15. An Idea to Save Society’s Morals Leads to the Creation of American Organized Crime
In 1919, America had a seemingly laudable idea that backfired spectacularly. That year, Congress passed the National Prohibition Act, which went into effect the following January. It was a bold moral policing experiment, that turned out to be disastrous. Until then, American organized crime was relatively insignificant. City gangs existed, but they consisted of street hoods whose reach and influence seldom stretched beyond a few blocks. That changed dramatically, starting on January 16th, 1920, when Prohibition went into effect, banning the manufacture, transport, or sale of alcohol.
Making alcohol illegal did not reduce public demand for booze. What it did was alter societal attitudes, and create an environment of widespread tolerance of crime in order to provide the public with the alcohol it wanted. By making booze illegal, Prohibition took a major American industry that had operated legally until then, and gifted it – along with its enormous and now untaxed revenue – to criminals. Relatively well-regulated (and taxed) enterprises that had operated the American alcohol industry were driven out of business, to be replaced by organized crime.