DOCSLIB.ORG

The Economics of Prohibition the Economics of Prohibition

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
The Economics of Prohibition the Economics of Prohibition The Economics of Prohibition The Economics of Prohibition Mark Thornton University of Utah Press Salt Lake City Copyright © 1991 University of Utah Press All rights reserved o° The paper in this book meets the standards for permanence and durability established by the Committee on Production Guidelines for Book Longevity of the Council on Library Resources Library of Congress Cataloging-in-Publication Data Thornton, Mark. The economics of prohibition / Mark Thornton. p. cm. Includes bibliographical references and index. ISBN 0-87480-375-6 (alk. paper). — ISBN 0-87480-379-9 (pbk. : alk. paper) 1. Prohibition—Economic aspects. 2. Prohibition—Economic aspects—United States. 3. Narcotics, Control of—Economic aspects— United States. 4. Drug traffic—Economic aspects—United States. 5. Narcotics and crime—Economic aspects—United States. I. Title. HV5O88.T48 1991 338.4'336341'0973—dc2O 91-50333 CIP Contents Foreword vii Acknowledgments ix Introduction 3 1. ECONOMISTS AND PROHIBITION 9 The Origins of the "Economics" of Prohibition 11 In Defense of Prohibition 15 Prohibition's Blue Monday 23 The Economics of Heroin Prohibition 29 The Economics of Addiction 35 2. THE ORIGINS OF PROHIBITION 39 The Prohibition of Alcohol 40 National Narcotics Prohibition 56 National Marijuana Prohibition 65 3. A THEORY OF PROHIBITION 71 The Basic Analytics of Prohibition 73 The Political Economy of Prohibition 84 4. THE POTENCY OF ILLEGAL DRUGS 89 The Economics of Potency 92 Prohibition as a Tax 93 The Impact of Prohibition on Potency 95 Potency in Prohibited Markets 99 Alcohol Prohibition 100 The Prohibition of Marijuana: A Simple Test 105 Beyond Cannabis 108 VI 5. THE CORRUPTINGEFFECTS OF PROHIBITION 111 Crime 113 Corruption 126 6. THE REPEAL OF PROHIBITION 139 Is Effective Prohibition Possible? 142 Alternative Policy Regimes 146 The Free-Market Solution 149 The Extended Free-Market Solution 151 References 155 Index 167 FIGURES 1. Prohibition's Impact on the Consumer and Producer 74 2. The Traditional Approach for Determining the Optimal Level of Prohibition Enforcement 76 3. The Process of Progressive Interventionism (and exit) 84 4. Effect of Improved Technology for High-Potency Drug Production 92 5. Federal Budget for Enforcement of Drug Laws, 1973-1984 106 6. Average Potency of Marijuana, 1973-1984 108 7. The Impact of Prohibition on the Consumption of Heroin 118 8. Prohibition's Impact on the Heroin Addict's Budget Constraint 118 9. Prohibition's Impact on (addict-related) Criminal Activity 119 10. Federal Convictions of Public Officials, 1970-1988 128 TABLES 1. Absenteeism Rates in a Delaware Gunpowder Plant 26 2. Average Annual Percentage-Point Decline in Absenteeism in a Delaware Gunpowder Plant 29 3. Shipping the Good Apples to New York 94 4. Federal Expenditures upon the Enforcement of Prohibition 100 5. Fisher's "Alcohol Price Index," 1916-1928 102 6. The Effect of Prohibition on Alcohol Expenditures 103 7. Per Capita Consumption of Alcoholic Beverages in Gallons,1840-1919 104 Foreword oreign wars come and go, but the Drug War is a constant of U.S. Fdomestic policy. For nearly eight decades the government has attempted to prevent American citizens from using one or more illicit substances. By the 1980s the government's efforts had become truly draconian: more than one million drug arrests annually; minimum drug sentences that exceed the average punishment for murderers and rapists; increasing numbers of wiretaps; property confiscations and home evictions based on mere suspicion of drug use; ever more warrantless searches as part of the constantly expanding "drug exception" to the Fourth Amendment; growing involvement of the Central Intelligence Agency, Department of Defense, and National Guard; citywide curfews; and proposals for everything from shooting down unidentified planes at the border to declaring martial law. Yet these efforts have yielded few positive results. The U.S. now has more than one million people in prison, yielding the highest rate of imprisonment in the industrial world. Young blacks are more likely to die in gun battles in the criminal underground, funded by drug prohibition, than they were while serving in the army in Vietnam. Drug users seeking to pay the inflated prices of illegal substances commit thousands of property crimes in cities and their suburbs. Children, who receive lesser criminal punishments, are increasingly recruited into the drug trade, where many become users. Moreover, the law appears to have stopped few people from trying illicit substances. According to the National Institute on Drug Abuse, 74.4 million people over the age of 12 have tried drugs, despite decades of drug prohibition. Nearly 27 million use illegal substances viii The Economics of Prohibition at least once a year. Rates of drug use are now falling, but the declines started before the periodic escalations of the drug war during the 1980s. Given this record, it is time to fundamentally reevaluate America's drug policy. To do so risks attack from publicity-minded drug czars and vote-seeking politicians. But not to do so acquiesces to a policy that is needlessly imprisoning, maiming, and killing tens of thousands of people for voluntarily using and selling substances that are demonstrably less harmful—particularly in the number of deaths they cause—than the legal drugs alcohol and tobacco, the latter of which is subsidized by the federal government. Courageously picking up the gauntlet tossed down by the drug war lobby is Mark Thornton. In a debate more often marked by emotion than facts, Professor Thornton looks at how illegal drug markets, for alcohol as well as today's disfavored substances, really work. Particularly important is his conclusion that such problems as crime and corruption are natural outgrowths of drug prohibition, not drug use. As a result, the deaths of innocent bystanders in drug dealers' gun battles, for example, create an argument for drug legalization, not stricter enforcement. Many readers may nevertheless disagree with Professor Thorn- ton's conclusions. But they will still have an obligation to respond to his evidence that the costs of prohibition are huge and obvious, while the benefits are few and dubious. The burden of proving Professor Thornton wrong, and thereby justifying continuation of the drug war, now rests on those who oppose drug legalization. Cato Institute DOUG BANDOW Acknowledgments uring my study of prohibition I have been helped by many Dfriends and colleagues. Their encouragement, suggestions, and corrections made this book possible. My gratitude and respect go to John D. Jackson, who provided the critical guidance so crucial to the completion of this project. The unceasing stream of comments and suggestions from Richard D. Ault and Leland B. Yeager contributed both insights and a broad perspective. Seth A. Anderson provided valuable suggestions and encouraged me in my efforts to find a publisher. It is to the credit of my teacher, coauthor, colleague, and friend Robert B. Ekelund, Jr., that the lessons and debates in his classroom turned my question into an answer—an answer that forms the foundation of this book. I owe a special debt to the University of Utah Press, whose staff had the courage and foresight to bring this book to fruition. I am also grateful to the distinguished group of reviewers assembled for this project—Bruce Benson, Charles Maurice, and Murray Roth- bard—each of whom provided valuable comments and corrections. Three institutions have provided support for this project. The Institute for Humane Studies at George Mason University provided my initial exposure to classical liberalism and academic research. I wish to offer my thanks for the 1990 F. Leroy Hill Summer Faculty Fellowship, and I give special thanks to Sheldon Richman for his assistance in preparing this manscript for publication. I also wish to acknowledge the H. B. Earhart Foundation for its financial assistance during the preparation of this book. IX x The Economics of Prohibition My very special thanks go to the members and staffof the Ludwig von Mises Institute. The intellectual environment, continuous encouragement, and financial support they provided were invaluable. For their assistance and faith in me, I would especially like to thank Llewellyn H. Rockwell and O. P. Alford III. It is my hope that the publication of this book begins to repay all those who have shown so much confidence in me. Introduction rohibition has an ever-increasing impact on our daily life. In the PUnited States, prohibition against certain drugs, involving "wars" on them, has become one of our most visible and hotly debated national problems. The purpose of the following investiga- tion is to improve our understanding of the origins and results of prohibition, and therefore indirectly to contribute to future policy- making, shifting it toward rationality. At the core of this book, one of the first theoretical investigations of prohibition, is an economic theory of prohibition, which defines prohibition as a government decree against the exchange of a good or service. Recent studies of decrees against cocaine, heroin, and mari- juana suggest that these prohibitions impose heavy costs and are extremely difficult to enforce. Beyond such costs and enforcement difficulties, however, I argue that effective prohibition is impossible to achieve, because the unintended consequences of prohibition itself preclude any benefits. The only long-term solution to the problems engendered by the "misuse" of a product, I maintain, is legalization of that product. With legalization, as opposed to decriminalization and other forms of government interventionism, the government treats the misused product or service as if it were soybeans, computer chips, or pencils. The market is controlled by self-interest and normal legal constraints, such as product-liability law. This book may be viewed as a challenge to prohibitionists to present a theory that describes the benefits of prohibition. It may also be seen as a challenge to those who recommend that prohibition be replaced with some form of decriminalization.
Load more

Recommended publications
  • 56Va L Rev971 1970 PART1.Pdf
    +(,121/,1( Citation: 56 Va. L. Rev. 971 1970 Content downloaded/printed from HeinOnline (http://heinonline.org) Wed Aug 18 15:04:09 2010 -- Your use of this HeinOnline PDF indicates your acceptance of HeinOnline's Terms and Conditions of the license agreement available at http://heinonline.org/HOL/License -- The search text of this PDF is generated from uncorrected OCR text. -- To obtain permission to use this article beyond the scope of your HeinOnline license, please use: https://www.copyright.com/ccc/basicSearch.do? &operation=go&searchType=0 &lastSearch=simple&all=on&titleOrStdNo=0042-6601 VIRGINIA LAW REVIEW VoLuME 56 OCTOBER 1970 NUMBER 6 THE FORBIDDEN FRUIT AND THE TREE OF KNOWLEDGE: AN INQUIRY INTO THE LEGAL HISTORY OF AMERICAN MARIJUANA PROHIBITION Richard J. Bonnie* & Charles H. Whitebread, II* * Mr. Snell. What is the bill? Mr. Rayburn. It has something to do with somethhzg that is called marihuana.I believe it is a narcotic of some kind. Colloquy on the House floor prior to passage of the Marihuana Tax Act. *Assistant Professor of Law, University of Virginia. B.A., 1966, Johns Hopkins University; LL.B., 1969, University of Virginia. "'Assistant Professor of Law, University of Virginia. A.B., 1965, Princeton Uni- versity; LL.B, 1968, Yale University. We wish to express our sincere appreciation to the students who assisted us in the preparation of the tables at Appendix A. Because the drug statutes of the several states are particularly confusing and difficult to find, and because so many jurisdictions have recently changed their drug laws, the preparation of the chart required long, tedious work which so many were kind enough to perform.
    [Show full text]
  • A General Model of Illicit Market Suppression A
    ALL THE SHIPS THAT NEVER SAILED: A GENERAL MODEL OF ILLICIT MARKET SUPPRESSION A Dissertation submitted to the Faculty of the Graduate School of Arts and Sciences of Georgetown University in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Government. By David Joseph Blair, M.P.P. Washington, DC September 15, 2014 Copyright 2014 by David Joseph Blair. All Rights Reserved. The views expressed in this dissertation do not reflect the official policy or position of the United States Air Force, Department of Defense, or the U.S. Government. ii ALL THE SHIPS THAT NEVER SAILED: A GENERAL MODEL OF TRANSNATIONAL ILLICIT MARKET SUPPRESSION David Joseph Blair, M.P.P. Thesis Advisor: Daniel L. Byman, Ph.D. ABSTRACT This model predicts progress in transnational illicit market suppression campaigns by comparing the relative efficiency and support of the suppression regime vis-à-vis the targeted illicit market. Focusing on competitive adaptive processes, this ‘Boxer’ model theorizes that these campaigns proceed cyclically, with the illicit market expressing itself through a clandestine business model, and the suppression regime attempting to identify and disrupt this model. Success in disruption causes the illicit network to ‘reboot’ and repeat the cycle. If the suppression network is quick enough to continually impose these ‘rebooting’ costs on the illicit network, and robust enough to endure long enough to reshape the path dependencies that underwrite the illicit market, it will prevail. Two scripts put this model into practice. The organizational script uses two variables, efficiency and support, to predict organizational evolution in response to competitive pressures.
    [Show full text]
  • Cantillon and the Rise of Anti-Mercantilism
    CANTILLON AND THE RISE OF ANTI-MERCANTILISM MARK THORNTON* Resumen: En este trabajo se pretende demostrar que Cantillon formó parte tanto del pensamiento como del movimiento antimercantilista de su época, influyendo en gran medida en el cambio de opinión en contra del mercantilismo que se fue fraguando de 1720 a 1734. Clasificación JEL: B110, B31, N010. Abstract: This article places Cantillon at the center of anti-mercantilist thought and the anti-mercantilist movements in London and Paris between the time of the Bubbles of 1720 and his murder in 1734 and it places his ideas at the turning point between the eras of mercantilism and antimercantilism. JEL classification: B110, B31, N010. «It seems to me that there is a connection between physiocracy and anti-mercantilism, or at any rate between Boisguilbert (1646-1714) and Quesnay (1694-1774), though it is not easy to say just what this connection was.» Martin Wolfe1 «In itself Cantillon’s (168?-1734?) was a contribution of real significance, and it would be difficult to find a more incisive prophet of nineteenth-century liberalism.» Robert B. Ekelund, Jr. and Robert F. Hébert2 * Dr. Mark Thorntorn, Senior Fellow, Ludwig von Mises Institute, [email protected] 1 Martin Wolfe, «French Views on Wealth and Taxes from the Middle Ages to the Old Regime,» Journal of Economic History 26 (1966): 466-483. 2 Robert B. Ekelund, Jr. and Robert F. Hébert. A History of Economic Theory and Method (New York: McGraw-Hill, 1975): 44. Procesos de Mercado: Revista Europea de Economía Política Vol. VI, n.º 1, Primavera 2009, pp.
    [Show full text]
  • New Perspectives on Political Economy Monetary Reform – The
    ISSN 1801-0938 New Perspectives on Political Economy Volume 5, Number 2, 2009, pp. 111 – 128 Monetary Reform – The Case for Button-Pushing Philipp Bagus JEL Classification: E50, P11, P21, P31 Abstract: In this paper I present a monetary reform plan that seeks to achieve a sound monetary system. I suggest the following three criteria of a good reform: it must be ethical, it must be based on sound economic theory and it must leave room for evolutionary processes. Based on these criteria and applying them to the monetary system, I argue for an immediate cancellation of all government intervention into the monetary realm. Assistant professor at Universidad Rey Juan Carlos, Madrid, [email protected]. I would like to thank William Barnett II, Walter Block, Barbara Hinze, Guido Hülsmann and Mark Thornton for helpful comments and the Ludwig von Mises Institute for financial help. 112 New Perspectives on Political Economy 1 Introduction In a previous paper (Bagus, 2008), I presented the proposals for monetary reform of- fered by the Austrian economists Ludwig Mises, Murray N. Rothbard, Jesús Huerta de Soto and Hans Sennholz. Their aim is a more stable monetary system that permits monetary freedom. Without questioning the aim, I set out to criticize the way that those outstanding economists proposed to get to their aim. In fact, Mises, Rothbard, Huerta de Soto and Sennholz offer plans of monetary reform that entail numerous state interventions into the economy, inconsistencies, arbitrariness, and tactical am- biguities. Their proposals contradict their own ethical and political principles, only partially resulting in monetary reform.
    [Show full text]
  • Black Market Peso Exchange As a Mechanism to Place Substantial Amounts of Currency from U.S
    United States Department of the Treasury Financial Crimes Enforcement Network FinCEN Advisory Subject: This advisory is provided to alert banks and other depository institutions Colombian to a large-scale, complex money laundering system being used extensively by Black Market Colombian drug cartels to launder the proceeds of narcotics sales. This Peso Exchange system is affecting both U.S. financial depository institutions and many U.S. businesses. The information contained in this advisory is intended to help explain how this money laundering system works so that U.S. financial institutions and businesses can take steps to help law enforcement counter it. Overview Date: November Drug sales in the United States are estimated by the Office of National 1997 Drug Control Policy to generate $57.3 billion annually, and most of these transactions are in cash. Through concerted efforts by the Congress and the Executive branch, laws and regulatory actions have made the movement of this cash a significant problem for the drug cartels. America’s banks have effective systems to report large cash transactions and report suspicious or Advisory: unusual activity to appropriate authorities. As a result of these successes, the Issue 9 placement of large amounts of cash into U.S. financial institutions has created vulnerabilities for the drug organizations and cartels. Efforts to avoid report- ing requirements by structuring transactions at levels well below the $10,000 limit or camouflage the proceeds in otherwise legitimate activity are continu- ing. Drug cartels are also being forced to devise creative ways to smuggle the cash out of the country. This advisory discusses a primary money laundering system used by Colombian drug cartels.
    [Show full text]
  • Economía Política
    PROCESOS DE MERCADO REVISTA EUROPEA DE ECONOMÍA POLÍTICA Procesos de Mercado Yeso y pigmentos sobre tela y madera Julio Toquero, 2005 “Subyace en este cuadro una reflexión relativa al cambio, a la energía —acción vigorosa— y a la consciencia: realidades fundamentales en los procesos de mercado y en el arte”. PROCESOS DE MERCADO REVISTA EUROPEA DE ECONOMÍA POLÍTICA VOLUMEN X, NÚMERO 1, PRIMAVERA 2013 REVISTA SEMESTRAL PUBLICADA POR UNIÓN EDITORIAL, CON LA COLABORACIÓN DE LA FACULTAD DE CIENCIAS JURÍDICAS Y SOCIALES DE LA UNIVERSIDAD REY JUAN CARLOS HIMNO Dio, che nell’alma infondere Dios, que has querido poner amor volesti e speme, en nuestra alma el amor y la esperanza, desio nel core accendere debes alumbrar en nuestro corazón tu dei di libertà. el deseo de libertad. Giuramo insiem di vivere Juramos juntos vivir e di morire insieme. y morir juntos. In terra, in ciel En la tierra, en el cielo ... congiungere ci può, ... reunirnos podrá, ci può la tua bontà. podrá tu bondad. Ah! Dio, che nell’alma infondere ¡Ah!, Dios, que has querido poner amor volesti e speme, en nuestra alma el amor y la esperanza, desio nel core accendere debes alumbrar en nuestro corazón tu dei di libertà. el deseo de libertad. Don Carlo (1884), GIUSEPPE VERDI (Dúo de Don Carlo y Don Rodrigo, final de la Escena Primera, Acto Segundo) © 2004, Jesús Huerta de Soto Unión Editorial, S.A. © 2004, Unión Editorial, S.A. Martín Machío, 15 ISSN: 1697-6797 28002 Madrid Depósito legal: M-17.229-2004 Tel: 91 350 02 28 • Fax: 91 181 22 12 Correo: [email protected] Administración de Procesos de Mercado: www.unioneditorial.es c/o Jesús Huerta de Soto Universidad Rey Juan Carlos Diseño y Maquetación: JPM GRAPHIC, S.L.
    [Show full text]
  • Tesis 2015 Version 97 Vale
    UNIVERSIDAD COMPLUTENSE DE MADRID FACULTAD DE CIENCIAS ECONOMICAS Y EMPRESARIALES Departamento de Historia e Instituciones Económicas I TESIS DOCTORAL Fundamentos teóricos de la controversia entre Hayek y Keynes. Dos visiones acerca del orden económico y la historia MEMORIA PARA OPTAR AL GRADO DE DOCTOR PRESENTADA POR Pablo Losoviz Adaui Director Fernando Méndez Ibisate Madrid, 2017 © Pablo Losoviz Adaui, 2015 UNIVERSIDAD COMPLUTENSE DE MADRID FACULTAD DE CIENCIAS ECONÓMICAS Y EMPRESARIALES DEPARTAMENTO DE HISTORIA E INSTITUCIONES ECONÓMICAS I FUNDAMENTOS TEÓRICOS DE LA CONTROVERSIA ENTRE HAYEK Y KEYNES. DOS VISIONES ACERCA DEL ORDEN ECONÓMICO Y LA HISTORIA. TESIS DOCTORAL DE: PABLO LOSOVIZ ADAUI DIRIGIDA POR: FERNANDO MÉNDEZ IBISATE MADRID, 2015 © Pablo Losoviz Adaui, 2015. Agradecimientos y dedicatorias. En primer lugar deseo agradecer a mi tutor de Tesis, D. Fernando Méndez Ibisate, el cual al plantearle que deseaba realizar una investigación sobre el ciclo económico me sugirió que profundizara sobre el debate sostenido entre F. A. Hayek y J. M. Keynes. Sin duda que el provecho que he obtenido a lo largo de estos años de investigación abarca mucho más que simplemente el fenómeno del ciclo y solo espero que, aunque sea en cierta medida, en este trabajo de investigación haya quedado reflejado. En varios de los puntos de esta tesis sin mencionar explícitamente el problema de las crisis y fluctuaciones económicas el lector podrá observar sugerencias sobre el mismo de suma importancia. Realmente lo que se ha intentado es situar el debate entre Hayek y Keynes dentro de la órbita de la historia del pensamiento económico y en particular sobre la percepción filosófica y metodológica que juega la concepción de la Historia en ambos.
    [Show full text]
  • An Examination of the Legal Marijuana Use Age and Its Enforcement in California, a State Where Recreational Marijuana Is Legal
    An examination of the legal marijuana use age and its enforcement in California, a state where recreational marijuana is legal March 2021 James C. Fell NORC at the University of Chicago Traci Toomey University of Minnesota Angela H. Eichelberger Insurance Institute for Highway Safety Julie Kubelka NORC at the University of Chicago Daniel Schriemer Darin Erickson University of Minnesota Contents ABSTRACT .................................................................................................................................................. 3 INTRODUCTION ........................................................................................................................................ 4 METHOD ..................................................................................................................................................... 6 Enforcement of minimum legal marijuana use age of 21 (MLMU-21) laws ...................................... 6 Pseudo-underage patron entry attempts ............................................................................................... 7 Sample design ............................................................................................................................ 8 Recruitment of pseudo-underage patrons ................................................................................. 9 Data collection protocol ............................................................................................................ 9 RESULTS ..................................................................................................................................................
    [Show full text]
  • Profile.Indd
    uddenly, an explosion rips through the Congress Apartments. The ground shakes as bricks fly like cannonballs from the back of the one-story building Swhere a massive hole has opened. Inside the small apartment, two state prohibition agents scramble, alive but shaken. The explosion was no accident, rather a hit ordered by outlaw moonshiners on the agents who worked as enforcers of unpopular prohibition laws. Welcome to Bend circa 1926, where lawlessness and old school retribution put even lawmen in the line of fire. The brazen bombing is believed to have been payback for the killing of a local moonshiner just a few weeks earlier east of Bend. Despite much publicity at the time, the crime remains unsolved to this day. Ninety-one years later, Bend Police cold case detectives PHOTO DESCRIPTIONS HERE Sgt. Devin Lewis and Lt. Jason Maniscalco are looking at crime scene photos from the dynamiting of Congress Itaturitecab ipsae namus essitas dolorpossit porrum A ninety-year-old failed hit on prohibition Apartments in downtown Bend. estemporem hicatures imagniet, a voluptation cus “Look, the whole back wall is gone,” said Lewis. “I’ve agents in Bend remains a mystery. dis doluptas utaecae. Nam, ut fuga. Inulluptae. Ipsae never heard about this case before.” quaeptatquia se sandaestis aut magnatem que cum Although there were never Al Capone-Elliot Ness styled licil molore, quam quissusa shootouts between the police and moonshiners, Bend was a rough and tumble town in its early days. Loggers and blue-collar millworkers supplied a ready and thirsty market for moonshiners eager to skirt the state and federal laws banning the production and sale of alcohol.
    [Show full text]
  • Murray N. Rothbard: an Obituary
    MurrayN. Rothbard , IN MEMORIAM PREFACE BY JoANN ROTHBARD EDITED BY LLEWELLYN H. ROCKWELL, JR. Ludwig von Mises Institute Auburn, Alabama 1995 Copyright © 1995 by the Ludwig von Mises Institute, Auburn, Alabama 36849-5301 All rights reserved. Written permission must be secured from the publisher to use or reproduce any part of this book, except for brief quotations in critical reviews or articles. ISBN: 0-945466-19-6 CONTENTS PREFACE, BY JOANN ROTHBARD ................................................................ vii HANS F. SENNHOLZ ...................................................................................... 1 RALPH RAIco ................................................................................................ 2 RON PAUL ..................................................................................................... 5 RICHARD VEDDER .................•.........•............................................................. 7 ROCER W. GARRISON .................................................................................. 13 WALTER BLOCK ........................................................................................... 19 MARTIN ANDERSON •.•.....................................•........................................... 26 MARK THORNTON ..................................................................•.................... 27 JAMES GRANT .............................................................................................. 29 PETER G. KLEIN .........................................................................................
    [Show full text]
  • Listening to the RUMRUNNERS: Radio Intelligence During Prohibition This Publication Is a Product of the National Security Agency History Program
    Listening to the RUMRUNNERS: Radio Intelligence during Prohibition This publication is a product of the National Security Agency history program. It presents a historical perspective for informational and educational purposes, is the result of independent research, and does not necessarily reflect a position of NSA/CSS or any other U.S. government entity. This publication is distributed free by the National Security Agency. If you would like additional copies, please email your request to [email protected] or write to: Center for Cryptologic History National Security Agency 9800 Savage Road, Suite 6886 Fort George G. Meade, MD 20755-6886 David Mowry served as a historian, researching and writing histories in the Cryptologic History Series. He began his Agency career as a linguist in 1957 and later (1964-1969) held positions as a linguist and cryptanalyst. From 1969 through 1981 he served in various technical and managerial positions. In the latter part of his career, he was a historian in the Center for Cryptologic History. Mr. Mowry held a BA with regional group major in Germany and Central Europe from the University of California at Berkeley. He passed away in 2005. Cover: The U.S. Coast Guard 75-ft. patrol boat CG-262 towing into San Francisco Harbor her prizes, the tug ELCISCO and barge Redwood City, seized for violation of U.S. Customs laws, in 1927. From Rum War: The U.S. Coast Guard and Prohibition. Listening to the Rumrunners: Radio Intelligence during Prohibition David P. Mowry Center for Cryptologic History Second edition 2014 A motorboat makes contact with the liquor-smuggling British schooner Katherine off the New Jersey coast, 1923.
    [Show full text]
  • Forbidden Transactions and Black Markets
    Forbidden Transactions and Black Markets Chenlin Gu,∗ Alvin E. Roth,y and Qingyun Wuzx Abstract Repugnant transactions are sometimes banned, but legal bans sometimes give rise to active black markets that are difficult if not impossible to extinguish. We explore a model in which the probability of extinguishing a black market depends on the extent to which its transactions are regarded as repugnant, as measured by the proportion of the population that disapproves of them, and the intensity of that repugnance, as measured by willingness to punish. Sufficiently repugnant markets can be extinguished with even mild punishments, while others are insuf- ficiently repugnant for this, and become exponentially more difficult to extinguish the larger they become. (JEL D47, K42, P16) Keywords: black market; repugnance; Markov process. 1 Introduction Why are drug dealers plentiful, but hitmen scarce? I.e. why is it relatively easy for a newcomer to the market to buy illegal drugs, but hard to hire a killer? Both of those transactions come with harsh criminal penalties, vigorously enforced: In the U.S., half of Federal prisoners have drug convictions,1 and murder for hire is treated ∗DMA, Ecole Normale Sup´erieure,PSL Research University, Paris 75230, France (email: chen- [email protected]). yDepartment of Economics, Stanford University, Stanford, CA 94305, United States (email: al- [email protected]). zDepartment of Economics, and Department of Management Science and Engineering, Stanford University, Stanford, CA 94305, United States (email: [email protected]). xWe thank Itai Ashlagi, Fuhito Kojima, Jean-Christophe Mourrat, Muriel Niederle, Andrei Shleifer, Gavin Wright, Zeyu Zheng and Zhengyuan Zhou for helpful discussions.
    [Show full text]