That amused his class very much, for he was as far from a revolutionary as you could expect. But I would like to say that if that time comes when there are two great parties, Anarchists and Socialists, then I am a Socialist. (Quoted in I. N. Fisher 1956, 44)
Fisher’s initial position on alcohol problems was that education of the youth was the best solution. Alcohol had its grip on drinkers, just as opium had its grip on dope fiends. The older generations would have to be forgotten, with all efforts concentrated on the youth. In an address to the students of Oberlin College in the spring of 1912, he summarized his position on intoxicants: “But what is the normal use of these things (beer, whiskey, opium, hashish, and tobacco)? According to the best light scientifically that has been shed on them, the normal use is none at all, and if that is so those who see it should not be ashamed to live up to their ideal any more than they should be ashamed to live up to the Ten Commandments” (quoted in I. N. Fisher 1956, 152–53). In testimony before the Subcommittee on Excise and Liquor Legislation for the District of Columbia (1912) he stated: “After making what I believe was a thoroughly disinterested study of the question, . . . I came personally very strongly to the conclusion, on the basis of statistics as well as on the basis of physiology that alcohol so far as we can observe its effects, is an evil and no benefit” (quoted in I. N. Fisher 1956, 153–54). Later he became convinced that antisaloon legislation would be necessary to supplement education efforts, and he was converted to prohibition by the “success” of state prohibitions.
During World War I, Fisher volunteered his services to the Council on National Defense, where he was assigned the task of establishing wartime policy on alcohol. Under his direction the council recommended wartime prohibition and dry zones around all army cantonments. The alcohol interests blocked the first measure, which Fisher supported because he considered the war an excellent opportunity to experiment with prohibition. Fisher also surmised that this defeat provided the necessary impetus to bring about prohibition in 1920.9
It was as an indirect result of this second defeat of War-time Prohibition that Constitutional Prohibition came about! The brewers found that, unwittingly, they had jumped out of the frying pan into the fire!
The reason was that the Senators who had acceded to President Wilson’s request to withdraw the War-time Prohibition clauses from the Food Act thereby so disappointed and angered their dry constituents that these Senators felt constrained to do something to set themselves right. (I. Fisher 1927, 10–12)
Fisher’s books on Prohibition are empirical examinations of social statistics such as alcohol consumption, criminal activity, and health. In his first book, Prohibition at Its Worst (1927), Fisher spoke for himself and was the most confrontational. In Prohibition Still at Its Worst (1928) and The “Noble Experiment” (1930), he replaced this style with a seemingly more balanced approach in which he presented both “wet” and “dry” views on various issues and empirical points.
In the first book, Fisher laid out his assumptions, or “great facts” which constituted his general plan of analysis. He purported to show that Prohibition was imperfectly enforced, that its results were not as bad as reported, and that it had in fact accomplished much good. He found the personal-liberty argument against Prohibition an illusion. Further, he argued that the Volstead Act could not be amended without violating the Eighteenth Amendment, that the Eighteenth Amendment could not be repealed, and that its nullification would be the worst possible disrespect of the law. Finally, he asserted that the “only practical solution is to enforce the law” ([1926] 1927, 18–19).
Much of Fisher’s work involves disputes over statistics. Still, he can be credited to a large extent with developing the major issues concerning prohibition, organizing the debate between wets and drys, and establishing the criteria by which future prohibitions would be judged. A detailed examination of Fisher’s work on prohibition would take a book-length treatment in itself. A critique of some of Fisher’s conclusions and suggestions, however, provides a sampling of his shortcomings.
Fisher apologized in later writings for failing to recognize the merits of private prohibition. Before the turn of the century, employers commonly supplied employees with alcohol rations on the job. After 1900, most manufacturers, with their complex and dangerous production processes, did away with alcohol rations, often replacing them with rules against drinking. These changes occurred at a time when courts and state legislatures were increasingly holding employers responsible for injuries to employees.
Fisher seemed puzzled by the distinction between public and private prohibition and by “wet” support for private prohibition but not for that decreed by the government. The fact that changes in the economy made private prohibition economical for some employers seems lost on him. He later admitted that private prohibitions were more effective than the law. “Largely because of the penalties of the workmen’s compensation and employers’ liability laws, and from considerations of output requirements, the situation has brought about a more absolute form of Prohibition, privately enforced, than that embodied in the Eighteenth Amendment or the Volstead Act” (I. Fisher 1930, 443). This not only indicates that Fisher was in part blind to the market process, it also undermines the empirical analysis throughout his work and that of others. The desirable results of private prohibition and employment policy cannot be attributed to Prohibition.
Fisher felt that public opinion was firmly behind Prohibition because of the increased mechanization in society. He contended that machinery and automobiles could not be safely used after one consumed alcohol. This argument, however, is no better than arguing for a prohibition of cars without considering the costs involved and alternative solutions. Fisher also argued that other systems, such as the ones adopted in Canada (government dispensary) and Great Britain (taxation and regulation), were worse, or at least no better, than Prohibition. Here he was comparing his perceptions of what foreign systems were like in practice with his perception of what American Prohibition would be like if it were “properly enforced.”
Fisher argued that consumption of alcohol declined during Prohibition, and several estimates support the view that alcohol consumption per capita did decline. Still, many important questions—how much did consumption decline? what were all the causes for this decline? how did individual consumption patterns change? what type of alcohol was consumed? and what happened to consumption of substitutes?—remained largely unanswered and even unasked. He also contended that the decrease in alcohol consumption fostered economic progress. Although the claim that Prohibition had caused the economic prosperity of the 1920s was discarded with the onset of the Great Depression, his beliefs concerning industrial productivity and absenteeism are still used to inflate estimates of the economic losses from drug use and the potential benefits of prohibition.
In discussing the substitutes for alcohol, Fisher focused on the automobile, radio, and motion-picture industries. In a passage that reads more like a sermon than a tract on economics, he noted that the increased specialization in the economy (apparently also a contribution of Prohibition) allowed for the relief of misery. He considered all substitutes for alcohol as good, and he completely ignored the fact that such substitutes generally resulted in less value for the consumer and might result in a type of substitute that Fisher himself would lament. According to the limited references to narcotics in his writings, Fisher apparently thought that Prohibition had reduced the sale of narcotics and that they might not be as damaging as alcohol.
Fisher felt that Prohibition had worked better than could be expected “hygienically, economically, and socially.” The main problem was that it was poorly enforced, particularly in the big cities. He claimed that Prohibition worked where it was properly enforced. Fisher supported a complete reorganization of enforcement at all levels, the hiring of better enforcement officials, and large increases in expenditures on enforcement.
In his final contribution on Prohibition (1930), Fisher uncharacteristic
ally compromised with the wets by supporting the “right” to home production and consumption. He claimed that legalizing home production would reduce the requirements on law enforcement and eliminate the personal-liberty argument from the public debate. It is unclear whether Fisher used this as a last-ditch effort to save Prohibition or if he realized its futility. He admitted that such a modification would decrease the number of opponents of Prohibition by “thousands, if not millions” and would allow law enforcement to concentrate on bootleggers without compromising the closure of saloons. He also made one statement admitting the infeasibility of prohibition: “Yet, it is absurd to expect home production to be prevented by enforcement officers” (1930, 454). Both the admission of the infeasibility and the compromise are unique statements from Fisher, and they appear only on the last page of his last book on Prohibition.10
Fisher’s methodology was poorly suited to a proper assessment of prohibition, particularly when combined with his religious-like zeal to eliminate the use of alcohol and to increase life expectancy. In theoretical matters, Fisher began with the distinction between desires (demand) and attainment of actual satisfaction. His personal impatience, his concern over mortality, and his interest in eugenics and genetic engineering may have contributed to his distinction between desire and attainment of value.
One of the points which I look back upon with satisfaction is that I repudiated the idea of [William Stanley] Jevons that economics was concerned with a “calculus of pleasure and pain” and I insisted there was a great distinction between desires and their satisfactions and that economics had to do only with desires, so far as the influence of market prices was concerned.
But one should be more interested in truth than in who desires the credit for first reaching it. Ever since my six years of illness I have become much more interested in promoting the truth than in claiming credit or even in adding to knowledge. There is so much knowledge already attained that is not yet applied that I have often set myself to work to bring that knowledge to the attention of others.
Today I would like to see a study, partly economic and partly psychological, showing how the human animal following his desires often misses satisfactions instead of attaining them. The star example is narcotics. (Quoted in I. N. Fisher 1956, 339)
No matter how real or important the distinction between desire and attainment of satisfaction is, economists such as Joseph Schumpeter have found that in Fisher’s case “the scholar was misled by the crusader.” Or as G. Findly Shirras noted, “The drawback to a completely rational mind is that it is very apt to assume that what is flawless in logic is therefore practicable” (quoted in I. N. Fisher 1956, 193–94).
Fisher was much more apt to rely on “facts” and available statistics than on the logic of cause and effect. In the preface to The Making of Index Numbers, he illustrated his reliance on statistics and the inductive method by noting: “The present book had its origin in the desire to put these deductive conclusions to an inductive test by means of calculations from actual historical data. But before I had gone far in such testing of my original conclusions, I found to my surprise, that the results of actual calculations constantly suggested further deduction until, in the end, I had completely revised both my conclusions and my theoretical foundations” (quoted in I. N. Fisher 1956, 194–95). This illusion of facts hampered Fisher’s work on index numbers, monetary theory, and proposals for monetary reform, as well as his understanding of the “new economic era” and Prohibition. A colleague of Fisher’s at Yale, Ray Westerfield, developed this and other related points in a memorial article.
Fisher was never content to stop with scientific research; he was imbued with an irresistible urge to reform, along lines indicated by his studies. For example, having seen and felt the evils of unstable money and having discovered the causes and cures, he was determined to do all he could to make it stable.
Unfortunately his eagerness to promote his cause sometimes had a bad influence on his scientific attitude. It distorted his judgement; for example, he was carried away by his “new economic era” ideas in the late 1920s and lost his fortune. . . . He relied upon concomitancy too much in his belief that the stability of the price level from 1925 to 1929 was due to Federal Reserve action and refused to give due recognition to other factors at work. (Quoted in I. N. Fisher 1956, 193)
Fisher’s conclusions and convictions guided the statistical studies that gave him faith in the attainment of his goals in matters of monetary policy and prohibition. The fall of Prohibition at the bottom of the Great Depression must have made for dark days for this well-intentioned reformer. He retired from academic life shortly thereafter but continued as an active reformer and contributor to public debate.
PROHIBITION’S BLUE MONDAY
While Fisher was beginning to realize some of the negative consequences of Prohibition, professional economists and the general public were becoming increasingly aware of the costs and ineffectiveness of the “noble experiment.” Two noteworthy examples of economists who examined Prohibition and found Fisher’s position less than accurate were Clark Warburton and Herman Feldman.
In Prohibition: Its Economic and Industrial Aspects (1930) Herman Feldman, an otherwise undistinguished economist, published an important contribution to the statistical investigation of the “economic” aspects of Prohibition.11 His book is based on twenty articles written for the Christian Science Monitor, and the statistical information derives from a detailed survey. The book is most impressive in its caution concerning the use of survey data, statistical analysis, and the conclusions made throughout the book.
His book is noteworthy for its criticism of Fisher’s estimate of the economic loss due to the consumption of alcohol, despite the fact that Feldman was writing for the Christian Science Monitor, a champion of Prohibition.
Even the writings on prohibition by some distinguished economists show a certain freedom from scientific restraint not normally found in their discussions of other subjects. One of the most curiously constructed statistical statements, for example, is that by which Professor Irving Fisher, of Yale, deduces that prohibition has been worth at least $6,000,000,000 a year to this country. This figure, widely quoted, has often been used as if it were a painstaking, scientific calculation based on a meticulous combing of economic data. On the contrary, it is merely a guess, and of a type frequently issued by groups with propaganda in mind, but hardly to be expected from one who has achieved world-wide prominence as a statistical economist. (Feldman 1930, 5)
Fisher’s estimate was based on uncontrolled experiments on the effect of alcohol on industrial efficiency. These experiments were made on one to five individuals who took strong doses of alcohol on an empty stomach before beginning work. These “studies,” some of which were based solely on the effects of alcohol on the experimenter himself, found that average efficiency was reduced by 2 percent per drink. Fisher then assumed a dosage of five drinks per day and extrapolated the loss of total efficiency per worker to a 10 percent reduction in efficiency. If alcohol consumption by workers could be reduced to zero, Fisher estimated, the country could save at least 5 percent of total income, or $3,300,000,000. The elimination of the alcohol industry would also save an additional 5 percent in national income as resources would be transferred out of alcohol production and into other goods and services. Feldman noted that a 2 percent loss in efficiency could be caused by “a mere depressing thought,” and that Fisher failed to account for the fact that most alcohol consumed by the working class was beer with meals hours before work. Indeed, historical experience suggests that alcohol was consumed on the job in order to increase the overall efficiency of production. “It will require experiments on a far larger scale, and under much more rigorously controlled conditions than those now recorded, to determine the effect of alcoholic beverages upon industrial efficiency with the definiteness expressed. The experiments, considered solely as bases for the economic calculations made [by Fisher], are inconclusive of themselves” (Feld
man 1930, 240–41).
Feldman was also known for his survey of absenteeism. He surveyed industrialists concerning the absence or tardiness of workers on Mondays and the days following paydays. The survey asked whether the respondents felt Prohibition was the cause of any noticeable reduction in absenteeism. Information on the relationship between alcohol consumption and absenteeism prior to Prohibition was not available.12 Of the 287 responses to Feldman’s survey, less than half felt that there was considerable improvement in absenteeism. One-third of the respondents who did detect decreased absenteeism failed to attribute this improvement to Prohibition. Some employers even reported higher absenteeism and attributed the increase to Prohibition. One employer noted that “the stuff available to labor, and there is plenty of it, is so rotten that it takes the drinking man two or three days to get over his spree” (Feldman 1930, 211).
Feldman himself described some of the faults of the survey method, such as personal or political bias in completing the forms, and he cautioned against a strict interpretation of the results. Other points of contention with the conclusions of the survey were that private prohibition and stricter employer liability and negligence laws all contributed greatly to reducing absenteeism. Improved safety conditions, higher wage rates, reduced working hours, and more formal labor contracts also improved attendance. On the other hand, booming standards of living and new leisure alternatives, such as the automobile, also influenced absenteeism during the 1920s.
Table 1. Absenteeism Rates in a Delaware Gunpowder Plant
The Economics of Prohibition Page 3
