The rise and fall of values, according to value!

Via Katherine Mangu-Ward, I read this fun fact:

Regional alcohol prohibition begat national income taxes which begat national prohibition
It's all quite well documented at Smithsonian magazine:
The ASL's [Anti Saloon League's] state-by-state campaign was reasonably effective, particularly in the South. But in 1913, two events led the organization to adopt a new strategy. First, Congress overrode President William Howard Taft's veto of something called the Webb-Kenyon Act, which outlawed the importation of alcoholic beverages into a dry state. The stunning 246 to 95 override vote in the House of Representatives showed not just the power of the anti-liquor forces but also how broadly representative they had become.

The override was followed by enactment of a national income tax authorized by the recently ratified 16th Amendment. Until 1913, the federal government had depended on liquor taxes for as much as 40 percent of its annual revenue. "The chief cry against national Prohibition," the ASL's executive committee said in a policy statement that April, "has been that the government must have the revenue." But with an income tax replacing the levy on liquor, that argument evaporated, and the ASL could move beyond its piecemeal approach and declare its new goal: "National Prohibition, [to] be secured through the adoption of a Constitutional Amendment."

Wow. I had not known that 40% of the country's revenue came from alcohol. Little wonder that it was such major stumbling block to national prohibition. Money talks. And it's easy to understand why the new national income tax took so much of the wind out of the opposition's sails.

While the Smithsonian piece is about a long forgotten lobbyist (Wayne B. Wheeler) who devoted his career to Prohibition as only a single issue fanatic can, it's a very important lesson in how political collusion works -- especially in combination with the unintended consequences of events which would otherwise seem logically unrelated.

The hugely important (and simultaneous) role of women's suffrage is a classic illustration of how two causes assisted each other symbiotically:

A resolution calling for a Prohibition amendment had been introduced in nearly every Congress since 1876, but none had ever emerged from committee. And no version of a female suffrage amendment had gotten as far as floor debate in two decades. But in the congressional session of 1914, both were reported out of committee on the same day.

This was no coincidence. The suffrage movement had long shared a constituency with the anti-liquor movement. Frances Willard and the WCTU campaigned actively for both causes. Susan B. Anthony had first become involved in securing the vote for women when she was denied the right to speak at a temperance convention in 1852 in Albany, New York. By 1899, after half a century of suffrage agitation, Anthony attempted to weld her movement to the Prohibition drive. "The only hope of the Anti-Saloon League's success," she told an ASL official, "lies in putting the ballot into the hands of women." In 1911, Howard Russell's successor as the league's nominal leader, Purley A. Baker, agreed. Women's suffrage, he declared, was "the antidote" to the efforts of the beer and liquor interests.

Nice trick. The suffrage movement fueled Prohibition, and the prohibition movement fueled suffrage.

Unholy alliances worked in collusion, with Prohibition making political bedfellows out of such unlikely partners as the IWW and the Ku Klux Klan:

In fact, Wheeler's devotion to the dream of a dry America accommodated any number of unlikely allies. Billy Sunday, meet pioneering social worker Jane Addams: you're working together now. The evangelical clergy of the age were motivated to support Prohibition because of their faith; reformers like Addams signed on because of the devastating effect that drunkenness had on the urban poor. Ku Klux Klan, shake hands with the Industrial Workers of the World (IWW): you're on the same team. The Klan's anti-liquor sentiment was rooted in its hatred of the immigrant masses in liquor-soaked cities; the IWW believed that liquor was a capitalist weapon used to keep the working classes in a stupor.
And just in the nick of time for Prohibition, the United States entered World War I. This brought anti-German sentiment to a fever pitch, and it was very easy for demagogues to hammer away at the obvious link between Germans and the brewing industry. Pabst, Schlitz, Blatz and Miller thus became a sinister Fifth Column, poised to rot America from within :
A dry Wisconsin politician named John Strange summarized how the ASL was able to use World War I to attain its final goal: "We have German enemies across the water," Strange said. "We have German enemies in this country, too. And the worst of all our German enemies, the most treacherous, the most menacing, are Pabst, Schlitz, Blatz and Miller." That was nothing compared with the anti-German--and pro-Prohibition--feeling that emerged from a Senate investigation of the National German-American Alliance (NGAA), a civic group that during the 1910s had spent much of its energy opposing Prohibition.

The Senate hearings were a disaster for wets. At a time when most Amerians reviled all things German--when the governor of Iowa declared that speaking German in public was unlawful, and playing Beethoven was banned in Boston, and sauerkraut became known as "liberty cabbage"--the NGAA was an easy target. When the hearings revealed that NGAA funds came largely from the beer barons, and that beer money had secretly secured the purchase of major newspapers in several cities, ratification proceeded, said the New York Tribune, "as if a sailing-ship on a windless ocean were sweeping ahead, propelled by some invisible force."

Events conspired to create a perfect storm that propelled the 18th Amendment into being. (Of course, in those days, they had to follow the Constitution and respect the rights of states, which is why I call the 18th Amendment "the telltale amendment.")

In a fascinating irony, "relief" finally came in the form of the Great Depression. Not only were people sick of the law and the crime it brought, but the country desperately needed the revenue.

In fact, just as tax policy, in the form of the income tax amendment, had paved the way for Prohibition, so did it shape Prohibition's eventual death. Rampant criminality, epidemic disrespect for law and simple exhaustion had turned much of the country against the 18th Amendment by the late '20s, but the arrival of the Great Depression sealed the deal. As income tax revenues plummeted along with incomes, the government was running on empty. With the return of beer alone, Franklin Roosevelt said during his 1932 campaign, the federal treasury would be enriched by hundreds of millions of dollars.
It wouldn't surprise me if FDR got a lot of votes just for advocating repeal. Some new deals are irresistible.

Reading through the details of the rise and fall of Prohibition, I'm struck by how little people have changed. Whether that's optimism or pessimism, I don't know.

Not that my feelings matter, but I feel strangely optimistic.

posted by Eric on 04.27.10 at 01:15 PM





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Comments

America has always been and remains a nation of sots pontificating about vice. Prohibition was in some ways a well-earned bite in the ass.

Brett   ·  April 27, 2010 01:57 PM

Bootleggers and Baptists!

http://www.cato.org/pubs/regulation/regv22n3/bootleggers.pdf

Yandle also looks at this in relation to the push for climate legislation in another article:

http://www.perc.org/pdf/ps14.pdf

RickC   ·  April 27, 2010 02:00 PM

People haven't changed in forever.

Reading Roman and Greek historians I'm always amused by exactly how little we've changed.
People acted exactly the same then as now.

How is people freaking out about Global Worming and how WE'RE ALL GONNA DIE!!!!! any different from Europeans freaking out about how Jesus was coming back in the year 1,000 and THEY WERE ALL GONNA DIE!!!?

Natural occurrences are signs of the end times now as ever, the only difference is that we're less afraid of eclipses and comets.

Is a state charging a toll to drive through their "road" any different from some warlord charging to use his stretch of river?


The thing that makes us look superficially different is a greater knowledge base.
And most of the world uses that knowledge to strengthen their grip on power, just as people have always done.

Veeshir   ·  April 27, 2010 02:44 PM

Charging tolls to drive on a limited-access, high-speed highway is better than making the taxpayers at large pay for it. Why should I be taxed to pay for interstates I never use and am forbidden to walk or ride a bicycle on?

Our highway system is our biggest welfare queen-5.7 million miles of limited-access road that requires gold-plated maintenance.

Stop tax funding of ALL transportation and let the user pay the costs. Let taxes fund only the streets necessary for ingress and egress, that everyone can walk, drive, or cycle on.

And watch how fast people get their teens out of cars and cut their own driving, and move back to dense neighborhoods and start riding public transit when they see what it really costs to maintain 8-lane freeways.

De-fund and de-monopolize the transit agencies, and CXL all subsidies to airlines and railroads, direct and indirect. That will be the total death knell for airlines, which get $14 Billion a year in subsidies tossed at them, in addition to airports built by civic authorities whose subscription fees don't begin to cover their costs. Meanwhile, while we de-subsidize the rails, we can also deregulate them, remove the oppressive 50s era rail regulations designed to murder them. Let the users pay the full costs of both rails and airlines, and see who wins.

Laura Louzader   ·  April 27, 2010 05:09 PM

I'm optimistic about how pessimistic things actually are.

Shawn DeFroida   ·  April 27, 2010 10:42 PM

Charging tolls to drive on a limited-access, high-speed highway is better than making the taxpayers at large pay for it. Why should I be taxed to pay for interstates I never use and am forbidden to walk or ride a bicycle on?

The NYS Thruway was supposed to be toll free in 1980.
Now they use the tolls to pay for all manner of non-Thruway-related things.

NH does not have income tax, they do charge to use their stretch of interstate, this is used for all manner of things not 495 related.

It costs nearly $10 to drive through a 10-20 mile, pothole-ridden, section of 95 in Delaware.

There's three prime examples of tolls being used in exactly the same manner as some Goth barbarian charging for using his ford over the Rhine.

Veeshir   ·  April 28, 2010 02:35 PM

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