Why Did Prohibition Fail?
The early 20th century prohibition of alcohol in the United States failed because of increased crime rates, business failures and enormous unforeseen costs to tax revenues. Prohibition proponents had wrongly believed that if they kept Americans from wasting money on liquor, more productive businesses would boom.
In 1920, the 18th Amendment to the United States Constitution made the manufacture, sale and transportation of alcohol illegal except for medicinal or religious purposes. The most immediate consequence was a series of business failures due to loss of revenue in restaurants, bars and entertainment venues, followed by the loss of lucrative alcohol tax revenue for most states. It was expected that sales increases in real estate, household goods and many other industries would help offset these losses, but that never happened.
Instead, thirsty American consumers found ways to make their own liquor. Grape juice kits, marked with careful warnings not to leave the juice sitting too long lest it ferment, became a popular household purchase. Consumers found stills to purchase and instructions on how to use them freely available through the U.S. Department of Agriculture. Bootleg liquor exploded in popularity, and the lack of oversight led to a simultaneous explosion of tainted and dangerous illegal alcohol. Gangs formed for the purpose of transporting and selling alcohol, and violent crime went up.
Abandoned by its strongest supporters, Prohibition was repealed in 1933 with the 21st Amendment. The national temperance movement died with it.