AAWE, Economics Dept, New York University, 19 W 4th St, 6Fl., New York NY 10012aawe@wine-economics.org


Last Call: The Rise and Fall of Prohibition
Sribner, New York, 2010, 468 pp.
ISBN 978-0-7432-7702-0

Reviewer: Orley Ashenfelter

Prohibition, that period between 1920 and 1933 when the manufacture, sale, import or export of “intoxicating liquors” was forbidden in the U.S., has produced a remarkable set of historical myths. Daniel Okrent’s inspiring new book reveals many of them. Here are some examples:

Myth 1—“Eliot Ness and the Untouchables put Al Capone out of business.” Well, actually, Capone’s bootlegging operation in Chicago was never shut down. Moreover, Ness, who died as a semi-drunken mess, had nothing to do with Capone’s final conviction, which was for income tax evasion.

One of the most interesting facts about Prohibition is that alcoholic beverage consumption and production continued during the entire period of its existence. Although Okrent refers to the work of Miron and Zweibel on alcoholic beverage consumption during Prohibition, his quite exhaustive research seems to have missed the main basis for their work: a truly remarkable book, The Economic Results of Prohibition, by Clark Warburton. This book, published in 1932, was Warburton’s doctoral dissertation at Columbia University. His advisors Arthur Burns, Wesley Claire Mitchell, Harold Hotelling, and Joseph Dorfman make up an all star economic team if ever there was one. The primary finding of the book, which is based on a careful examination of indirect indicators of production and consumption, is that alcohol consumption by the late 1920s was only about one-third below its pre-World War I high. From my reading of Warburton’s work, it is not even clear that consumption of alcohol was any lower by the late 1920s than it would have been absent Prohibition. For example, alcoholic beverage consumption declined by 40% in England and Wales and by 20% in Denmark in the same period, but there was no Prohibition in those countries. The use of modern methods of program evaluation might usefully be applied to reconsider this issue.

Myth 2—“It was illegal to drink alcohol during Prohibition.” Well, actually, it was never illegal to drink alcoholic beverages; it was only illegal to sell them. One of the most fascinating aspects of Prohibition that Okrent explains with care is that it was most successful when it was not enforced too rigorously, nor taken too seriously. To that end the framers of the 18th Amendment made it clear that penalties would be for the saloons, not their customers. Indeed, the Amendment was written so as not to go into effect until one year after its ratification, which permitted the distillers to sell off their stocks and their customers to fill their cellars for the coming dry season.

Myth 3—“The California wine grape industry was destroyed by Prohibition.” Well, actually, the California grape business never had it better than during Prohibition! The Volstead Act, which implemented prohibition, effectively permitted each family to make 100 gallons of wine per year legally. The result was a phenomenal boom in grapes produced to ship to the East coast. In fact, Warburton estimates, based on the dramatic increase in grape production during the 1920s, that the per capita consumption of wine actually increased by 65% as a result of Prohibition.

Despite the boom, Okrent also points out one key fact about grape production that had a very deleterious and long lasting effect on the California wine industry. Because the grapes California growers produced had to be shipped across the entire U.S., they specialized in the production of grapes that satisfied that purpose. Sadly, these grapes, typically the ubiquitous Alicante Bouchet, while suitable for the home wine makers back East, were not quite what wine connoisseurs had in mind. It took many decades, and the constant urging of people like Maynard Amerine, the distinguished University of California at Davis professor of enology, to move production to the quality wine that the state now produces.

There are so many other myths that Okrent reveals that it sometimes seems impossible to believe how bamboozled all of us have been. No, Joe Kennedy was not a bootlegger; Franklin Roosevelt was not a wet hero (as a young senator he sponsored a Prohibition bill for New York!); and Herbert Hoover regularly stopped on his way home from work in Washington for a drink at the Belgian Embassy!

In broad terms, Okrent makes a convincing case that the conjunction of women’s suffrage, the legalization of the income tax, and the U.S. entry into World War I set a congenial political environment for a change with unintended consequences that it took a decade to appreciate. The result was a disaster by nearly every measure possible. The proof of this lies in the evidence that living through the Prohibition ordeal actually changed the minds of voters and of their representatives. Of the 22 senators still in the Congress who had voted for Prohibition, 17 changed their minds and voted for its Repeal 16 years later. It is hard to imagine a more dramatic reversal of political fortunes. This book is an extraordinary accomplishment, both scholarly and readable.

Orley Ashenfelter
Princeton University