Prohibition Economic Effects

731 Words2 Pages

The prohibition era in American history was an era that saw a lot of controversy and issues, between government corruption, mass moonshine operations, rise of criminal syndicates & organized crime, and many other problems. Overall, while it was created with good intentions, it ultimately created more problems than it solved, in that it weakened the (legal) economy, turned millions of people into criminals/encouraged many people to commit crimes, and that overall, there were no positive outcomes from the prohibition. One of the many problems with the prohibition was that it resulted in a lot of economic problems among others.The alcohol industry itself when it was legal brought in considerable income through taxation, totaling around $226B. …show more content…

The instant the Volstead act was passed it had made thousands, if not millions of people into criminals between the sale, manufacture, and transport of alcohol. The number of arrests had increased dramatically since the beginning of the prohibition, estimated at about a 25% increase (“Negative Economic Impacts of Prohibition”). It is also estimated that during the prohibition, the government's expected consumption of alcohol would be zero, but in reality it is estimated that the consumption of alcohol only dropped to about 70% of what it was pre-prohibition (Rogers). The loss of so many jobs throughout the industry as breweries, distilleries, and liquor stores affected thousands of people, and the rise of organized crime and the resulting violence would affect anybody who had even a little influence in the illegal alcohol industry. Within the illegal alcohol industry, alcohol rings were established in gangs/businesses that either manufactured alcohol hidden in the US or outside of the borders, and smuggled it into the country. The illicit alcohol was then transported in secrecy to numerous speakeasies all around the country. There were seemingly two different methods for the numerous organizations that worked to supply alcohol: Violent organizations (such as that run by Al Capone), and nonviolent businesses that simply acted as suppliers. The basic thought behind …show more content…

It was intended to try to put an end to alcohol related issues such as alcoholism, but in banning the transportation, manufacture, and sale of alcohol, there were no real positive outcomes whatsoever. Government corruption was completely rampant as alcohol smuggling crime syndicates and gangs were so rich and so powerful that they were able to manipulate the government, and there were even inherent loopholes within the volstead act itself (such that it only banned the sale, transport, and manufacture of alcohol but NOT the consumption, and really just worsened alcohol related issues from before, as now basically anything pertaining to alcohol was illegal

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