Easter Symbolizes a New Hope for Life and Liberty

Easter was the beginning of a process of discerning a new reality in the world.

Easter morning is filled with delight: bright colors, delicious foods, happy scenes of bunnies, and egg hunts. Above all, for those who are Christian, we are called to celebrate the joy of the resurrection of Christ from death to new life. The contrast between Good Friday and Easter could not be starker: with the quick turn of the calendar, we move from desperate sadness to unmitigated celebration.
It was not this way in the ancient Christian liturgy. Easter was the beginning of a process of discerning a new reality in the world. It was an entire season lasting five weeks, during which time the dramatic realization of what happened and what it implies for the world unfolds in stages, like spring itself. You can see it in the texts of liturgy and hear it in the chanted music from the first millennium.

Spring Dawns Slowly
Initially, on Easter morning, there is not unmitigated joy, but rather an awe that approaches a kind of fear: the man who was dead is said to be alive again, which seems to lend credibility to those who said he was not a false prophet but rather the son of God.
Listen to the melody of the Easter morning entrance song from the old liturgy, which isn’t celebratory but awe-struck and slightly frightened.

What does this imply about the crucifixion itself, and what does this ask of those who stood aside as Jesus was put to death at the bloody hands of the civic authorities?
In the second week after Easter, the ancient liturgy observes people’s dawning realization of the truth they have witnessed, and are thereby drawn by a sense of awe to a new faith, brought into the community of believers one person at a time. In the third week, you experience the first cries of joy, and in the fourth, the celebrations consist of new songs, songs that depart from tradition and introduce a new age. By the fifth, the experience of elation is completely unleashed and proclaimed to all the world.

Life Moves Fast
But in modern times, the entire experience is put on fast-forward. Traditionalists regret this, but it is a defensible change that keeps track of the dramatic cultural shifts between the first millennium and the second. In the first, very few people experienced anything like what we call material progress today. The population barely grew and life was characterized by an unchanging tedium of survival.
In the second millennium, over the course of hundreds of years, humanity experienced the first signs of the possibility of life improvement, longer and better lives even within a single generation, and modernity dawned with the gradual unfolding of freedom and the accumulation of material capital. Sickness and death gave way to health and life as a reasonable expectation.

So, in this sense, it makes sense that stories about ourselves and even the past would speed up as well. Whatever it is today, we want it now and in the most time-efficient form of delivery possible. A website that sticks is abandoned. A book that is too long is not read. Even a sermon in church that drags on tempts people to leave their pews and find a better way to spend the hour.

We have come to believe that life is about more than preparing our souls for eternity; it is about finding great experiences within the structure of time itself. Hardly anyone even questions this notion today. We carry it with us constantly. Our impatience with tedium is palpable.

With the advent of capitalism, humanity experienced a realization of dreams that had been materially inaccessible throughout most of history.

This is a cultural change in us wrought by capitalism, and it is nothing to regret. The existence of “time preferences” – that we want to have what we desire sooner than later – is what might be called a Kantian category of action. It is baked into our choices as human beings. The material world either accommodates us or it does not. With the advent of capitalism, humanity experienced a realization of dreams that had been materially inaccessible throughout most of history. We are today surrounded by its blessings in ways we don’t fully appreciate.

It Needs to Happen Now
Let me just relay a story from this morning, which you might find trivial but is actually glorious.
I woke this morning determined to get my oil changed. Now, when my father was my age, he had to do it himself. There were no places where you can go and be in and out in 10 minutes. I, on the other hand, know that this is possible now, without fuss and without an appointment.

So I started driving, letting my mobile app guide me to the closest place and with full confidence that I could achieve my goal. I got my oil changed for $39 and they added fluid for my power steering, which fixed a whirling sound I’d been hearing. Then I got my car washed and the guy fixed my glove compartment that kept falling open. Somehow he just knew what to do, and he did it just to be nice.
Then I went to a car parts store and got some wipes that made my car smell great, and also some touch-up paint – yes, they happened to have the right color – that took away some scrapes on the paint. I did all this just by driving around and meeting nice people and engaging in beautiful commerce all designed to make my life better. I met fascinating, talented people and saw my life improve in real ways through human labor, courtesy, and commercial activity.

No matter how much we get, and however soon we get it, there is still something in us that aches for more.

This is the way mornings should be. But of all the mornings in world history, it has only become possible to live this way in 0.00000009% percent of them (not scientific, but you get the point). But instead of celebrating how easy our lives are, what do most people do? They grumble about the traffic. They complain that they had to do this at all. They get upset that they are not otherwise at the office or languishing at home or huffing and puffing at the gym.

No matter how much we get, and however soon we get it, there is still something in us that aches for more. This too is a defensible impulse because it is that longing in us that causes us to act to make the world a better place through entrepreneurship, risk-taking, working hard, saving, and generally having the option as consumers to buy what it is that capitalists are selling us. So long as we are free in action and choice, our disgruntlement becomes a motivating force for improving the world.

Politics Is a Different Matter
And yet, there is one space in life where wanting more sooner does not redound to our benefit. It is within the political sphere. We listen to candidates sell their nostrums and go to the voting booth to buy what they are selling. Then we are shocked when it turns out that they cannot and will not deliver on what they say. Then we do the same thing two years and four years later, never learning the lesson that the political marketplace doesn’t really exist to serve us but rather to serve an institution that, in so many ways, exists outside the sphere of social action. The state is different, radically different, from the marketplace.

Because of this tendency to want more as soon as possible and to speed up life to accommodate our wishes, people tend to fall for charlatans in political life. Some dude comes along promising to make us great and we go for it, even if what he says makes no sense. Another person says he will deliver justice, equality, fairness, and goodness through taxing, regulating, spending, and war, and people figure that they will “spend” their vote and take the chance that it is true.

Growing in Liberty
Liberty is not something you can buy. It is something you must build through intellectual courage and hard work.

True maturity in political action requires two mental steps. First, we have to decide what it is we want. The burden of the liberal tradition has long been to convince people that the best possible world for us comes through voluntary action within a social setting we create for ourselves, and not from the imposition of someone else’s plan from the top down. Second, we have to cultivate patience that working for the long-term goal of humanity requires commitment, slow growth of intellectual communities, the persuasion of public intellectuals, and deep investment in an idea.

This is the only way it can work. Liberty is not something you can buy. It is something you must build through intellectual courage and hard work. It cannot be granted to you by a politician. It doesn’t even come from politics alone. The work of liberty is a cultural act, extended from the sphere you can control and working outwards to change the intellectual fabric of society.

The work of liberty unfolds over time like the dawn of spring itself, or the unfolding of Easter in the ancient Christian liturgy. What is possible in this world is a slow realization, born first of awe, then turning to a new consciousness, unfolding in gradual celebration, and culminating in a message to the entire world. Liberty is what allows us all to cast off the old world of authority and imposition and sing a new song of freedom the world over.

Jeffrey A. Tucker

Jeffrey Tucker is a former Director of Content for the Foundation for Economic Education. He is the Editorial Director at the American Institute for Economic Research, a managing partner of Vellum Capital, the founder of Liberty.me, Distinguished Honorary Member of Mises Brazil, economics adviser to FreeSociety.com, research fellow at the Acton Institute, policy adviser of the Heartland Institute, founder of the CryptoCurrency Conference, member of the editorial board of the Molinari Review, an advisor to the blockchain application builder Factom, and author of five books, most recently Right-Wing Collectivism: The Other Threat to Liberty, with a preface by Deirdre McCloskey (FEE 2017). He has written 150 introductions to books and more than ten thousand articles appearing in the scholarly and popular press. He is available for press interviews via his email.

This article was originally published on FEE.org. Read the original article.

Socialism is an Economic Fallacy by P. H. Scullin 1910

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A Socialist is a Fanatic Believer in an Economic Fallacy by P. H. Scullin 1910

To the man who does not know, and has not the time nor desire to find out for himself from actual contact and experience of the blind, unreasoning belief of the Socialist in his own economic religion (for it is his religion and his only religion), I would recommend the reading of "The Veiled Prophet" in Moore's "Lalla Rookh," where he tells us: 

"That ne'er did Faith with her smooth bandage bind

Eyes more devoutly willing to be blind 

In his own cause—never was soul inspired 

With livelier trust in what it most desired.

The babe may cease to think that it can play

With Heaven's rainbow—alchemists may doubt

The shining gold their crucible gives out,

But Faith, fanatic Faith, once wedded fast

To some dear falsehood, hugs it to the last."

Once a man embraces Socialism he is outside the pale of all logical reasoning; he will not listen to anything excepting what pertains to the propagation of his own dear, false belief. He has no time to listen to those who do not believe as he does. He wants to do all the talking, and he takes care that he will do all the talking. He doesn't want to be convinced; he is already convinced beyond all hope of change. His mission henceforth is to convert, not to be converted. However patient you may be you cannot get in a word. He never tires; he talks to you, at you, over you and all around you, but he never listens. What's to be done with him then? Just leave him alone, that's all; he'll die sometime. But let us try and save the rising generation from imbibing his false economic doctrine.

Socialism in its present stage is a creed, a faith, a blind, unreasoning belief amounting to fanaticism. They teach that they have founded the only infallible, economic religion by which the working man may or can be saved from oppression and injustice. They have their share of hypocrites and unbelievers who preach their gospel for no other reason than to make an easy living, but I believe there are others who have embraced higher and holier creeds, who are equally imposed upon, but the preaching impostor does not, nor can he, detract one iota from our admiration for the honest believer who sits, listens and believes both in the preaching and the preacher. Why, then, blame the Socialist, if he does but honestly believe?

Socialism is a disease. It is a disease of the mind, and what is worse, it is an infectious disease and anarchy is but an acute stage of the disease. It is, from the first, all but incurable, for the simple reason that in its insidious development it blinds the moral perception as to what is just and what is unjust. It strikes its devotees with moral blindness. This is the most hideous feature of this new political faith.

People wonder at the spread and growth of Socialism, but why? Simply because they wonder without thinking. When the followers of Joseph Smith could be brought to look on the bestial institution of polygamy as a religion; when Dowie, the ex-convict, could make thousands not only believe that he was Elijah II, but could get them to surrender their wealth in evidence of their faith, what then? Is not Socialism promising the workingman a heaven here on earth with a choice of broad highways to reach the next?

Any man who has made a study of Socialism, mixed with Socialists, reasoned with them and has himself remained healthy, will confirm my statement that it is an infectious disease. But if it is a disease of the mind, why does it not attack the rich and well-to-do? Easily answered. The subject must be in a receptive mood or it is impervious to disease of any and of all kinds. There are men who could not take smallpox, yellow fever or the mumps. Poverty has ever been responsive both to disease and malignant influence.

We do not find fault with a man for having a fever, smallpox or diphtheria,—not at all. Instead we call upon the most eminent doctors and medical practitioners in our midst to care for the patient and safeguard the community from the spread of the disease.

But what have we ever done, either to cure the diseased Socialistic mind or check the growth or spread of Socialism among our otherwise healthy and well-disposed American workmen? I answer, nothing and worse than nothing. Not content with our neglect at home we are engaged in the business of importing the foreign article. Every vile concoction of international human filth is being dumped upon our American shores. We see the Mafia, the Carbinarria, the Black Hand, the Socialist and the Anarchist take root, grow and flourish in this our land of liberty and equal rights. We see the imported product of foreign nations come to our country and in a few short years, through influence gained in irresponsible organizations, becoming dictators in the political field, dictating to American-born citizens the men for whom they shall vote, and assailing our laws and the dispensers of our laws.

Ex-President Roosevelt has declared that the worst enemies of our American institutions are the men who are trying to array one class of American citizens against another. The scriptures tell us that a house divided against itself must fall. Yet, in spite of the warnings of our president, the scriptures and experience; in spite of our own better judgment; in contemptuous defiance of what may and will follow if we persist in our past and present wicked, selfish, uncharitable and un-American industrial and political methods of disintegration and despoliation, we sleep on.

In the present condition of society, where only wealth or eminence can gain a hearing, where the average business man has neither the time to read nor to listen, it is little short of folly on the one hand and presumption on the other, for the unknown to give expression to thoughts, fraught though they be with importance in relation to our country's future; yet would I call upon our representative men to pause and think, and I would have them do their thinking now, this very minute. There is no to-morrow. It is only the fool that says to-morrow will do. The Socialist, the Anarchist, the professional agitator, the social and industrial disrupter of our peace and unity does not wait for to-morrow. He used up yesterday; he is using to-day, and he will be here tomorrow also, with only this difference: To-morrow there will be two where there is one to-day. If there is one evil in our country to be deplored above another, it is our individual indifference to community interests, and the future of our Nation. No one seems to have a moment to spare for the safeguarding of the best interests of all, and yet if we but took a sane or common-sense business interest in our own children's future how easy it would be to hand down to them and theirs, in perpetuity, that National stability which we have enjoyed and whose very foundations are threatened to-day. And threatened by what? By irresponsible, glibtongued orators, who are spreading abroad the spirit of discontent and instilling in the mind of ignorance the poison of class hatred. They are successful in their mission of evil because of our indifference, but let us not forget that if their converts are not endowed with an overplus of intelligence, they are at least endowed with muscle, and that infuriated ignorance loses little time in its deliberations over who shall be its victims. It strikes first and deliberates afterwards.

While it is my intention, in the near future, to treat at length and in a separate pamphlet, the cure for the evils I have pointed out, I believe the following exposition of Socialism, its methods and designs, would be incomplete did I not endeavor to interest our thinking business and professional men in some specific and earnest movement to counteract the evil that is being done to the present and coming generation, by the false and materialistic education of to-day. This question of Socialism and anarchy can no longer be considered merely a passing delusion. It is here. It is a disease and it is spreading. It is insidious, and like a cancer or leprosy. When it takes the patient he is incurable. What, then, should be done to safeguard society from the dire results that are sure to follow in the fullness of time? There is nothing, absolutely nothing, that can be done except that which the Socialists themselves are doing, namely, educate the people. What our country wants, needs and must have is a well-organized and systematic plan of wholesome economic education. Socialistic and Anarchistic literature is, at the present moment, being printed in the United States in seven different languages and is being distributed by the ton. Emma Goldman and Anarchist Berkman distributed 135,000 anarchist pamphlets to the working men of Chicago and New York during the Labor Day parade of 1903, and are to-day lecturing all over our country, hiring our most expensive halls and stopping in first-class hotels, being interviewed by special reporters, and are given whole columns of advertising in the public press. The Appeal to Reason has 250,000 subscribers and is read by probably 1,000,000, including women and children. There is a Socialistic newspaper in every city of any size in the United States. They have their public lecturers by the thousands, from Debs down to the curbstone orator on the street corner. In the workshop they include the Workmen of the World and the Western Federation of Miners. Their latest move on the Pacific Coast is the offering of money prizes to our public-school children for the best essays on SOCIALISM. This is for the nefarious purpose of inducing our children to read their own literature to the end that their young and impressionable minds may become poisoned or inoculated with the Socialistic virus of to-day.

In my varied experience of sixty years as an observing man, I know of no public evil of which we have been so neglectful. I know of no menace to community interests, to public or national welfare or to the well-being of coming generations to which we have shown such utter indifference. Other diseases kill the body only. This disease affects the mind, destroys all peace, blights hope and hurls the souls of men to perdition. In page 26 of State Socialism and Anarchy, it is said: "We look upon divine authority and religious sanction of morality as the chief pretexts put forward by the privileged classes for the exercise of human authority." "If God exists," says Proudhon, "He is man's enemy." In all other affairs of life we are most watchful, ever on the alert to checkmate, prevent, eradicate and banish from our midst anything and everything that might be hurtful to either the individual or the community. If crime is rampant we add to our police force and pass more stringent laws for the suppression of vice. If typhoid fever is epidemic we immediately improve sanitary conditions. If contagious disease appears we establish quarantine hospitals. Our scientists are forever delving into the mysterious chambers of the unknown to find the means of relieving pain, renewing health and prolonging life, not to speak of the infinite service they have done and are still doing by their classification of microbes, to the end that the good microbe may eat the bad one.

We permit a fool his liberty so long as he is harmless; we do not interfere with the faith and prayer healers so long as they do not neglect to call in the doctor, but the moment the fool becomes dangerous we send him to an asylum, and should the faith curist neglect to call in the doctor and the patient die, we immediately put the man of prayer in jail. There is just one protection against Socialism, and that is to beat the Socialist at his own game. How? Simply by an honest, earnest campaign of wholesome economic education, free from every bias, non-partisan, logical and clean. I feel certain that if some man of standing would only take up this question of combating Socialism in the way I have suggested, not by fault-finding, suppression or harsh treatment, but through rebuttal and by showing the fallacy and degradation of the entire Socialistic structure, great good would result from the effort. There are thousands of wealthy and patriotic citizens who would be glad to give the movement their warmest support. For the entire ten years that I have been before the people, working for industrial peace, both business and professional men have been saying to me, "Something must be done, Mr. Scullin; something must be done." Here they leave the matter.

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The Fiasco of Prohibition

The national prohibition of alcohol, initiated by the Eighteenth Amendment to the Constitution and enforced via the Volstead Act, stands as an important illustration of the limits to social engineering. Prohibition failed to eliminate alcohol, and even exacerbated many of the social ills related to its consumption, because government is limited both by its knowledge of how people react to regulation and also by the incentives faced by the regulators themselves.

In Last Call: The Rise and Fall of Prohibition, a brilliant and exhaustively researched book, David Okrent examines the forces behind the enactment and repeal of Prohibition as well as its consequences, both intended and unintended. From 1920 until 1933 most Americans were forced to choose between abstinence and illegal consumption. But Americans loved to drink: Per capita alcohol consumption in the nineteenth century was three times today’s rate. It’s no surprise that so many chose to continue their consumption illegally.

If the goal of Prohibition was to eliminate, or even reduce, many of the problems associated with alcohol consumption—such as criminal activity, binge drinking, drunk driving, and deaths and injuries via alcohol poisoning—it was an unambiguous failure. As Okrent illustrates, after 13 years of speakeasies, corrupt enforcement, and criminal empires, the repeal movement had little difficulty in convincing a beleaguered public that Prohibition was a mistake.

However, this is not to say that Prohibition was entirely ineffective. If the goal was to reduce overall consumption of alcohol by increasing its price, Prohibition worked largely as intended. Initial consumption declined to 30 percent of its pre-Prohibition level, though this number rose to 70 percent within three years and stayed roughly at that level by the time of repeal. However, even for its advocates this is an odd measure of success for prohibition. Also worth noting is that repeal did not bring about a significant increase in drinking. Per capita consumption rates did not reach their pre-Prohibition levels until 1973.

Enforcer Colonel Ira L. Reeves bitterly stated at the end of his term that the only thing he had accomplished was that he “had raised the price of alcoholic beverages and reduced the quality.” This was a declaration of frustration and defeat, an admission he had been unable to remove alcohol from the American way of life. In line with this assessment, one of the main lessons Okrent derives from Prohibition is that government cannot effectively legislate against people’s tastes.

Okrent primarily focuses on the battle between the “wet” and “dry” political movements dating from the mid-nineteenth century until the 21st Amendment and the repeal of Prohibition in 1933. Both sides had their share of notable and influential characters, perhaps none more so than the dry Wayne Wheeler, leader of the Anti-Saloon League (ASL). In the history of American politics, no interest group has been as influential as the ASL and few individuals have had as much direct impact on public policy as Wheeler. H. L Mencken, a dedicated wet, wrote of Wheeler: “In fifty years, the United States has seen no more adept political manipulator.”

Wheeler and the ASL, supported primarily by rural Protestant voters, had a stranglehold over Congress and most state legislatures during most of Prohibition. Okrent writes that the Wheeler-led ASL “effectively seized control of both the House and the Senate in the 1916 elections” and did not loosen its grip until the early 1930s.

Perhaps the most enlightening, and disturbing, revelation in the book is how the ASL became the most powerful pressure group the nation had ever known and how the dry movement was able to enforce its will on a population that loved to drink. Most people are familiar with Prohibition-era stories involving corrupt police and politicians taking bribes from bootleggers like Al Capone. What most people are unaware of, however, is just how openly most members of Congress manipulated the political process to push Prohibition on a largely unwilling public.

A primary reason Prohibition happened was that the dry rural voters in favor of it were vastly overrepresented in state legislatures and in Congress. To get an idea of just how overwhelming this discrepancy was, consider that by 1929 a staunchly wet congressional district in Detroit had a population of 1.3 million, while ten separate dry districts in the Missouri had fewer than 180,000 people total. This disparity was the work of dry legislators, who blocked reapportionment and thus denied accurate representation to wet districts that were experiencing unprecedented immigration. Okrent summarizes the significance of the situation aptly: “Never in American history, not even during the tumult of Civil War, had Congress disregarded the constitutional mandate, enunciated in Article 1, Section 2, to reapportion itself following completion of the decennial census. . . . Between 1921 and 1928, forty-two separate reapportionment bills were introduced in the House. Not one became law.”

Although political manipulation was vital to the dry movement, Prohibition would not have passed if not for the support of one of the broadest coalitions in American history. The diverse movement behind the Eighteenth Amendment and the Volstead Act included such groups as the Ku Klux Klan, the American Medical Association, the women’s suffrage movement, and the Industrial Workers of the World, to name a few. Although these groups were diametrically opposed on most issues, each saw potential advantages from Prohibition.

Baptists and Bootleggers and Doctors and Coke

Prohibition provides a clear illustration of one of the basic lessons of Public Choice economics: Interest groups use the political process to concentrate benefits on themselves while dispersing costs on others. The AMA, for example, foresaw the potential for a lucrative business providing prescriptions for alcohol under the Volstead Act for roughly $3 (or about $33 in 2010 dollars). Although in 1917 the AMA ruled that the use of alcohol in therapeutics “has no scientific value,” after two years of Prohibition the organization declared alcoholic beverages to be useful in the treatment of 27 separate conditions including diabetes, asthma, and old age. The AMA’s sudden change in medical advocacy was in line with its self-interest.

The AMA was not alone in this regard. Asa Chandler, the founder of the Coca-Cola Company, was an ardent supporter of Prohibition because he saw the potential to eliminate the competition provided by brewers and distillers. Chandler was rewarded for his vision: Coca-Cola saw sales triple. Charles Walgreen expanded his drug store chain from 20 to 525 stores during the 1920s. Although family historians have credited this expansion to the invention of the milkshake, the profitable trade in medicinal alcohol provides a more likely explanation.

Making Matters Worse

As important as it is to understand how Prohibition passed, it is even more important to understand why it made many alcohol-related problems worse. Prohibition failed in this sense because the policymakers behind it failed to predict how consumers, suppliers, and regulators would respond. Many people continued to drink, and a multitude of bootleggers, violent mobsters, and corrupt politicians were willing to provide a continuous supply.

As with most cases of failed social engineering, the people who advocated Prohibition suffered from a conceit that it would work exactly as intended. The economist Irving Fisher, known for his groundbreaking work on interest rates, claimed in 1919 that Prohibition would increase national output 10–20 percent every year. Although alcohol consumption remained high, Fisher continued to attribute the growth of the 1920s to Prohibition.

Per capita alcohol consumption returned to around 70 percent of its pre-Prohibition levels by 1923 because a multitude of entrepreneurs were willing to operate outside of the law to quench the public’s thirst. The infamous Purple Gang controlled the vast alcohol traffic flowing from Canada through Detroit, while New York mobsters like Charles “Lucky” Luciano launched their long criminal careers in the illicit alcohol trade. The notorious Chicago bootlegger and gangster Alphonse Capone said of his profession, “I give the public what the public wants. I never had to send out high pressure salesmen. Why, I could never meet the demand.”

This is not to say that Capone or his contemporaries were unfamiliar with the use of force. Since Prohibition drove the market for alcohol into the illegal sector, men like Capone had to rely on extralegal measures to enforce contracts and resolve disputes. Sometimes these measures included violence. To get an idea of just how much, consider the homicide rate. In the United States it went from less than 12 per hundred thousand people in 1920 to 16 by the end of Prohibition, then subsided to less than 10 by 1940.

Nonviolent Means

Not all bootleggers were violent, however. Men like Samuel Bronfman and William “Bill” McCoy specialized in the importation of alcohol through ports and border towns all over the country. Once these specialists had evaded or bribed Prohibition agents and local politicians to bring their products into the country, they would sell them to gangsters like Luciano who handled the massive distribution to local speakeasies. New York, for example, had roughly 32,000 speakeasies during the height of Prohibition.

Although some Prohibition agents could not be bought, the prevalence of corruption throughout the era was staggering. Okrent illustrates countless examples of rampant opportunism by Prohibition enforcers. Chicago Mayor Bill Thompson, for example, received more than a quarter of a million dollars directly from Capone’s organization for his 1927 campaign. Ranking police captains amassed bank accounts approaching hundreds of thousands of dollars on salaries ranging from $2,500 to $4,000 a year.

The bootleggers controlling the black market in alcohol were actually more likely to support dry politicians in favor of Prohibition than wet politicians favoring repeal. The logic behind this strategy is simple: Bootleggers and gangsters needed Prohibition to stay in business. If alcohol were legal they would quickly be replaced by legitimate companies. The ideal combination from the criminal perspective was dry policy and corrupt enforcement, and they spent whatever was necessary to make this happen.

To understand why criminals were willing to spend so much to ensure political cooperation and endure work-related hazards like gang warfare, it is necessary to know just how much was at stake. Annual sales of bootleg liquor were estimated at $3.6 billion in 1926, which is roughly $43.4 billion in 2010 dollars. This astounding sum was about the same as the federal budget that year.

Why Not More Violence?

Given the stakes, the real puzzle is why more violence did not occur. Events such as the St. Valentine’s Day Massacre, where Capone’s South Side Gang killed seven rival gangsters, garnered a lot of attention in the national press. The extended periods of peace, stability, and even cooperation that occurred both between and within different criminal enterprises, however, have generally gone unnoticed.

Seattle bootleggers convened in 1922 to set prices and, more important, to establish rules to minimize conflict. Similar meetings occurred in Philadelphia, New York, and other major cities throughout the 1920s. Despite the enormous amount of money at stake, most areas of the country where alcohol remained avoided outright gang warfare.

The fact that economic activity of the same magnitude as the U.S. government could be organized outside of the law is surprising for a number of reasons. Those who choose a life of crime tend to be violent, impatient, and untrustworthy by nature. Despite these obstacles, criminals often discover ways to cooperate on a large scale to capture illicit profits.

Besides the use of violence, how did a bunch of violent, impatient criminals manage such organizational stability? They employed reputation, costly signaling, and constitutions as means to enforce agreements and resolve disputes. Criminals worked hard to avoid conflict where possible because conflict is costly. Gangsters like Capone and Luciano were driven to cooperate with other criminals by the same economic forces underlying cooperation between their law-abiding counterparts.

It is important to understand the robustness of criminal organization for a number of reasons. For one, it explains to a large extent why Prohibition was doomed to failure. If there is a strong enough demand, legal prohibitions on certain goods and services will simply shift markets into the waiting arms of the illegal sector of the economy.

That criminals could engage in complex economic interactions outside of the law also illustrates some important lessons for the robustness of self-enforcing exchange in general. If criminals are capable of overcoming major obstacles to organization and exchange, then conventional arguments that the State is necessary for cooperation and exchange to occur must be reconsidered. Even in an environment of mistrust and violence, firms were formed, contracts were honored, and disputes were mostly settled peacefully. A better understanding of these processes can shed considerable light on the ability of individuals to cooperate and trade in the absence of a formal legal framework.
This is not to say that criminal organization is the pinnacle of achievement in a market economy. On the contrary, the experience of black markets brought about by Prohibition illustrates how inefficient they are relative to markets with well-defined and legally enforceable property rights. Overall quality diminished, while fraud, theft, and violence increased. Criminal cooperation also periodically broke down into outright gang warfare, though as noted, this was generally the exception to the rule. The important lesson, however, is that under Prohibition, criminal suppliers found a way to meet the public’s demand despite all the obstacles they faced.

Although Okrent avoids making any explicit comparison between the prohibition of alcohol and the ongoing prohibition of certain recreational drugs, there are a number of obvious similarities. Criminal organizations continue to provide a seemingly limitless supply of illegal drugs; quality is low, potency is high, and corruption and violence are endemic.

Some 28,000 people have died in the border war between drug cartels and United States and Mexican government agents since 2006. Street gangs continue to battle over territorial distribution rights. As Nobel Prize-winning economist Milton Friedman aptly said, “Al Capone epitomizes our earlier attempts at Prohibition; the Crips and Bloods epitomize this one.”

Examples of Legalization

As was the case with the prohibition of alcohol, advocates of the “war on drugs” often claim that decriminalization would result in a massive spike in drug use. Although it is impossible to know in advance exactly how much consumption would increase, the experience of Portugal could provide some clues.

Since the decriminalization of all drugs there in 2001, user rates have not increased and remain near the lowest in Europe. Sexually transmitted diseases and deaths due to drug usage have decreased significantly (see Glenn Greenwald, “Drug Decriminalization in Portugal: Lessons for Creating Fair and Successful Drug Policies,” Cato Institute, April 2, 2009).

Just as Coca-Cola and the AMA lobbied for alcohol prohibition because it was in their economic interest to do so, a number of groups have a vested interest in the war on drugs. One illustrative example is the California Beer and Beverage Distributors, which donated money to oppose last year’s unsuccessful ballot proposition to legalize marijuana in California. History rhymes in interesting but predictable ways. This behavior is consistent with the lessons of Public Choice. The distributors, like Asa Chandler of Coca-Cola 90 years earlier, see prohibition as a means to eliminate competition.
The unfortunate reality is that despite the diagnosis of failure for prohibitions past and present, policy-makers often prescribe a further dose of the same failed policies. In 1926 Wayne Wheeler said the “very fact that the law is difficult to enforce is the clearest proof of the need of its existence.”

Douglas Rogers

This article was originally published on FEE.org. Read the original article.