxes on the multi-billion dollar a year


One of the main reasons that prohibition failed, was because it was difficult to control

the mass flow of illegal liquor from various countries, mainly Canada. ?Bootleggers smuggled

liquor from oversees and Canada, stole it from government warehouses, and produced their

own.? The newly established Federal Prohibition Bureau had only 1,550 agents, and ?with

18,700 miles of vast and virtually unpoliceable coastline, it was clearly impossible to prevent

immense quantities of liquor from entering the country.? Not even 5% of smuggled liquor was

ever actually captured and seized from the hands of the bootleggers. Bootlegging had become a

very competitive and lucrative market with the adaptation of prohibition. This illegal

underground economy fell into the hands of organized gangs who over powered most of the

authorities. Most of these gangsters, secured their businesses by bribing an immense number of

city officials. Mainly government agents and people with high political status such as: Mayors,

Judges, Police Chiefs, Senators and Governors, found their names on gangsters payroll.

To some surprise, the consumption of liquor in the years before prohibition, was actually

very lower then that of the years throughout prohibition. As a result of this new law, a new social

problem arose. ?Seldom has law been more flagrantly violated. Not only did Americans continue

to manufacture, barter, and possess alcohol; they drank more of it.? Americans who supported

prohibition, argued that if drinking alcohol was illegal, the public would recognize and respect

the law, and in turn, would give it up. During the start of prohibition, it appeared as though it

was working. But, what was really going on, was that since the transportation and production

was not allowed, bootleggers had to find ways to do it without being caught. The price of beer

rose, because it had to be transported in large barrels, which was more difficult. As a result,

people started drinking more potent hard liquor. It took less to get drunk, therefore it was easier

to transport, thus, it was cheaper. Americans would drink this potent liquor and get drunk a lot

faster, for less money. As a downfall, however, the liquor had no standards. The rate of alcohol

related deaths due to poisoning drastically increased from 1,064 in 1920, to 4,154 in 1925.

One of the biggest outcomes of prohibition was the development of organized crime.

Because liquor was no longer legally available, the public turned to gangsters who took on the

bootlegging industry and supplied them with liquor. Because the industry was so immensely

profitable, more gangs participated. As a result of the money involved in the bootlegging

industry, there was much rival between gangs. ?The profit motive caused over four hundred gang

related murders a year in Chicago alone.? The most infamous gangster of all time, was Al

Capone. He ran his business out of Chicago. It is estimated that he alone, pulled in over 100

million dollars a year, as a result of prohibition. These numbers could never be confirmed for

sure, because he didn?t report his earnings to the tax man. Capone dominated the prostitution

and protection business as well as bootlegging. Any rival gang who was seen as a threat, was

simply wiped out. Capone had a gang of about 2,000 thugs, and payed off everyone from the

chief of police, to federal agents and judges. Everybody was on Capone?s payroll. There were

also illegal speak-easies which replaced saloons after the start of prohibition. By 1925, there

were over 100,000 speak-easies operating out of New York City alone. Alcohol had become

easier to acquire during prohibition, then before prohibition. The bootlegging business was so

immense that customers could easily obtain alcohol by simply walking down almost any street.

The speak-easies that replaced the saloons were hidden in basements, office buildings, and

anywhere that could be found. They admitted only those with membership cards, and had the

most modern alarm systems to avoid being shut down. ?There were twice as many speak-easies

in Rochester, New York, as saloons closed by Prohibition.? Another factor that proves the

increase of alcohol consumption is the increase in deaths and drunkenness. The drop in alcohol

related deaths before prohibition quickly rose during prohibition. Arrests for drunkenness and

disorderly conduct increased 41 percent, while arrests for drunk driving increased 81 percent

during prohibition.

There were several economic problems that grew out of prohibition. The main one, was

the fact that the government wasn?t taxing this billion dollar a year industry. Every penny the

bootlegger made, went into the pockets of themselves, bribed city officials, and their own thugs.

The American Government never saw one dollar of it. Instead, they were busy at work spending

tax payers money on programs to enforce this law. A new task force called the Federal

Prohibition Bureau was established. It was the job of these 1,500 federal officers to enforce the

prohibition law. Many of those officers found themselves in the midst of the exchange of dirty

money between the bootleggers and themselves. Tax dollars were also spent on prosecuting

bootleggers who got captured. Millions of dollars annually were spent convicting and keeping

the prisoners in jails. Other economic problems were that citizens found themselves ?drinking

away? their pay cheques. These economic problems resulted in the government not taking in as

much money as they could have, and spending money in areas that could have been avoided, if

prohibition hadn?t existed in the first place.

It was apparent that Prohibition didn?t achieve its goals, instead, it added to the existing

economic and social problems, as well as creating new problems that would be prominent in

today?s society. Organized crime grew into an empire, disrespect for the law grew, the per capita

consumption of alcohol increased dramatically, city officials fell to gangsters, and the

government lost money. It is obvious that prohibition was a miserable failure from all points of

view. Reasonable measures were not taken to enforce the laws, so they were practically ignored.


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