Friday marked the 75th anniversary of the end of Prohibition. Notice I use a capital ‘P’ in Prohibition, because lowercase prohibition is still alive and well.

For 13 years the 18th Amendment prohibited the manufacture, sale and distribution of alcohol, with trivial exceptions. The results were clear: a modest reduction in consumption, but also a significant increase in both the number of alcoholics and fatalities from contaminated liquor. It also created a black market, which lead to the rise of Al Capone and organized crime.

It turns out that, when you ban a substance, the net effect is a lot more complicated than just the predicted drop in use. Yes, there was less alcohol consumption. Prices rose significantly as predicted, and as predicted consumption went down. But demand didn’t completely go away. The rise in prices, unsurprisingly, served to attract new producers into the market. The fact that it was an illegal market insured that those with the least respect for the law were most likely to enter.

The high risk/high reward environment not only insured that competition would be fierce and deadly, but also that the product itself would be much more potent. Because of the uncertainties of smuggling and the ever increasing risk of police interception with every shipment, suppliers needed every shipment to be carrying the maximum value possible.  They weren’t going to risk getting caught just to sell cheap beer.  This is a large reason why there was an increase in the actual number of alcoholics.

What’s the relevance of all this today?  Isn’t Prohibition over with, never to return?  Unfortunately, the lessons of prohibition are very relevant to today.  Complete alcohol prohibition is unlikely to ever return, but there is a neoprohibition movement working away at the edges of legal drinking.

Restrictive state laws distort the market, enforcing a three-tiered system of alcohol distribution.  Granted significant government protections, middlemen distributors account for a significant percentage of the cost of alcohol, while taxes also raise costs by 20%.  Direct sale from manufacturers to retailers, or consummers is banned.  Wine is a notable exception, as direct sale has been allowed recently in many states, though often times they engage in protectionism that restricts consumer choice.

The attacks on legal drinking includes arresting citizens just for being drunk in bars.  Thousands of individuals have been nabbed by the Texas Alcoholic Beverage Commission in sting operations.  These people have done nothing wrong. They did not drive drunk, get in a fight or otherwise harm anyone.  Texas, however, thinks they are criminals.

The fascist attack on drinkers isn’t the only prohibition movement alive in the modern day.  There’s a well-funded and highly visible tobacco prohibition movement.  Fatty foods are also under attack, which achieved a temporary success with Chicago’s fois gras ban. Other movements have achieved even more success.  There’s currently a blanket prohibition on prostitution,  with the predictable result being the rise of a criminal class (pimps) and increased exposure to disease from those who (unsurprisingly) ignore the ban.

Worst of all, however, is the current prohibition on drugs.  Everything that went wrong with alcohol prohibition is being repeated with the drug war.  The rise of drug cartels and gangs is a direct result of the prohibition.  Our southern neighbor is seeing the worst of it, as Mexico is quickly turning into the next Colombia.  Chaos next door is a security threat to America.

While trillions of dollars have been spent on the drug war (which far exceeds the economic costs of drug use), little good has come from it.  Drugs are much stronger than they would otherwise be (if not for the drug war, there likely would have never have been such a thing as crack cocaine).  Police officers are becoming ever more corrupted by the fight, as happened during prohibition.  They are also increasingly militarized, executing raids on low level users (and often innocents) that result in numerous unjustified deaths every year.  Our prison’s are overflowing with non-violent offenders, and our court system is choking on the backlog.

So while we raise our glasses to celebrate the end of one of the worst legislative mistakes in American history, let us try and learn from it.  Prohibition was wrong in 1920, and it’s wrong in 2008.