The Economics of Prohibition
Index
ABC News poll, 76n
Abel, C. T, 107
Abel, Ernest L., 65
abolitionist movement, 43, 46, 48
absenteeism of employees, impact of alcohol consumption on, 25–27, 26 (table), 28–29, 29 (table)
abstinence pledges, 44–45
addiction: and criminal risk-taking with price changes, 117, 119 (fig.), 119–20; and deterrent effect of punishment, 31; discovery of, 4, 58–59; and elasticity of demand with price changes, 117, 118 (figs.); extent of, 60n; and individual rationality, 10, 31, 35–38; infeasibility of prohibition as deterrent to, 144; and maintenance programs, 33, 34n, 64, 147–48; to patent medicines, 61, 141; and potency, 91; rehabilitation of, 31n, 33; as side-effect of war, 5, 57, 62, 64–65; solutions to, 152; utility of, 35–36, 37, 38
ad valorem tax: effect on product attributes, 93–95; prohibition as, 97, 98–99
advertising, and market information, 78, 151
Afghanistan, 136n
Alchian, Armen A., 93, 94 (table)
alcohol: association of use with criminal behavior, 111, 115, 124–25; consumption patterns, 13–14, 20–21, 28, 29, 101–3, 103 (table), 104 (table), 124–25, 126, 145n; definition as poison, 52n; economic losses, 23–29; “grip,” 17–18; health risks, 73n, 104–5; home production, 21; increased potency under prohibition, 89, 90, 103–5; medicinal use, 52n; “normal use,” 18; potency absent prohibition, 91; regulation of markets, 40, 41–43, 51, 54–55, 69, 121–22, 140, 149; substitutes, 20–21, 28, 57–58, 60, 61n, 67; substitution for other drugs, 144n.3; utility of consumption, 36
alcohol, prohibition of, 86; association with crime and corruption, 112, 122–24, 126, 127, 133–35; changes in relative prices, 101–2, 102 (table); contemporary efforts to reintroduce, 39; costs, 23, 25, 27, 29, 100 (table), 100–101; creation of profit opportunities, 117, 123; demand relative to price differences, 102–3, 103 (table); discussion in economics texts, 10; dismissal of honest agents, 81–82; economists as defenders, 9, 11–23; effect on marijuana market, 67; enactment, 50, 55, 65; enforcement, 19, 20, 21; and evolutionary competition, 13–15; failure, 4–5, 9–10, 21n, 23; growth and consolidation of movement, 50–56; intensification of criminal organization, 125–26; motivations, 111; origins, 43–47, 68–69; politicization of movement, 47–50; precursor of other prohibition movements, 39; private vs. public, 19–20, 25; repeal, 21n, 23, 66–67, 91, 112, 124, 139, 149; scientific arguments, 53–54; social/economic benefits, 16, 20, 21, 24, 26–27; spread of opium addiction, 57–58, 61n; statutory definitions, 96
Alcoholics Anonymous, 44, 149
alcohol industry: corruption of political process by, 55, 111, 126–27; organization of, for self-protection, 55, 126–27; rent seeking by competitors of, 52, 56
“alcohol price index,” 101, 102 (table), 103
Allen, William R., 93, 94 (table)
AMA. See American Medical Association (AMA)
American Association of Pharmaceutical Chemists, 63
American Economic Association, 11–12, 13, 15, 17n.8
American Medical Association (AMA): antialcohol resolution, 52n, 53n, 59; establishment of monopoly by, 69; and narcotics control, 59, 61, 63
American Pharmaceutical Association (APhA), 59, 61, 62, 63
American Revolution, 43n, 69
American Temperance Society, 43
American Woman Suffrage Association, 48
amphetamines, health risks of, 73n
anarchism vs. socialism, 17
Anderson, Gary M., 55
Anderson, Harry, 135
Anslinger, Harry, 65, 66–67
“Anslinger hypothesis” of marijuana prohibition, 65–66, 67, 68
Anthony, Susan B., 48
Anti-Saloon League, 4, 47, 48, 49, 50–52
APhA. See American Pharmaceutical Association (APhA)
Arthur D. Little Inc., 109n.10
Ashley,—, 136
Asia, narcotics use in, 57
Asia, southeast, political corruption of, 136n
aspirin, 57
Association against the Prohibition Amendment, 27
Association of Retail Druggists, 59
Astor, Gerald, 133
attributes of goods: consumer evaluation of, 92–93; effects of taxation on, 93–96; enhancement of utility by, 78; potency as, 92, 93; produced by bureaucrats, 97–98
Australian ballot, 53, 55
Austrian economics, 6, 10, 38, 77–78
automobiles: import quotas and tariffs on, 95; operation of, after alcohol consumption, 20; theft of, 124, 125
Baden, John, 129, 130, 132
Bahamas, the, 136n
Banfield, Edward, 128
barbiturates: health risks of, 73n; as marijuana substitute, 108
Barnett, Randy, 143
Barthold, Thomas A., 36, 37nn.30, 32
Barzel, Yoram, 93–95
Bassett, John Spenser, 42
Beccaria-Bonesana, Cesare, 113
Becker, Gary S., 6, 133; attack on prohibition, 10; theory of crime, 115–16, 130; theory of rational addict, 10, 35–36, 37–38
Becker, Howard, 65–66
Beecher, Lyman, 43
beer: commerce in, 43; consumption patterns of, 102, 103 & table, 104 (table); disassociation of hard liquor from, 55; prices of, relative to those of spirits, 101–2, 102 (table); subsidies to, 41; view of temperance movement toward, 44, 45
Behr, Roy L., 48
Bennett, William, 9
Benson, Bruce L., 40, 84, 120, 128–29, 130, 132
Bentham, Jeremy, 113–14
Bidinotto, Robert James, 125
bingeing, 35, 37
blackmail, of enforcement agents, 131
black markets: under alcohol prohibition, 29; corruption of officials by, 130–32, 137–38; creation of, by prohibition, 82–83, 89, 141–42; criminal violence in, 112, 120; and decriminalized drug markets, 149; industry standards in, 89; organization of, 125–26; product adulteration in, 105; variation of drug potency in, 91
blacks: bigotry of prohibitionists against, 51, 66, 140; fear of cocaine use by, 60
Blake, John B., 69
Blaug, Mark, 9
Blocker, Jack S., 50, 51
blue laws, 54
Bolivia, 136n
Bonger, W. A., 114
Bonnie, Richard J., 66
Boorstin, Daniel J., 41
Borcherding, T. E., 93n
Bork, Robert, 116
Boston, Massachusetts, 25n, 42
Bracey, Dorothy H., 137
Brandstatter, A. F., 133
brandy: medicinal use of, 52n; relative prices of, 102 (table)
Brazil, 136n
Brecher, Edward M., 144
bribery: as consequence of drug producers’ capital investments, 132; as consequence of prohibition-created profit opportunities, 83, 131–32, 135–36; as method of public finance, 137; reduction of, by prohibition, 127; by saloonkeepers, 54
Brooks, J. E., 40
Brown, George F., 120
Bryan, William Jennings, 50
Bryce, James, 53
Buchanan, James M., 30, 84, 85, 87–88, 137
Buckley, William F., Jr., 10
bureaucracies: attributes of goods produced by, 97–98; entrepreneurial role of, 65–66, 67, 69; growth of, 84–85; inaccessibility of discovery process to, 80–82, 83, 141; profit opportunities of, 83, 130–32, 135–36; suppression of discovery process by, 80, 82, 83, 141
Bureau of Internal Revenue, 64
Bureau of Justice Statistics, 106n, 108–9
Bureau of Prohibition, 26–27; corruption of, 112; enforcement budget of, 100 (table), 101
burglary: rates absent prohibition, 124; rates under prohibition, 120, 125
Burns, Arthur, 27n.14
business: and narcotics control, 56–57, 59–60, 61–62, 63–64; organization of, against alcohol industry, 52; Progressive view of, 53; support by, for marijuana prohibition, 68. See also entrepreneurs
business-cycle theory of crime, 123, 124
Byrne, Frank L., 46, 47
caffeine: control of use in medicinal compounds, 63; potency absent prohibition, 91
Calkins, Dr.—, 58
Cameron, Samuel, 116
Canada, policy toward alcohol, 20
cannabis. See marijuana (cannabis)
capitalism, 120–21. See also black markets; business; development, economic; markets
Capone, Al, 117
Carter, Jimmy, 139n
Catholics, bigotry of prohibitionists against, 51
Cave, Jonathan A. K., 82–83, 90
chemical industry, support for marijuana prohibition, 68
Chicago, Illinois, 133
Chile, 136
China: opium trade with, 62; U.S. relations with, 57, 62, 65
Chinese, the: discrimination against, 62; use of opium by, 60
chloral hydrate, 57, 62, 64
choice, subjectivity of, 77
Christian Science Monitor, 24
cirrhosis of the liver, 105n
Civilian Conservation Corps (CCC), 124
civil liberties: and corruption control, 137; and quarantine of heroin addicts, 147n.6
Civil Service, reorganization of prohibition enforcement under, 134
Civil War, 4, 40, 43, 48, 57, 58, 69
Clague, Christopher, 34n, 147 “The Clandestine Distribution of Heroin: Its Discovery and Suppression” (Rottenberg), 90
Clark, John Bates, 12, 14
Coast Guard, U.S., 100 (table), 101, 106
Coats, A. W., 12–13
Coca-Cola, 60, 89–90
Coca-Cola Company, 52
cocaine, 105; association of use with criminal behavior, 60, 111; in combination drugs, 90; commercial use, 60, 89–90; consumption patterns, 145, 146n; control of use in medicinal compounds, 62, 64; “cutting” of, 96n; discovery, 57; health risks, 73n, 91, 110n; increased potency under prohibition, 89–90; as marijuana substitute, 108–9
cocaine, prohibition of, 3, 149; enactment of, 60; motivations for, 111
coca leaves, use of, 57
Coffey, Thomas, 81–82
Colombia, 112, 136n
competition: evolutionary, 13–15; multidimensional view of, 77–78. See also monopoly; rent seeking
compulsive behavior, and addiction, 36
conservatives, and legalization, 10
conspicuous consumption, 15n
Cook, Philip J., 124
corruption: acceleration by growth in government, 130, 132; activities, 129–30; association with prohibition, 111–12, 127, 133–36, 142, 143; association with saloons, 54–55; benefits, 137; causes, 129; consequence of illegal markets, 30; consequence of prohibition-created profit opportunities, 83, 130–32, 135–36; consequence of social controls, 133; costs, 136–38; decriminalized drug market, 149; definitions, 128–29; distinguished from rent seeking, 6, 128; elimination, 129, 133, 151; federal convictions/indictments, 127, 128 (fig.), 136; functionality, 127–28, 129; function of risk of capture, 131; incentives, 130; marginal cost of acts, 132; prohibition as remedy, 111, 112, 113, 126–27; similarity to rent seeking, 132
Corrupt Practices Act, 51, 55
cotton, as hemp substitute, 68
Council on National Defense, 18
courts: corruption of, 130; criminological philosophy of, 125; sentencing discretion of, 98, 99
Courtwright, David T., 57
crack cocaine, 90
Crawford, Gordon B., 90
crime: association with drug use, 111, 112, 114, 115, 124–25; association with prohibition, 111–12, 122–24, 125, 126, 137–38, 142, 143; association with saloon, 54–55; changes in judicial philosophy, 125; decriminalized drug market, 149; drug use as cause, 112–13, 115; economic theory, 113–14, 115–16, 120, 130; elimination in free market, 151; fluctuation with business cycles, 123, 124; function of drug prices, 31, 33, 77, 117, 119 (fig.), 119–20; growth under alcohol prohibition, 29; prohibition as remedy, 16, 111, 112, 113; prohibition-created profit opportunities, 116–17, 123, 142; protest against temperance movement, 121–22; relation to economic development, 114, 115, 120–21, 122, 123, 126; risk-taking as function of enforcement levels, 117, 119 (fig.), 119–20; sociological theories, 114–15, 120–21; time-allocation model, 116
crime, organized: as manifestation of prohibition, 125–26; violence of, 112, 125
Croce, Benedetto, 35, 38
Cuba, 136
Customs Service, U.S., 106
DEA. See Drug Enforcement Administration (DEA)
death penalty, restoration of, 115–16
Declaration of Independence, 43
decriminalization: as alternative to prohibition, 3–4, 139n, 139–40, 146–47, 148–49; support of economists for, 10
demand: differentiation in, according to drug potency, 91; differentiation in, according to prices, 102–3, 103 (table), 108–9, 109–10; as function of prices, 32, 33, 36, 37, 74, 91, 101–2, 117, 118 (figs.), 144, 145, 148; as function of product attributes, 92–93; reduction of, as benefit of prohibition, 144–45
democracy: corruption of, 55, 111, 126–27; resolution of conflicts by, 87–88
Democratic party, 50, 51
designer [synthetic] drugs, 109
desire vs. attainment of satisfaction, 22
detection: avoidance of, by entrepreneurs, 131; corruption as function of probability of, 130, 132; of drug producers’ capital equipment, 132; official dismissals as result of, 134
development, economic: as cause of crime, 115, 120–21; and free markets, 152; as remedy for crime, 114, 120, 121, 122, 123, 126; and standards of leisure, 7
Dickson, Donald T., 66
discovery process: solution of social problems through, 77, 83, 150; stifled, 82, 141, 143; undiscovered, 79–80, 140–41; unsimulated, 80–82, 141; wholly superfluous, 82–83, 85, 89, 141–42
discrimination, as side effect of prohibition, 39–40, 60, 62, 66, 67–68, 140
disease, addiction as, 37n.32
District of Columbia Pharmacy Act (1906), 61, 62
Dolan, Edwin G., 11
Dorfman, Joseph, 27n.14
Dow, Neal, 46, 47
drug abuse: as antecedent of prohibition, 57–59; decriminalization as solution to, 3–4; permanence of, 76n; personal responsibility for, 152; risks of, 72&n, 110; as side-effect of war, 5, 57, 62, 64–65, 69, 152
Drug Abuse Warning Network, 110n
Drug Enforcement Administration (DEA), 106
drugs, free markets in, 149–53. See also decriminalization; legalization; potency; prohibition
drug use: associated with crime, 111, 112, 114, 115, 124–25; as cause of crime, 112–13, 115; as leisure, 7; personal responsibility for, 151, 152
Duchaine, Nina, 127
E. I. du Pont de Nemours Company, 68
Eastman, Max, 86
economic conditions, as factor in crime, 113–14, 115–16
economic development. See development, economic
economic planning, consequences of, 85–86
The Economic Results of Prohibition (Warburton), 27
economists: as defenders of prohibition, 9, 10, 11–23; leadership of legalization movement by, 9–11
economy, impact of alcohol consumption on, 23–29
Edgeworth, Francis Yisdro, 17
education, as remedy for intemperance, 17–18, 44, 45, 51
Ehrlich, Isaac, 115–16
Eighteenth [Prohibition] Amendment, U.S. Constitution, 4–5, 19, 20, 64; passage of, 18–19; repeal of, 21n, 23, 66–67, 91, 112, 124, 139, 149
Einstein, Izzy, 81–82
Ekelund, Robert B., 11
Eldridge, W.B., 60
Elsohly, M. A., 107
Ely, Richard T., 11–12
employers: issuance of alcohol rations by, 19, 41, 42; prohibition by, 19–20, 25, 152
Encyclopedia of the Social Sciences, 27
enforcement: allocation of resources, 73, 75; compensation of agents, 129, 133; concentration at local level, 67; consequences, 29; corruption as characteristic, 128; corruption, 112, 127, 130–38, 142; costs, 27, 31, 34, 100 (table), 100–101, 105–6, 106 (fig.), 143, 151; dismissal of honest agents, 81–82; drug substitutions as consequence, 144, 145; effects on drug potency, 90, 96–99, 106–8, 108 (fig.), 110, 132, 142; effects on prices, 82–83, 97, 101, 117, 119, 120, 131, 142; key to prohibition’s success, 19, 20, 21; methods, 46; neighborhood distribution channels, 32; obstacles, 47; optimal level, 76 (fig.), 76–77; risk of capture, 96–99, 100, 101, 106–8, 108 (fig.), 110, 116, 117, 119–20, 131, 132, 142; selective, 83, 131; “shortages,” 85; tradeoffs, 30
Engels, Frederick, 113
England. See Great Britain
entrepreneurs: bureaucrats as, 65–66, 67, 69; discovery by, 81; reaction to prohibition-created profit opportunities, 82–83, 89, 131–32; search for profits, 77–78, 80, 81, 93, 150. See also business
environment: as factor in crime, 114–15; prohibition as purifier of, 53–54
Erickson, Edward, 31, 99, 112
escalating drug-use theory, 14, 109
evolutionary competition, temperance as advantage in, 13–15
Faulkner, Harold Underwood, 42
Federal Bureau of Investigation (FBI), 106
Federal Narcotics Bureau, 65–66, 66–67
Federal Reserve, 23
Federal Reserve Act, 53
Feenstra, Robert C., 95, 98
Feldman, Herman, 23–24, 25–26, 28
Ferdinand, Theodore A., 123
Fernandez, Raul A., 31, 35, 38
fiber, artificial, as hemp substitute, 68
15 Gallon Law (1838), 121–22, 126
fines, substitution for imprisonment, 148
Fisher, Irving, 27n.13, 29, 35, 122; on alcohol consumption patterns, 102; on alcohol potency under prohibition, 103–4; as champion of prohibition, 15–23, 26, 75n; on economic losses from alcohol, 24–25; on prohibition crime rates, 123; on relative prices of types of alcohol, 101, 102 (table), 103; on repeal of prohibition, 139
Fisher, Irving Norton, 16&n, 17, 18, 22, 23
Food Act. See Pure Food and Drug Act
Fort, Joel, 66
Foster Anti-Narcotic Bill, 62–63, 64
France, 136n
Franklin, Fabian, 122, 123
freedom: economic basis for, 86; prohibition as threat to, 86–88
free markets: as alternative to prohibition, 149–53; extension to nondrug economy, 151–53
Free to Choose (Friedman and Friedman), 9–10
free will: and addiction, 37n.32; vs. environment, 53–54
Friedman, Milton, 9–10, 104–5
Friedman, Rose, 9–10, 104–5
Gallagher, Winifred, 109
gambling: as leisure, 7; and police corruption, 133, 135; prohibition of, as basis for organized crime, 125; prohibition of, discussion in economics texts, 10
gangs, as manifestation of prohibition, 125–26
genetics, as factor in crime, 114–15
Georgia, 41
German Historical School, 11–12
Germany, alcohol consumption in, 13
Gienapp, William, 46
gin: potency of, 104–5; relative prices of, 102 (table)
Goldstein, Herman, 137
Goode, Erich, 66
Goodman, John C., 11
Great Britain: formation of police force in, 114; policy of, toward alcohol, 20; spread of opium addiction in, 58
Great Depression, 5, 20, 21n, 23, 66–67
Grimes, Alan P., 48
gunpowder factory, absenteeism rates in, 26 (table), 28–29, 29 (table)
Haller, Mark H., 133
Hampel, Robert L., 122
Harris, Jeffrey E., 95
Harrison, Francis Burton, 64
Harrison Narcotics Act (1914), 4, 29, 60, 62, 63–64, 67, 123, 124
hashish, 18, 67
Hayek, F. A., 6, 77, 80, 85–86, 105
health: endangerment by prohibited substances, 72&n, 91, 104–5, 110; risks of variations in potency for, 90–91
health care, deregulation of, 152. See also medicine, organized
Hegel, Georg Wilhelm Friedrich, 11
Helmer, John, 66
hemp plant, versatility of, 65, 68. See also marijuana (cannabis)
Henry, Andrew F., 124
heroin, 89; association of use with criminal behavior, 111, 112; combination drugs, 90; consumption patterns, 146n; control of use in medicinal compounds, 64; discovery, 57; escalation from softer drugs, 14, 109; health risks, 73n, 91, 110n; increased potency under prohibition, 98–99; maintenance programs, 33, 34n, 147–48; rehabilitation of addicts, 31n, 33
heroin, prohibition, 3; association of, with corruption, 135–36; costs of, 31, 34, 105–6, 106 (fig.), 112; creation of profit opportunities by, 135–36; effect of, as tax, 99; enactment of, 29, 61; market conditions under, 30–34, 117–20, 118 (figs.), 119 (fig.), 148; risk of capture under, 98–99, 117, 119; statutory definitions of, 96, 110
Herrnstein, Richard J., 125
Himmelstein, Jerome L., 66
History of Inebriating Liquors (Stille), 58
hoarding, 35
Hochman, Harold M., 36, 37nn.30, 32
homeopathic medicine, suppression of, 69
Hong Kong, 137
Hoover, Herbert, 134–35
Horton, James, 52
Horton Ice Cream Company, 52
Hotelling, Harold, 27n.14
Hu,T. Y., 28n.16, 102
human action, rationality of, 6–7, 10, 35, 77
Human Action (Mises), 111
Huss, Magnus, 58
Hutt, W. H., 140
immigrants: discrimination against, 62, 66; intemperance of, 45, 46, 47; purchasing of votes of, 55; social life of, 54, 60; use of narcotics by, 60; voting rights of, 53, 55
immigration, restriction of, 48, 53
import quotas, effects on product attributes, 95
impulse buying, 35
income: vs. drug prices, as determinant of criminal risk-taking, 117, 119 (fig.), 119–20, 142; redistribution of, by prohibition enforcement, 31
Index of Economic Journals, 24n
Indians, and alcohol prohibition, 4, 41
industry, productivity in. See productivity
inefficiency: of bureaucracies, 80–81, 83, 84, 85; correction of, by market, 80
information: availability in free market, 151; distortion by prohibition, 141; and policy decisions, 80, 81
inns, licensing of alcohol sales in, 41–42
insurance companies, coverage of drug abusers, 152
intemperance: competitive disadvantage of, 13–15; definition of, 44; as male problem, 48; as side-effect of war, 5, 42, 43n, 55, 57, 62, 64–65, 69, 152. See also drug abuse; temperance
interest rate regulation, as basis for organized crime, 125
Internal Revenue Service (IRS), 106
interventionism: adulteration of capitalist system by, 121; consequences of, 79, 85–88, 141; corruption as cause of, 129; costs of, 129; effects of, on market processes, 79; limitation of, 86–87; progressive process of, 84 (fig.), 84–85; repeal of, 85. See also prohibition; regulation
intoxicants, use of, as leisure, 7. See also under name of specific intoxicant
Ippolitio, Richard A., 91
Iran, 136n
Iraq, 136n
Ireland, 114
irrational behavior, 35
IRS. See Internal Revenue Service (IRS)
Italy, 136n
Japan, 95, 98
Jensen, Richard, 47
Jesus Christ, return of, 12n.3, 44, 48
Jevons, William Stanley, 22
Johnson, B. D., 111, 126
Johnson, Terry R., 95
Johnson, W. E., 104 (table)
Justice Department, 127; Bureau of Justice Statistics, 106n, 108–9
Kansas City, Missouri, 133
Kaplan, John, 147–48
Kauffman, Reginald W., 133
Kessel, Rubin A., 69
Key, Vladimer O., 49
Kirzner, Israel M., 35, 77, 79
Klein, Benjamin, 105
Kleppner, Paul, 49, 50
Knapp Commission on Police Corruption, 135
Knies, Karl, 12
Koren, John, 115
Krout, John Allen, 41, 42–43
Kunnes, Richard, 135–36
Kyvig, David E., 112
labor: conditions of, and employee absenteeism, 25, 28, 29; division of, and vice, 14
labor-leisure tradeoff, for addicts, 117
laissez faire doctrine, 17
Lancaster, Kelvin, 36, 37, 78, 92–93
Lane, Roger, 121
Lavine, Emanuel H., 133
law, as instrument of social reform, 11
law, rule of: interventionism as break with, 86; respect for, 151
law enforcement. See enforcement
law of decreasing marginal utility, 75
Lazarus, Edward H., 48
Lebanon, 136n
Leffler, Keith, 105
legalization: as alternative to prohibition, 3, 39, 139, 140, 147, 149–53; economists as advocates of, 9–11; of home production of alcohol, 21
leisure: as alcohol substitute, 28; consumption of prohibited goods as, 7; as incentive to absenteeism, 26; tradeoff of, with labor for addicts, 117
Lever Act, 55
liability laws: and drug safety in free market, 150–51; as incentive for private prohibition, 19, 20, 25
liberalism, disillusionment with, 85–86
licensing, of alcohol sales, 41–42, 43, 45, 54, 55
Lindsey, C. M., 81, 97
Little, A. D., 91
local option, 45, 46, 50
local prohibition, 45, 46
Lombroso, Cesare, 114
Lott, John R., 148
LSD (lysergic acid diethylamide), health risks of, 73n
McDonald, Lynn, 121
machinery, operation of, after alcohol consumption, 20
McKenzie, Richard, 11, 15
Maine laws, 46–47
maintenance programs, 33, 34n, 64, 147–48, 149–50
The Making of Index Numbers (I. Fisher), 22–23
malicious mischief, rates under prohibition, 123
marginal costs: of acts of corruption, 132; of prohibition, 75, 76 & fig.
marginal utility, of prohibition, 75–76
marijuana (cannabis): association of, with criminal behavior, 111, 115; consumption patterns of, 145, 146n; control of, in medicinal compounds, 62, 63, 64; decriminalization of, 139n, 140; escalation to harder drugs from, 14, 109; extraction of active ingredient from, 109, 110; increased potency of, under prohibition, 89, 90, 98–99, 106–8, 108 (fig.), 109, 110, 145; recreational use of, 65, 66, 105; regulation of markets in, 40; spread of use of, 67; substitutes for, 108–9; taxation of, 148
marijuana (cannabis), prohibition of, 3, 5, 28n.l6, 149; association of, with crime and corruption, 125, 126, 136; costs of, 105–6, 106 (fig.); effect of, as tax, 99; enactment of, 65, 66, 105; enforcement as determinant of potency under, 106–8, 108 (fig.); laxity of, 124; motivations for, 111; origins of, 40, 65–68, 69; risk of capture under, 98–99; statutory definitions of, 96, 110
Marijuana Tax Act (1937), 65, 66, 105
“The Market for Heroin before and after Legalization” (Michaels), 71
markets: alteration of products in, 78, 89; for crime, 116; discovery in, 79–83, 140–42, 143, 150; effects of interventionism on, 79; free, as alternative to prohibition, 149–53; free, extension to nondrug economy, 151–53; in illegal heroin, 30–34, 117–20, 118 (figs.), 119 (fig.), 148; industry standards in, 89; process analysis of, 77–78; regulation of, 40, 41–43, 51, 54–55, 69, 121–22, 140, 149; replacement of, with bureaucracy, 80–82, 141; solution of social problems through, 77, 83, 84, 150. See also black markets
Marx, Karl, 86
Marxism: approach to heroin addiction, 3 In; theory of crime, 115, 120–21, 122, 123
Massachusetts, alcohol regulation in, 121–22, 126
Massachusetts Society for the Suppression of Intemperance, 43
Mather, Cotton, 43
Mather, Increase, 43
Mayo, Charles H., 52n
medicine, organized: compromise on narcotics control legislation, 63–64; dispensing of drugs by physicians, 57, 62, 63, 64; healing practices, 57; monopoly status, 4, 64, 69; support for prohibition, 52n, 53n, 56–57, 59–60, 61–62, 69
methadone, maintenance of heroin addicts on, 33, 34n, 147
The Methodology of Economics (Blaug), 9
Metropolitan Police Act (1829), 114
“Mexican hypothesis” of marijuana prohibition, 66, 67–68
Mexicans, bigotry of prohibitionists against, 66, 140
Mexico, 112, 136n
Miami, Florida, 109n.9
Michaels, Robert J., 36–37, 71
Mills, James, 135
minimum-purchase restrictions, 46&n, 121–22, 126
Mises, Ludwig von, 6, 77, 81, 85, 111; on corruption, 127; on economic analysis of public policy, 73; on limitation of prohibition, 86–87
“misuse” of product, legalization as solution to, 3. See also drug abuse
Mitchell, Wesley C., 27n.14
“modern microeconomic synthesis,” 78
money, facilitation of exchange by, 77
Monkkonen, Eric H., 122, 124
monopoly: in alcohol market, 41–42, 43; behavior of bureaucracies as, 80–81; corrupted police as supporters of, 137–38; in medical and drug industries, 4, 64, 69
“moonshot,” 90
Moore, Mark H., 31–34, 130, 132, 135, 148
morality: as consequence of prohibition, 16; and economic questions, 12n.4; of enforcement, 137
More, Thomas, 113
Morgan, H. Wayne, 33n, 58
Morocco, 136n
morphine, 89, 109n.10; control of, in medicinal compounds, 63–64; discovery of, 57; prohibition of, 61, 86
murder: effects of prohibition against, 5; rates of, absent drug prohibition, 124; rates of, under drug prohibition, 122, 123, 125
Murphy, Dennis R., 91
Murphy, Kevin M., 10, 37–38
Muslims, opium use among, 58
Musto, David F.: on narcotic-maintenance programs, 147n.7; on origins of marijuana prohibition, 66; on political compromises over narcotics legislation, 63–64; on role of professions in prohibition, 56–57, 59, 62
Nadelmann, Ethan A., 136
narcotics: abuse of, 57–59; desire for, vs. attainment of satisfaction, 22; increased potency of, under prohibition, 89, 90; maintenance programs on, 64, 147n.7; medicinal use of, 57; as prescription-only drugs, 140; regulation of markets in, 40; as substitute for alcohol, 21; synthesis of, 109; taxation of, 148. See also heroin; opium
narcotics, prohibition of: association of, with crime and corruption, 126, 135, 136; creation of profit opportunities by, 123; enactment of, 60–65; laxity of, 124; origins of, 57–60, 69; as precedent for marijuana prohibition, 67; repeal of, 140, 153; special interests behind, 56–57, 59–60, 61–62. See also heroin, prohibition of
Narcotics Division, New York City Police Department, 135
National Alcohol Prohibition. See alcohol, prohibition of
National Association of Medicinal Products, 63
National Association of Retail Druggists, 63
National Commission on Law Observance and Enforcement, 26, 134–35
National Drug Trade Conference, 63
National Drug Trade Council, 63
National Drug Wholesalers Association, 59
National Institute on Drug Abuse, 72n, 91, 107, 110n
National Retail Liquor Dealers’ Association, 55
National Strategy for Prevention of Drug Abuse and Drug Trafficking (White House Drug Abuse Policy Office), 89
National Wholesale Druggists’ Association, 63
National Woman Suffrage Association, 48
nativist movement, 48
Nell, Humbert S., 125
neoclassical economics, view of market processes, 78
Newcomb, Simon, 12n.4
New Hampshire, 46
Newsweek, 9
New York City: heroin market in, 31–34; police corruption in, 133, 135
nicotine. See tobacco
Niskanen, William, 80–81
Nixon, Richard M., 125
The “Noble Experiment” (I. Fisher), 19
nonusers, discouragement by prohibition, 32, 33, 34
North, Gary, 41
Oberlin College, 18
O’Boyle, Ernie, 106n
Odegard, Peter H., 49, 50–51, 52
Oglethorpe, George, 41
oil (petroleum), as hemp substitute, 68
Oliver, F. E., 57–58
opium, 109n.10; control of, in medicinal compounds, 62, 64; “grip” of, 17; increased potency of, under prohibition, 89; international trade in, 62; medicinal use of, 57; “normal use” of, 18; spread of addiction to, 57–58, 60, 61n; substitutes for, 61n; use of, 57
opium, prohibition of, 86; enactment of, 60, 61; and international relations, 62
Ostrowski, James, 91
Pakistan, 136n
Palmer, Stanley H., 114
Panama, 136n
Pandiani, John A., 123, 124, 126
paper, hemp- vs. wood-based, 68
Pareto, Vilfredo, 35
patent medicine: addiction of consumers to, 61, 141; restrictions on, 59, 61–62, 63–64, 69; as source of opiates, 61
Patten, Simon N., 12–15, 29
PCP (phencyclidine), 90
Peltzman, Sam, 141
penalties: collected from alcohol prohibition, 100 (table), 101; corruption as function of severity of, 130; deterrent effect of, 116; judicial discretion over, 98, 99; potency of drugs relative to severity of, 96, 99, 109–10, 142; replacement of, by imprisonment with fines, 148; statutory specification of, 96, 110
Persoon, J. M. G., 149
Peru, 136n
Peter Principle, 81
pharmaceutical industry: compromise on narcotics control legislation, 63–64; monopoly status, 4, 64, 69; support for prohibition, 56–57, 59–60, 61–62, 69
Phillips, William R., 135
physicians. See medicine, organized
pietism, postmillennial, 12&n.3, 16, 43–44, 50, 56
police. See enforcement
police forces, formation of, 114, 121
political economy, and moral questions, 12n.4
Populist party, 49
pornography, prohibition of, 10, 11
Posner, Richard, 116
potency: and consumer tastes, 91; differentiation of demand according to, 91; dilution of, in illegal markets, 30–31; effects of, in enforcement, 90; as function of judicial discretion, 98, 99; as function of risk of capture, 96–99, 106–8, 108 (fig.), 110, 132, 142; as function of statutory penalties, 96, 99, 109–10, 142; as function of taxation, 95; health risks of variation in, 90–91; in mix of product attributes, 92, 93; regulation of, 149; relation of, to prohibition, 89–90, 91, 99–100, 103–5, 109–10, 143, 144, 145, 146; and technological changes, 91, 92 (fig.), 109, 110
Potency Monitoring Project, 107
poverty, as factor in crime, 113–14
price controls: as form of interventionism, 79; prohibition through, 148
price(s): after-tax, 93, 94–95, 99; consumption of substitutes as function of, 5–6, 144, 145; crime rates as function of, 31, 33, 77, 117, 119 (fig.), 119–20; demand as function of, 32, 33, 36, 37, 74, 91, 101–2, 117, 118 (figs.), 144, 145, 148; demand relative to differences in, 102–3, 103 (table), 108–9, 109–10; differentiation in, according to drug potency, 91; effect of enforcement on, 82–83; in free market, 150; as function of risk of capture, 97, 101, 117, 119, 120, 131, 142; of government services, 85; relative, under prohibition, 101–2, 102 (table); “street,” 97, 98
price supports, 83
prison sentences: deterrent effect of, 31; substitution of fines for, 148
private prohibition, 19–20, 25, 152
productivity: impact of alcohol consumption on, 25–27, 26 (table), 28–29, 29 (table); increase in, by prohibition, 16, 20
products, alteration in response to market forces, 78, 89
professional organizations: compromise on narcotics control legislation, 63–64; support for prohibition, 52&n, 53n, 56–57, 59–60, 61–62, 69
profits: entrepreneurial search for, 77–78, 80, 81, 93, 150; prohibition-created opportunities for, 82–83, 89, 116–17, 123, 130–32, 135–36, 142
Progressive Era: prohibition in, 4–5, 11, 40, 52, 53–56; racial views of, 68n; reforms of, 52–53; view of crime during, 115
prohibition: acceptance of, 86; alternatives to, 3–4, 139–40, 146–53; arguments favoring, 71–73; association of, with crime and corruption, 111–12, 122–24, 125, 126, 127, 133–38, 142, 143; changes in relative prices under, 101–2, 102 (table); correction of market failures with, 80, 141; costs of, 10, 11, 23, 25, 27, 29, 31, 34, 38, 100 (table), 100–101, 105–6, 106 (fig.), 112, 136–38, 143; creation of profit opportunities by, 82–83, 89, 116–17, 123, 130–32, 135–36, 142; definition of, 71; demand relative to price differences under, 102–3, 103 (table), 108–9, 109–10; discouragement of nonusers by, 32, 33, 34; discriminatory nature of, 39–40, 60, 62, 66, 67–68, 140; economic theories of, 3; economists as defenders of, 9, 10, 11–23; effects of, 5–6, 7, 86–88; enactment of, 29, 50, 55, 60–65, 105; and evolutionary competition, 13–15; feasibility of, 142–46; as form of interventionism, 79; growth and consolidation of, 50–56; historical perspective on, 4–5; impact of, on addictive behavior, 37; impact of, on consumer and producer, 74 (fig.), 74–75; intensification of criminal organization by, 125–26; and international relations, 62; irreversibility of, 39, 85; limitation of, 86–87; marginal costs of, 75, 76 & fig.; marginal utility of, 75–76; market conditions under, 30–34, 117–20, 118 (figs.), 119 (fig.), 148; motivations for, 40, 111, 140; origins of movement toward, 39, 43–47, 57–60, 65–69; politicization of, 47–50, 140; via price controls, 148; private vs. public, 19–20, 25, 152; rational basis for, 6; relation of drug potency to, 89–90, 91, 99–100, 103–5, 109–10, 143, 144, 145, 146; as remedy for crime and corruption, 16, 111, 112, 113, 126–27; replacement of market with bureaucracy under, 80–82, 141; scientific arguments for, 53–54; as side-effect of war, 5, 42, 43n, 55, 57, 62, 64–65, 69, 152; social/economic benefits of, 16, 20, 21, 24, 26–27, 143–44, 145, 146; special interests behind, 40, 52&n, 53n, 56–57, 59–60, 61–62, 68, 69; statutory definitions of, 96, 110; superiority of, to alternatives, 72–73; suppression of discovery process by, 80, 82, 83, 141, 143; as taxation, 93–94, 96, 97, 98–99; theory of crime underlying, 115. See also enforcement
Prohibition: Its Economic and Industrial Aspects (Feldman), 23–24
Prohibition Amendment. See Eighteenth [Prohibition] Amendment, U.S. Constitution
Prohibition at Its Worst (I. Fisher), 19
Prohibition party, 4, 47, 48–49, 50, 51
Prohibition Still at Its Worst (I. Fisher), 19, 139
property rights: changes in, 84; illegal exchange of, 128–29, 130; public officials as vendors of, 132
prostitution: as leisure, 7; and police corruption, 133, 135; prohibition of, as basis for organized crime, 125
protectionism, in alcohol markets, 42, 43
Protestants, evangelical, 12&n.3, 16; support for prohibition by, 48, 50, 51, 52, 56, 68; in temperance movement, 43–44, 45
public-choice economics, 6, 10, 132
public interest: justification of prohibition in, 71–72; pursuit of self-interest at expense of, 127–28
public opinion: appropriate levels of drug enforcement, 75n; health risks of drugs, 72n; marijuana decriminalization, 139n; support for prohibition, 143–44
public policy, economic analysis of, 73
Pure Food and Drug Act (1906), 61; prohibition clauses, 18–19
Puritans, regulation of intoxicants, 41
Pyle, David J., 114
quarantine, of heroin addicts, 147&n.6
Ramsey, J., 107n.8
rationality: and addiction, 10, 31, 35–38; of corruption, 127–28, 129; criminal behavior as form of, 113–14; of human action, 6–7, 10, 35, 77
Reagan, Ronald, 10
Reed, Lear B., 133
reform groups, motives of, 40, 140
regulation: of alcohol markets, 40, 41–43, 51, 54–55, 69, 121–22, 140, 149; as alternative to prohibition, 140, 149; association of corruption with, 129–30; capture by, of bureaucracies, 81; as form of interventionism, 79; prohibition as consequence of, 40, 54–55, 69, 80; suppression of discovery process by, 141
rehabilitation, of heroin addicts, 31n, 33
rent seeking: and changes in property rights, 84; distinguished from corruption, 6, 128; prohibition policy as, 6, 40, 52, 56, 59, 65, 68, 69, 71, 83, 140; similarity of, to corruption, 132
Republican party, 43, 46, 49, 50, 51
Reuter, Peter, 82–83, 90, 119
The Rise and Fall of Prohibition (Towne), 39
Road to Serfdom (Hayek), 85–86
Roback, Jennifer, 40
robbery: rates absent prohibition, 124; rates under prohibition, 122–23, 125
Roberts, Russel D., 148
Rockefeller, John D., 52
Roger Peet and Company, 52
Roosevelt, Theodore, 62
Root, A. I., 52
Root Beer Company, 52
Rose-Ackerman, Susan, 128–29, 132
Rosenstone, Stephen J., 48
Rothbard, Murray N., 55, 128–29
Rottenberg, Simon, 30–31, 90, 108, 130
rubber factory, absenteeism rates in, 25n
Rubin, Paul H., 115
rum, commerce in, 41, 42–43
Rush, Benjamin, 43
safety, industrial, and alcohol consumption, 28
Sait, Edward G., 55
saloon: as outgrowth of licensing system, 42; social functions of, 54; as target of prohibitionists, 50–52, 54–56
Sant, Donald, 91
satisfaction, attainment of, vs. desire, 22
Scalia, Antonin, 116
Schumpeter, Joseph, 22
Scopes trial, 50
search and seizure, in enforcement of prohibition, 46
Second Hague Peace Conference, 62
self-destruction, 7
self-esteem, and addictive behavior, 36
self-interest, pursuit at expense of public interest, 127–28
Shecter, Leonard, 135
Shirras, G. Findly, 22
Short, James F., 124
Shultz, George, 10
Silberberg, E., 93n
Silbey, Joel H., 47
Silverman, Lester P., 120
Simpson, Anthony E., 127
Sisk, David E., 137
slaves, and alcohol prohibition, 41
Sloman, Larry, 68
Smith, Adam, 113, 114, 115, 126
Smith, Moe, 81–82
Smith, Ralph L., 135
smuggling: creation of opportunities for, 82–83; in decriminalized drug market, 149; of rum, 41
social groups, distribution of heroin through, 32–33
socialism: vs. anarchism, 17; in economics profession, 11, 12
soldiers: issuance of alcohol rations to, 42, 43n; issuance of narcotics to, 57
Sons of Temperance, 44
South America, narcotics use in, 57
Southeast Asia, political corruption of, 136n
Spain, 136n
Spanish-American War, 62, 69
special interests: compromise by, on narcotics control legislation, 63–64; instigation of prohibition by, 40, 52&n, 53n, 56–57, 59–60, 61–62, 68, 69
“speedball,” 90
standard of living, increased by prohibition, 16. See also development, economic
Stanton, Elizabeth Cady, 48
stifled discovery process, 82, 141, 143
Stigler, George J., 35–36, 37, 81, 133
Stille, Dr.—, 58
stock-market crash (1929), 27
Stone, Lucy, 48
substitution effect: as consequence of increased enforcement, 144, 145; and price inflation, 5–6; and relative prices, 108–9, 109–10; and restriction of supplies, 74; in spread of opium addiction, 57–58, 61n
suffrage, women’s, 48, 49, 50, 53
Sullivan, Edward D., 133
Sumner, Michael T., 95
Sumner, William Graham, 14, 17
supply: extinction of, 75, 76n; as function of product attributes, 92–93; reduction of, by prohibition, 31, 74
Supreme Court, U.S.: death penalty decisions by, 115–16; and narcotics maintenance programs, 64
survey, of employee absenteeism, 25–26, 26 (table), 28
Sylbing, G., 149
syndicates, criminal. See crime, organized
synthetic [designer] drugs, 109
Szasz, Thomas S., 143
Taking Care of Business: The Economics of Crime by Heroin Abusers (B. D. Johnson), 111
tariffs, effects on product attributes, 95, 98
taxation: as alternative to prohibition, 148–49; effect of, on product attributes, 93–96; potency as function of, 95; prohibition as, 93–94, 96, 97, 98–99
Taylor, Arnold, 57
technology: of detection avoidance, 131; effects of changes in, on drug potency, 91, 92 (fig.), 109, 110
temperance, social experiment in, 41. See also intemperance
temperance movement, 43–46; crime as protest against, 121–22; split by prohibitionists from, 51; triumph of coercive tendency within, 45–46, 56, 68–69, 140, 141
THC (tetrahydrocannabinol), 108 (fig.), 109, 110
“A Theory of Rational Addiction” (Becker and Murphy), 10
therapeutic state, 143
Thornton, Mark, 10, 11n, 29
thought, prohibition of, 86–87
Thrasher, Frederick, 126
Timberlake, James H., 53, 54, 115, 126–27
time-allocation model of criminal behavior, 116
tobacco: increase in potency with taxation, 95; movement to outlaw, 39; “normal use,” 18; potency absent prohibition, 91; regulation of markets, 40, 140, 141; prohibition, 40, 41, 86; repeal of prohibition, 139
Tollison, Robert D., 11, 55
Towne, Charles Hanson, 39
Traffic in Narcotic Drugs (Treasury Special Committee on Narcotics), 64
transportation costs, effect on product attributes, 93, 94 (table), 95
Treasury Department: Narcotics Division, Prohibition Unit, 65; Special Committee on Narcotics, 64
trucks, tariffs on, 95, 98
Tullock, Gordon, 11, 15, 84
Turkey, 58, 136n
The Tyranny of the Status Quo (Friedman and Friedman), 9–10
Tyrrell, Ian R., 44, 47
United Nations, 142
United States Brewers’ Association, 52, 55
United States Pharmacopoeia, 52n
U.S. Steel Corporation, 52
University of Chicago economics school, 10, 35, 38
urbanization, and crime rates, 121, 123
Utah Territory, 48
utility: of addiction, 35–36, 37, 38; of criminal behavior, 116; enhancement of, 78; marginal, of prohibition, 75–76; maximization in free market, 150
utility theory, mathematical model of, 16–17
vagrancy, rates under prohibition, 123
The Value of Law Observance (Bureau of Prohibition), 26–27
Veblen, Thorstein, 15n, 29
Venezuela, 136n
Vermont, 46
Veterans Administration, 97
Vietnam War, 5, 36n.29, 125
violence: of criminal enterprises, 112, 120, 125; elimination of, in free markets, 151
Volstead Act, 5, 19, 20, 100, 133
von Mises, Ludwig. See Mises, Ludwig von
voting: corruption of, 55, 111, 129; reforms of, 48, 49, 50, 53, 54
Wadsworth, James, 49
Wall Street Journal, 9
Walras, Léon, 17
Wanamaker, John, 52
war, intemperance and prohibition as side-effect of, 5, 42, 43n, 55, 57, 62, 64–65, 69, 152
Warburton, Clark, 23; on alcohol consumption patterns, 102, 103, 104 (table), 145n; on costs of alcohol prohibition, 100 (table), 100–101; on economic effects of prohibition, 26 (table), 27–29, 29 (table); on prohibition crime rates, 123; on relative prices of types of alcohol, 101; on role of business in prohibition, 52
Ward, Robert, 95
War of 1812, 43
war on drugs, 125
Washington, D.C., 119
Washingtonians, the (temperance society), 44, 45–46
Weeden, William B., 41
Welch’s Grape Juice Company, 52
Westerfield, Ray, 23
West Indies, rum trade with, 41, 42
Wharton School of Economics, 12
whiskey: commerce in, 43; consumption patterns of, 102, 103 & table, 104 (table); medicinal use of, 52n; potency of, 103–4; prices of, relative to beer, 101–2, 102 (table)
Whitebread, Charles, II, 66
White House Drug Abuse Policy Office, 89
Wickersham, George W., 135
Wickersham Commission. See National Commission on Law Observance and Enforcement
Wickersham Report, 133–35
Williams, Robert H., 135
Wilson, James Q., 125
Wilson, Woodrow, 18–19
wine: cocaine as ingredient of, 60; consumption patterns of, 104 (table); disassociation of hard liquor from, 55; Islamic injunction against, 58; relative prices of, 102 (table); view of temperance movement toward, 44, 45
Women’s Christian Temperance Union, 4, 48, 49
women’s movement, support for prohibition, 47, 48, 52
Wooddy, Carroll H., 123
workers: issuance of alcohol rations to, 19, 41, 42; reaction to capitalism, 120–21. See productivity
workmen’s compensation laws, as incentive for private prohibition, 20
World War I, 50, 52, 56, 105n, 122; and narcotics control, 64–65, 69; policy toward alcohol during, 18–19, 55, 123
World War II, 5
Wyoming territory, 48
Yale Socialist Club, 17
Zarkin, Gary A., 124
