Abstract: Prohibition by the Numbers: Economic Thought and the Rise and Fall of the Eighteenth Amendment

Kyle Stein

Abstract

Historians of prohibition have thoroughly discussed the institutional, political, and organizational factors that enabled the passage of national prohibition in 1919 and its ultimate repeal in 1933. While these histories provide in-depth analyses of prohibition and anti-prohibition organizations, they fail to highlight the connection between prohibitionist ideology and developments in economic thought during the first decades of the twentieth century. This paper aims to examine prohibition through an economic framework and argues that supporters on both sides of the prohibition debate relied on economic logic to support their arguments. Focused on both the microeconomic and macroeconomic impact of alcohol consumption prohibition supporters argued that worker intoxication decreased wages, lessened worker efficiency, reduced savings, and promoted workplace accidents. In making these arguments, prohibition supporters linked alcohol consumption to both economic development and national prosperity.

In addition, by couching arguments about prohibition in economic terms, actors involved in the prohibition debate highlighted and complicated key contemporary developments in economic thought and praxis. Economists in the late nineteenth and early twentieth centuries developed various new forms of economic thought and statistical analysis. Most importantly, neoclassical economists like Irving Fisher promoted an understanding of personal consumption based on individual utility and personal liberty. Despite these beliefs numerous neoclassical economists used newly created statistical tools and economic logic to promote prohibition. This apparent disagreement complicates the role of economic thought in the prohibition movement and illustrates the inherently malleable nature of statistical analysis.