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It’s hard to believe this, especially given America’s love for beer and its rich heritage of Bourbon and Whiskey; but way back in 1919, a piece of legislation called the Volstead Act was passed in the United States, declaring Prohibition across the land. For 14 years, it was impossible to get a drink legally.
These years also marked the rise of Al Capone, a Chicago-based mafia leader who built a fearsome organisation, whose primary source of income was — you guessed it — bootlegged liquor. Thirsty Americans were willing to pay a steep premium, and Capone swooped in to fulfill the need. He described himself as ‘a businessman’, someone who ‘gives people what they want’.
Like any smart businessman, he diversified his operations. Drugs, kidnapping, murder, extortion, bank theft, casinos, smuggling, brothels — if he didn't control it directly, the dubious organisation that did paid him for ‘protection’. Crime rates went through the roof as Capone built an unholy alliance between organised crime, corrupt politicians and bent cops.
It is rumoured that in the late 1920s, when there was some momentum to have the Volstead Act repealed, many of the politicians who lobbied for it to remain unchanged were closely associated with Capone’s organisations. Indeed, many have suggested that perhaps Prohibition lasted for as long as it did only because Capone was so powerful.
If America’s Prohibition has taught us anything, it is that crime will increase as a result of such a diktat. Other consequences would follow as people desperately sought cheaper alternatives to the more expensive black-market booze.
It became clear, though, that Prohibition wasn't working. Liquor consumption hadn't vanished, as the well-intentioned promoters of the legislation had originally envisaged. Instead, it had become more expensive, unregulated and had served to fund organised crime on an unprecedented scale. People were drinking country brews, getting ‘high’ on moonshine and going blind from drinking methylated spirits because they couldnt get their hands on ‘the good stuff’.
It's a theme that we have seen throughout history. A seemingly well-intentioned objective, passionate rhetoric, the possibility of gaining a few votes, a few vested interests, and — boom — before you know it, a ‘vice’ is suddenly ‘banned’.
Which brings me to an interesting issue which has featured prominently in several State elections in recent times — the question of Prohibition. It has been a talking point in Tamil Nadu, Bihar and Kerala, to name just three States. It didnt work in the United States. It has never really worked in Gujarat, a State which has been officially ‘dry’ for several decades but has a super-efficient underground distribution network. Bootleggers and ‘delivery men’ in Gujarat operate and communicate in a network of supreme efficiency and smoothness. Make no mistake; it is organised crime operating with the sort of efficiency that evolves over decades, enhanced by all the tools of modern communication technology.
The liquor bans in a few States have resulted in a slow-down in consumption of branded liquor — the industry, which was poised to grow at 6%, slowed down to a 0.2% year-on-year growth because of Nitish Kumar’s booze ban in Bihar and the restrictions placed on the liquor supply chain in Kerala. This may or may not be fully compensated by an increase in the consumption of country brews and illicit liquor, but it is not unreasonable to expect that consumption may have reduced in the newly ‘dried’ States. If you believe that alcoholism is an evil in our society today, reduced consumption of alcohol is good news. However, we must remember this reduced consumption is routed through a black market, which profits the most dangerous and undesirable elements of our society. We have taken one step towards winning the alcohol battle but set ourselves two steps back in the war against organised crime. If America’s Prohibition has taught us anything, it is that crime will increase as a result of such a diktat. Another possible fallout would be more cases of hooch poisoning and methylated spirit–induced blindness, as people desperately seek cheaper alternatives to the more expensive black-market booze.
When people contemplate these bans with the best of intentions, they consider a scenario where the ‘vice’ doesn't exist and compare its costs and benefits with those in a scenario where it does exist. The inherent error in this analysis is that in reality, there is never a scenario where the ‘vice’ doesn't exist. It always does. The question is, would you rather legitimate businessmen ran and grew the business or would you prefer it if gangsters did so and funded other criminal pursuits with the profits?
Ironically, the lawmakers, who set out to rid us of what they perceive to be ‘evil’, end up, when they issue bans, enriching the most dangerous elements of society by financing a whole slew of other criminal activity.
Some bans are more mystifying than others. Gambling, for example, is a relatively harmless vice, where wealth gets redistributed on the basis of an event beyond the control of any of the participants (in an unfixed, fair punt). I hasten to add that when I use the word ‘harmless’, I mean that society as a whole is not harmed. An individual, on the other hand, may be seriously harmed and may lose all his wealth in a matter of minutes, but one man’s loss is another’s gain, and so society as a whole is neither better nor worse off for a few people gambling except for the wastage of time. The only real cost here is that people spend hours on gambling when they could have been engaged in other activities that might add value to society or their own lives. And so, the only real cost or loss is the loss of time and opportunity. Of course, gamblers could argue that the enjoyment and thrill of gambling offsets this cost. Of course, the House always wins something off everyone, by taking a little bit off the top or by the spread of the odds. But that is a debate for another day.
While I personally consider it imprudent to gamble because I am wary of the harm that it might do to my own personal wealth, I cannot imagine why it is considered an ‘evil’ that needs to be banned.
Sadly, the Law doesn’t agree with me, and many forms of gambling are illegal in India. That hasn’t stopped gamblers and punters, though. Unofficial estimates of illegal gambling in India are anywhere between $30 billion and $50 billion a year — that’s approximately Rs.2-3 lakh crore. All of this money is being funnelled through betting syndicates organised by the mafia. Our laws ensure that the mafia has a steady source of significant revenue; they are quietly earning ‘juice’ — betting jargon for a margin — on each bet. Even if the net margin is as low as 1%, it represents an income of anywhere between Rs.2,000 and Rs.3,000 crore annually to the mafia. A ban on a relatively harmless vice has resulted in a significant amount of money being invested in other, more serious crimes. This leads to more thugs, more guns, more hit-jobs, more extortion and more anarchy. In the wrong hands, thousands of crores of rupees can do serious damage. And that’s from just the one ‘vice’. Ironically, the lawmakers, who set out to rid us of what they perceive to be ‘evil’, end up enriching the most dangerous elements of society by financing a whole slew of other criminal activity.
Not as straightforward, but on a much bigger scale and on a much larger canvas, is the international opium trade. Afghanistan’s abundant opium supply and black market is controlled by terrorist organisations like the Taliban and al-Qaeda. In fact, many reports would suggest that the largest known source of income for these organisations is the opium black market. The fact that opium is in strong demand and deemed to be illegal all over the world has made the Taliban and al-Qaeda the fearsome terrorist organisations that they are today, armed to the teeth with the best weapons that money can buy.
That is not to say that the case for legalising opium is straightforward. Because, unlike the gambling issue in India, this is a much trickier question. If opium is indeed legalised and becomes more easily available at cheaper rates, a large population all over the world would be addicted. Unlike marijuana, opium has more dangerous effects; the loss in productivity, the poorer quality of life and shortening of lifespans make a very strong case for banning the substance. However, if opium is banned, it would fund organisations which kill tens of thousands every year, and destroy property and resources. It's a tough question to answer, and calls for data and analysis.
Unfortunately, no politician has been insightful enough or honest enough to discuss the problem from this perspective. We hear rhetoric about ‘the war on terror’ and ‘the war on drugs’. They represent two sides of the same ugly coin.
Some bans hurt people. The laws on prostitution are vague, at best. Some experts say that while the Suppression of Immoral Traffic Act (SITA) allows the exchange of sex for money, organised prostitution and solicitation are illegal. Brothels are technically illegal. It is exactly the sort of grey area that creates the opportunity for harassment and, therefore, forces helpless prostitutes to turn towards those engaged in organised crime for ‘protection’ and business.
Their lives are miserable, and they have no recourse. Their counterparts in Holland, Germany and Austria lead lives of relative dignity, working in a regulated and legitimate profession, where their contribution to the economy and the tourism industry is recognised and valued. Brothels and prostitutes in these countries pay taxes, have access to medical care, and have less need for criminal ‘protection’ or ‘client-sourcing’. In some cases, tourism agencies even hand out brochures, listing approved brothels where standards of health, cleanliness and sexual hygiene are acceptable. To recognise that an industry exists and that those who fuel it deserve basic human rights isn't a sign of depravity; it’s a sign of enlightenment.
At the heart of this issue is an insight that many well intentioned lawmakers havent quite grasped yet. To effectively tackle a perceived evil in society, it is futile to attempt to restrict the supply. If the government decides to ban the sale of cigarettes in this country because it believes that smoking is evil, it would be disastrously unsuccesful. An underground network of bootleggers and smugglers can easily make cigarettes available to those who demand it, as long as the demand is consistent and strong. The way to win this fight — if at all you believe that it is worth fighting for — is to try and work on bringing down the demand. The combined presence of all the underworld organisations in the world wouldn’t make you smoke if you didn’t want to. When the demand drops, the industry collapses. There is no need for legislation or bans or underground black markets. Nobody banned landline phones, phone directories, greeting cards and typewriters. And yet, these instruments are all but wiped out today because few people accord value to these products.
As small and unimportant as it seems, the pictorial warning on a packet of cigarettes is a step in the right direction if you believe that smoking is harmful to society. It makes the smoker think twice about the choice that he is making. Same with anti-smoking campaigns that spread awareness about lung cancer. These aren’t seen as ‘landmark moves’ or ‘masterstrokes’, but sometimes the most effective solution isn’t the most glamorous or the most bombastic. ‘Creating Awareness’ can sometimes be used as a cliché; but the fact remains that if a society is to reform itself, it must by choice and not coercion. And to that end, it is awareness, and not legislation that is the most potent weapon. Our lawmakers would do well to remember that when the Law denies our society the right to choice, the black market provides it, at a perilous cost.
It is ironical that our political leaders and lawmakers raise a hue and cry about the evil of Dawood Ibrahim’s organisation, which was built on the lucre of smuggling and gambling syndicates, when it is our laws and the corruption of our lawmakers that built his empire, brick by brick.
