German Lopez: What would you say is the biggest misconception about Prohibition?

Daniel Okrent: I think the major misconception more than anything else is that it's something the majority of Americans wanted. After all, how else could it make it to the Constitution?

In fact, it was primarily the work of one pressure group — the first such group that called itself a pressure group. The Anti-Saloon League knew that if you controlled the margins, you could win legislative majorities and even supermajorities. In any given district, they'd say, Look, 45 percent of the people are for the Democrat, and 45 percent of the people are for the Republican. Who controls the 10 percent of the middle? And that's what they fought for — those 10 percent who would vote for whomever the ASL told them to vote for. By picking only one issue and not caring what legislative candidates — state or federal — cared about in terms of other issues, they were able to have an enormous effect.

It's a practice that's been copied to the letter — I don't know whether by design — by the NRA. They don't care what you think about any other issue but their issue. If you're for their issue, they will support you.

German Lopez: That's interesting. A lot of people probably think Americans supported Prohibition, saw its effects, and then started to oppose it. That's not totally right, then?

Daniel Okrent: Well, once it was in place, it didn't win any friends. Prohibition became less popular as it went on, so it's true to that degree. But I think it's important to understand that there was not any evidence that a majority of Americans were ever for it.

Prohibition really did cut down on drinking, even after it ended

German Lopez: One thing I've heard a lot is that Prohibition didn't reduce drinking. But that seems to be wrong. At least initially, it seemed to cut down on drinking.

Daniel Okrent: Yeah, it did quite a bit at first. Even in the long run, it did. We didn't get back to pre-Prohibition drinking levels until the late 1930s, and we didn't really surpass the most drunken periods of American history until the 1970s. So it did reduce it.

It's a little hard to know, though. We've always been able to measure how much people are drinking by the tax stamps — the taxes that are paid by the distillers and the brewers. But there were no tax stamps, no taxes collected between 1920 and 1933. So we only have estimates.

But we do know how much people were drinking in 1919 and 1934, and we see that there was a reduction, definitely.

But Prohibition had many adverse effects

German Lopez: Of course, the argument would be whether that was worth the costs and consequences.

Daniel Okrent: Right. I don't see how anyone can successfully argue that it was worth it, because the other consequences were so severe. There are a number of reasons.

First, and most important, it took away an individual right. Taking away individual rights isn't something we should do carelessly. It was a right that Americans had enjoyed since the first colonists got here. John Winthrop's boat, which came over here in 1630, had more beer than water in its hold.

Second, it deprived the government of enormous amounts of tax revenue.

"[Prohibition] created a national crime syndicate"

Third, it created a national crime syndicate. Until Prohibition, there were criminal gangs, but they were localized. There was a district or town that might be controlled by local mobsters — where there was gambling, illegal drugs, prostitution. But there was no reason for the gangsters in Milwaukee to have anything to do with the gangsters in Chicago. Then, with Prohibition, you suddenly have huge quantities of physical goods that need to be moved from one place to another. That led to the creation of the national syndicate — first proposed at a 1929 meeting in Atlantic City — which brought together the heads of criminal operations in six cities. They agreed to divide up territories, work out shipping systems, fix prices, and do all sorts of things that cartels will do. That was furthered in another meeting a few years later, which had mobsters from 21 cities in attendance.

Fourth, you can add in the assault on respect for the law itself. If this is in the US Constitution and it's supported by the Volstead Act and various state laws, and everyone can see that these laws weren't being enforced and people were flaunting them openly, then what does that do for respect for law? Obviously, it has a hugely diminishing effect on it.

German Lopez: I think people generally understand that Prohibition caused crime to spike. But I don't think people are familiar with the fact that it caused not just more crime, but organized crime for the first time. That's an interesting distinction.

Daniel Okrent: It was an enduring result, too. The same criminal syndicates that were created during Prohibition in the 1920s on a national basis were still riding high a half-century later and more. They just moved into different businesses.

Changes in tax policy led to Prohibition — and to its end

German Lopez: Do you think there are any other misconceptions about Prohibition?

Daniel Okrent: One thing that people don't realize is how both the arrival and the end of Prohibition can be traced to tax policy. The Anti-Saloon League and the other people who were advocating Prohibition recognized that they didn't have a chance to make it federal law until after there was an alternative to replace federal tax revenue from the sale of alcohol. Up until the enactment of the 16th Amendment, the income tax amendment, in 1913, as much as 40 percent of domestic revenue for the federal government came from the tax on alcohol. So until you had something to replace that tax, there was no way Prohibition could be enacted.

In 1913, the 16th Amendment is ratified, and Congress passes and the president signs a law instituting the first income tax. On the very heels of that, the Anti-Saloon League — at a meeting in its headquarters in Washington, DC — decided, "Now we can go for a constitutional amendment." So without the income tax, you have no Prohibition.

Then at the other end of Prohibition, in 1929, the market crashes, and the Depression follows. Federal income tax revenue plummets. Income tax collections are reduced by as much as 33 percent, and the tax on capital gains disappears entirely, because there are no capital gains from 1929 to 1933, since everybody is losing money in the stock market.

"Both the arrival and the end of Prohibition can be traced to tax policy"

As a result of that, the federal government is running on fumes. Before the election of FDR in 1932, even the Hoover administration didn't have the money to simply function, much less enact any fiscal or monetary policy that might have helped the country pull out of the Depression. Enormous numbers of jobs are lost, too. The country's in terrible shape.

Somebody says, "Where can we go to get some tax revenue? Aha. You remember the nickel on a bottle of wine or the 2 cents on a bottle of beer? If we bring that back, we can collect meaningful federal revenue."

Additionally, it was an enormous jobs program. At the time Prohibition came in, the alcohol beverage industry was the fifth largest industry in the nation. So when you bring it back in 1933, the distillers, breweries, wineries, bottle makers, cork makers, the truck drivers, and so on and so forth are all in business again. It was a great, great jobs program.