The Birth of the Organized Crime? The American Temperance Movement and Market-Based Violence
43 Pages Posted: 17 Jun 2011
Date Written: June 15, 2011
Economic theory and anecdotal evidence suggest that the absence of formal contract enforcement increases systemic, or market-based, violence in illegal markets. Lack of substantial variation in market legality has prevented empirical evaluation of the strength of this association. Using a state-level panel of age-specific homicide rates between 1900 and 1940, I demonstrate that criminalization of alcohol markets led to a compression of the age distribution of homicide victims. Specifically, homicide rates for individuals between the ages of 20 and 30 increased relative to homicide rates for individuals under 20 and over 30. The compression of the age distribution of homicide victims was most evident in northern states and in states with large immigrant and urban populations. Using modern homicide data, I show that this age specific change in homicide rates is consistent with an increase in systemic violence, supporting the argument that the temperance movement contributed to the rise of organized crime in the United States. Banning the commercial sale of alcohol appears to have had a protective effect for children and mature adults, but this came at the expense of increasing the rate of violence among young adults.
Keywords: alcohol, organized crime, homicide, illegal markets, prohibition
JEL Classification: K42, N42, I18
Suggested Citation: Suggested Citation