The end of Prohibition and two great monetary thinkers
Today it is 80 years ago that US alcohol prohibition was ended. Interestingly enough two of my favorite monetary thinkers of the time - Irving Fisher and Clark Warburton - had strong views on prohibition. Hence, Irving Fisher was a strong advocate of prohibition, while Clark Warburton was strongly against prohibition. I would especially encourage everybody to have a look at Clark Warburton's empirical work on prohibition in his Ph.D. dissertation, which was published as The Economic Results of Prohibition in 1932 - one year ahead of the end of prohibition. Fisher and Warburton had very similar - monetarist - views on monetary policy and theory, but they certainly did not agree on prohibition. Later an other monetarist - Milton Friedman - picked up on a similar theme and he was very outspoken against the US War on Drugs. As I noted in my previous post I believe that an end to the War on Drugs would be a quite positive supply shock to the US economy and would improve US public finances. The end of prohibition in 1933 likely had a similar positive effect on the US economy, but unfortunately other regulations such are the National Industrial Recovery Act (NIRA) had much more negative supply effects. Said in another way Roosevelt was right on alcohol and money, but wrong on nearly everything else. I I stole this picture from Cato Institute. Here is what Cato's David Boaz has to say about the day to day.