Prohibition as economic folly
In the episode on the worst economic mistakes of the twentieth century, Bob Zadek introduces Prohibition as the first item the guest’s book takes up, noting its parallel in 2014 to the drug wars and its direct relationship to the income tax. He asks Burton Abrams to explain from an economic standpoint why Prohibition was damaging, why it failed as policy, and why it made the list of top ten economic follies Worst Ten Economic Mistakes of the 20th Century (2014).
Abrams describes alcohol consumption as fairly widespread in the United States at the turn of the century, with many immigrants arriving from Eastern Europe and Southern Europe where drinking beer and wine was an everyday occurrence. He says a number of people in the country, mostly rural Protestants, found this a threat to their way of life and were able to muster forces to pass a constitutional amendment prohibiting the sale and distribution of alcohol. Abrams states that this set in motion negative consequences that haunted the economy for some 14 years, and he lists them: disrespect of the law, a tremendous rise of organized criminals, wealthy organized criminals, bribery of government, prisons filled with convicted alcohol smugglers, and general disrespect for the law. He characterizes the activity as fairly widely desired by the public at large and the amendment as an attempt by the government to impose a government standard of morality held by a small minority.
Zadek draws out a core principle: that any law criminalizing behavior most people think is not criminal is bad policy, and that you cannot affect the majority’s natural behavior by making an act criminal. He groups immigration laws and drug laws with Prohibition as statutes that criminalize activity most people think is okay, and argues that making an otherwise neutral activity criminal — neutral in the sense that it does not harm somebody else — creates disrespect for the law, turns otherwise honest, law-abiding citizens into criminals, and disrupts the social fabric as well as producing economic costs like incarceration, trial, and enforcement. He asks whether the economic cost ultimately caught up with the country and Prohibition was repealed, and answers his own question in the affirmative. Abrams confirms that it was repealed by another constitutional amendment, which he calls the only constitutional amendment to be repealed.
The amendment as a contrast to the Controlled Substances Act
In the 2017 episode on the drug war, Jeffrey Miron uses the 18th Amendment to distinguish alcohol prohibition from federal drug prohibition. He notes that in the alcohol case Congress and the country adopted an amendment giving Congress the authority to outlaw intoxicating liquors, and observes that some libertarians would argue that even a constitutional amendment of that kind was inconsistent with other parts of the Constitution and therefore highly problematic. Setting that aside, he says Congress at that point at least recognized that the Constitution gives the federal government only a small number of explicitly enumerated powers — making war, coining money, raising taxes in certain ways — and does not give it arbitrary power to do all the things it has been doing for the last 100 years, in particular the authority to outlaw a particular substance. With the explicit amendment, he says, it did have the authority to ban alcohol Miron vs. Sessions on the Drug War (2017).
Miron contrasts this with drugs: there has never been any constitutional amendment giving Congress the authority to outlaw drugs, and so many constitutional scholars, and certainly libertarians, would argue that the Controlled Substances Act, which bans drugs under federal authority, is itself unconstitutional and should be stricken down. He adds that under existing interpretations the federal government can enforce its federal prohibition in the various states, and that a federal officer who identifies someone possessing or trafficking an outlawed drug has authority under the Controlled Substances Act and its sequelae to enforce federal law on citizens of any state. But that does not mean states have to criminalize it themselves or cooperate with federal enforcement; states are absolutely entitled to repeal their own laws outlawing drugs. He notes that during alcohol prohibition a whole bunch of states never outlawed alcohol, including many of the more populous states, and enforcement came only from the federal government.
Zadek asks how states can legally decriminalize marijuana if it is a federal crime, and whether federal law prevails. Miron’s answer is that federal law does not require states to criminalize drugs. The exchange turns to the federal government’s limited ability to force states to enforce drug prohibition, and the policy of returning proceeds from seized assets to cooperating state and local agencies as a way of enticing cooperation. Zadek supplies the term “equitable sharing,” which Miron confirms, and Zadek describes it as encouraging municipalities and state governments to enforce federal drug laws by confiscation of property, with states retaining a portion of confiscated property that would otherwise go to Washington — in broad terms, “policing for profit.” Zadek says the federal government lacks a federal police force in theory and lacks the resources to enforce its own laws, so it must dragoon or incentivize state and local governments by almost bribery, hiring them as subcontractors.
Repeal and residual state power over alcohol
In the 2022 episode on California’s food fight, Richard Epstein explains that alcohol was subject to the 18th Amendment when prohibition took place, and that this was undone with the 21st Amendment, which gave states residual power — exclusive power, in his phrasing — over the sale of wines within their own borders California’s Food Fight (2022). He says this creates a constitutional authorization for giving local preference, and that the tension between that authorization and the general law of interstate commerce makes for a trickier kind of case. He agrees with Zadek in the end that arguments that such restrictions are rampant discrimination are beginning to gain traction, and thinks these kinds of restrictions are likely to disappear whether as a political or a legal matter.
Epstein also discusses Wayfair, which he says involved the question whether local states can impose a user tax on goods shipped within their states or whether this was blocked by the Dormant Commerce Clause. He says the Supreme Court through Justice Kennedy held that everybody is entitled to do this because otherwise there is a tax abuse, and that now everybody has managed to impose taxes on just about everybody else, hurting the interstate market. He mentions Champion v. Ames from 1903 or so, where lottery tickets legal in New York where they are made and legal in Pennsylvania where they are sold raised the question whether the federal government could prevent their shipment in interstate commerce on the grounds that they are illegal when sitting in the train; the Supreme Court said it could impose those kinds of restrictions. Epstein says most people, himself included, think it a wrong distinction, but it shows the problem was important very early on, and that within a couple of years you pass the Food and Drug Administration and the same reasoning applied to lottery tickets is applied to drugs.
Zadek closes with an observation about bacon runners driving to the Nevada-California border somewhere around Truckee and emptying the trunk of their car with bacon grown illegally in South Carolina, with people in trench coats paying cash — what he says is in store for the residents of California.
The legalism fallacy
In the 2023 episode on immigration, Alex Nowrasteh defines the “legalism fallacy” as the assumption that a policy is good because it is legal — a focus on legal issues that ignores mainly the consequences American anxiety about immigration is unwarranted. Here’s why. (2023). He says that in immigration it means people focus on the fact that there is a lot of illegal immigration but never deal with its consequences or what causes it, and rarely with what could be done to make immigration more legal and whether the consequences of that policy are good. He says it crushes interesting debate about what policy should be and focuses on everybody pretending to be a lawyer.
Zadek puts flesh on the bones with the 18th Amendment: drinking alcohol became illegal, and that did not seem to make it bad to use alcohol, nor did anybody believe Prohibition was a really good idea simply because it was a law. He extends the thought to the Constitution itself — women did not have the right to vote, slavery was legal — and concludes that the law is neither good nor bad per se, but good or bad as it complies with a view of what society and life in the country should be like. He then turns to what is wrong with the law regulating immigration now.
Across episodes: the amendment as a recurring benchmark
The 18th Amendment appears in four episodes across nine years, and the treatment shifts with the argument each guest is making rather than developing a single line. Abrams in 2014 treats it as an economic folly whose costs — organized crime, bribery, prisons filled with smugglers, disrespect for law — accumulated until repeal. Miron in 2017 treats it as the constitutionally proper way to ban a substance, and uses the absence of any comparable amendment for drugs to argue that the Controlled Substances Act is unconstitutional. Epstein in 2022 treats the 18th and 21st Amendments together as the source of residual state power over alcohol, which complicates Dormant Commerce Clause analysis of wine shipping. Zadek in 2023 treats it as the illustration of the legalism fallacy. What changes is not the assessment of Prohibition but the work the amendment is asked to do: economic cautionary tale, constitutional contrast, federalism complication, and finally a lesson about conflating legality with soundness.
What the sources do not cover
The excerpts do not state the year the 18th Amendment was ratified or the year it was repealed, nor the amendment number that repealed it beyond Abrams’s reference to “another constitutional amendment” and Epstein’s mention of the 21st. They do not give the text of the amendment, the name of the enabling statute, or the vote margins in Congress or the states. Abrams’s discussion breaks off mid-sentence at a section heading, and several other sections in the source excerpts are labeled but empty, so no content from those portions is reflected here.