Fun Feature: Pictures from Alcohol Prohibition

Capitallism is not to blame for the situation in which we find ourselves, mercantilism verging on oligarchy is. We've not yet had pure laizze faire capitalism. From the very beginning of our nation, there have been powerful people who worked against that direction, even some of our Founding Fathers -- Hamilton comes immediately to mind. Cast the blame where it really belongs, at the feet of politicians and Big money.

It may be beneficial to distinguish between Capitalism and the Economic Laws that govern man, and even more beneficial to recognize Prohibition for what it is.

(I recommend some Milton Friedman or the book "The Economics of Prohibition" by Mark Thornton.)

First of all, Prohibition is in its core Socialist. It is about the State intervention in the drug markets, and it's about the kind of people who think the State ought to regulate the individual health and behavior of the citizens because they regard these "aggregate entities" like the Public Health, the Public Good, the Majority and the nation's Productivity the proper level of analysis. In essense this is about the core principle that the State owns the individual, hence can claim something to be a crime, because hurting yourself (or taking a risk) is the same as hurting the State, hence a "real crime", because you "hurt" someone/something more important than yourself.

Secondly, Capitalism - or market economy - is all about those precious rights and freedoms. Capitalism would take away your freedom by selling only Coca Cola, but Capitalism isn't really into Drug Wars as such. Left to itself the drug market wouldn't have been THAT lucrative and hence not a very big interest of companies.

Thirdly, however, we must consider the Economic Laws. What they state in their most simple expression is that humans are rational, self-interested individual - or at least they try their best to act on what they believe is true. What economic theory can explain and predict with uncanny precision is what happens when the State interferes and changes incentives. State intervention in the drug markets, unbeknownst to most, started way back in the 1800's and changed the opportunities for profits greatly - and as often happens: introduced some pretty perverse incentives here and there.

The results of this intervention often lead to more frustration and crazy behavior, starting an unending spiral of increasingly interventionist government, finally culminating in the early 1900's alcohol Prohibition. What is often the case is that Capitalist companies do not really CAUSE the kind of legislation we expect from Prohibition, but when State intervention CREATES a potential for profit those companies will grab the opportunity (which is why the big pharma welcomed e.g. Harry Anslingers heavy control of the medical companies - before that many doctors made their own medicine and sold it to their patients; I can recommend "Drug Crazy" by Mike Gray in this regard).