Prohibition and Finance

How many dollars flowed through the illegal liquor, beer & wine business in 1929? Historians assure us that liquor consumption did decrease by as much as 40% under the dry law. Supposing that to be true we could use 60% of the ASL guesstimate as a proxy for the volume of liquids. But making a thing illegal is one of the most effective ways to raise its price. Marijuana prices have fallen by roughly 2 orders of magnitude after decriminalization in some areas, but beer doesn’t grow on bushes.

My estimate after 20 years of gathering figures is that beverages became four times as expensive under prohibition. Applying that multiple to 60% of the guesstimated 1914 liquor total yields 4.2 billion gold dollars. But the U.S. population had grown dramatically between the night of January 16, 1920 and the unleashing of Herbert Hoover and the 5&10 law upon the corn sugar and yeast industry that produced at least 80% and possibly as much as 95% of all the illegal beverage consumed occurred in 1929. Adding the effect of the 14% population growth that decade gives $4.8 billion. So how does that dollar amount compare to the size of the U.S. economy of 1929? (Hint: it was more than the Federal budget–about 5% of GNP). The Wickersham Commission, appointed to downplay the total, came up with a slightly smaller figure. Clark Warburton, the economist who coined “Gross National Product,” came up with a slightly higher figure.

That’s right. Gangland trafficpreneurs had more income from liquor alone than the Federal Government got from corporate and individual income taxes, customs tariffs and the squeeze put on States. God fights on the side with the biggest budget, so of course repeal won, thanks to the Liberal Party repeal plank.

Find out the juicy details behind the mother of all economic collapses. Prohibition and The Crash–Cause and Effect in 1929 is available in two languages on Amazon Kindle, each at the cost of a pint of craft beer.

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The Visible Hand

The visible hand is the one that’s invisible to Socialist congregants… it holds a deadly weapon. 

unproductivehandsmith

Adam Smith’s formulation of the forgotten, unproductive and withering hand of parasitism

Every socialist, communist and miscellaneous looter is fond of reciting Smith’s mention of the visible “invisible hand” of freedom, for it gives the impression of mystical superstition and life-after-death as the basis for valuing freedom as opposed to coercion. When was the last time you saw THIS tidbit of Adam Smith’s writings?

But if we consider the matter more closely, we shall find that this interested diligence of the clergy is what every wise legislator will study to prevent; because, in every religion except the true, it is highly pernicious, and it has even a natural tendency to pervert the truth, by infusing into it a strong mixture of superstition, folly, and delusion. Each ghostly practitioner, in order to render himself more precious and sacred in the eyes of his retainers, will inspire them with the most violent abhorrence of all other sects, and continually endeavour, by some novelty, to excite the languid devotion of his audience.

William Graham Sumner’s original formulation of The Forgotten Man included a cast of four characters: A and B, who put their heads together to decide what C shall be forced to do for D. “C” is the Forgotten Man, the robbery victim, the slave. The Forgotten Hand is an appendage of which of these characters?

The Forgotten Hand, the one holding the gun, belongs to B–the man A sends to rob C in order to pay the both of them for pretending to be doing something benevolent for D. “B” is a gang of government agents, paid to believe that whatever “A” decides is good enough to kill for, nothing more. “A” is the real culprit. “A” is the Congress that assures the crowd that freedom is selfish, that only the terrified, fearing for their lives, can be generous (or else!).

“A” is also the voter who elected to send men with guns out to take someone else’s money by force. Why? So that A and B can preen and strut as beacons of selfless nobility and disinterested altruism. In the Republican version “A” is the Congress, “B” is the IRS and DEA, CIA, FATF, AML, TF, CFT, DNFBP, IRS-CID, INL, ICRG, GIABA, GAFISUD, FSRB, FIU, FinCEN, EAG. In the Democratic Party version, “B” is the IRS and FDA, HEW and an alphabet soup of other, equally unproductive parasites.

These are the armed and infatuated ruffians who arrogate the power to destroy wealth in furtherance of some scheme of  expropriation. A “protective” tariff, such as caused the Rebellion of 1776, the Nullification Crisis, then the Civil War, is promptly countered by speculation in smuggling. Smith described the economic results of an entrenched kleptocracy’s resort to asset forfeiture:

By the ruin of the smuggler, his capital, which had before been employed in maintaining productive labour, is absorbed either in the revenue of the state, or in that of the revenue officer; and is employed in maintaining unproductive, to the diminution of the general capital of the society, and of the useful industry which it might otherwise have maintained.

The domino effect of confiscation, withdrawal of deposits, collapse of credit, liquidity crises and widespread bankruptcies brought about by Presidents HarrisonHoover, Reagan, Bush and Bush Jr is simply the reaffirmation of what Adam Smith wrote in 1775, and Ayn Rand improved and set on an ethical footing in 1957. There, too, was The Forgotten Hand:

I mean that I hold the upper hand!”
“With a gun in it?”
“Oh, forget about guns! I—” 

If you want to change America back into a free country, consider making a small donation to the State Libertarian Party in places like Oklahoma, Ohio and Alabama. This is easy to do over the internet using a PayPal account (except to the suicidal Travis County Libertarian Party).

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