This message from Robert Gordon was posted on EH.net yesterday:
Ken Burns’ anticipated three-part series on “Prohibition” runs this coming Sunday, Monday, Tuesday on PBS at 8pm E/P and 7pm central. I wanted to call it to the attention of the economic history community.
I would judge from the long interview with him and his co-producer 9/30 on “Chicago Tonight” that this series is not just a lot of crime-oriented documentary footage, but also probes into fairly significant issues in American political and cultural history. His description of the absolutist non-compromising approach of the prohibition movement sounds a lot like the tea party of today. The first episode characterizes the alcohol and saloon-driven male-dominated culture of the late 19th century and its corollary of female oppression as something that everyone should know about.
There is also an implication of Prohibition for U. S. economic history that I learned recently in researching my book on the history of the American standard of living. The standard Lebergott data on real consumer expenditures which cover 1900-1930 contain a significant downward bias after 1918 by measuring the consumption of alcoholic beverages as exactly 0.00 for 1920-30, completely ignoring the underground economy of Prohibition which by some estimates involved higher expenditures (because of higher relative prices) than the legal alcohol industry which (according to Lebergott) accounted for 5.4 percent of total personal consumption expenditures in 1910.
This issue explains at least a part of a great underresearched puzzle of American economic history, which is why standard measures of growth in real GDP and consumption are so low when the period 1913-28 is compared to 1870-1913 even though this was the period when electrification and the internal combustion engine changed America and ultimately the world.
Sounds like an issue worth looking into more carefully than has so far been the case. Our statistics on economic growth in the US at least from 1919 through 1933 may require a major overhaul. That could also affect some of what we think we know about monetary policy in the US over that period as well.