Week 7 - Pt.2 Alcohol Management Lecture Notes PDF

SPEAKER 0 That's still. Hi and welcome to the second video lecture for week seven on alcohol in management, 1035. And we're going to talk in this particular lecture about a restraint on trade. The idea of prohibition, the context we're looking at it in today is the act or practice of forbidding by...

SPEAKER 0 That's still. Hi and welcome to the second video lecture for week seven on alcohol in management, 1035. And we're going to talk in this particular lecture about a restraint on trade. The idea of prohibition, the context we're looking at it in today is the act or practice of forbidding by law, the manufacturer, storage of uh alcohol, the transportation, the sale, possession, whatever, protecting the society from the evils of alcohol. Uh The prohibition movement largely based on Protestant church moral beliefs in Western countries, particularly England, uh United States and Canada, largely unsuccessful in England, which is interesting. Uh but the argument being uh a moral argument, the consumption of alcohol is a danger to the society. And if you read buzzkill, the reading that we have one of the readings we have this week, you'll see some of that argument laid out, but also an economic argument, the production of alcohol drains away. Pardon? The pun drains away from the economy, all sorts of economic benefit that if it was not wasted on booze might lead to better and more prosperous uh economic activity. You can see in the illustrations here we get out of the way of it. This is in Alberta, vote in Alberta about it. And you can see very much the, the economic argument. Would it hurt your business if all of that money, $12 million apparently in Alberta were spent on something other than booze. So it's a reasonably, uh, clear economic argument to accompany the moral and moral one and again, very political, the way in which you accomplish that is to influence or impact the political system in the various jurisdictions where they did. I'm probably gonna spend a bunch of time talking about Canada in part because that's what I have tended to, to look at in my historical background. But also because I think it, it's a nice little microcosm of some of the debates that happened. So the, the movement in Canada and this is a postcard that they send out to banish the bar, the bars are terrible. People wasting their money, et cetera. Uh very influenced by the British example and by American examples, as I said, largely a phenomena of protestant churches uh in Quebec where the, where Roman Catholic church was most powerful, there really was no appetite for prohibition. Uh But in the rest of the country, there seemed to be uh in the second half of the 18 hundreds, Canadian organizations such as the wonderfully named Dominion Alliance for the total suppression of liquor traffic. And I think probably more important the women, women's Christian Temperance Union regularly campaigned against the consumption, the sale, the production of alcohol within the Canadian jurisdictions. And I say the WCTU is really important for the reason of the last bullet point here, a very close connection between the idea of prohibition and the idea of for the first time allowing women to vote in elections. Given that the propaganda of the, of the time period probably accurately suggested that the negative effects of alcohol on the men in the society were disproportionately felt by women who either were deprived of the money their husbands were spending on alcohol or were the victims of things like domestic violence tied, tied to drunkenness. And the argument goes that the only way to settle this problem is to give votes to women because they are the only ones who will vote to get rid of boobs. Uh probably, you know, probably a pretty strong argument. Uh the politics of prohibition again, Johnny mcdonald, uh the Conservative Prime Minister, the first Prime Minister of Canada, a long time Prime Minister well known for consumption of alcohol, uh was absolutely not interested at all in, in considering prohibition. Some of the liberals, a number of especially the English Canadian liberals favored this reform measure. Um and saw it very much as a political issue that uh stood to gain, they stood to gain from. So in 1896 Wilfred Laurier becomes the first French Canadian Prime Minister. But importantly, the first liberal Prime Minister in quite some time. Uh And he did that by building a coalition between uh English, Canadian, Protestants and French Canadian uh supporters, liberals and in, in Quebec who supported him on because he was the first French Canadian to become prime minister. But it gave me a big problem. His political support in English, Canada very much strongly favored prohibition. His political support in Quebec wanted no part of it. They not interested at all in prohibition. So, what do you do? Laurie's first choice always was to do nothing. Uh Hi, his idea was that if you know, he just smile and carry on doing what you want to do, uh If you don't do anything, they have nothing to complain about. Kind of idea that wasn't gonna carry here. People were, it's a very emotional political issue. Um And so he has to do something and he decides he will have a referendum. One of very few referendums in Can in Canadian Federal history. And you can see here the numbers, oh, and out of the way for the big reveal, uh You can see that the idea of prohibition nationally wins 51.3% of Canadians say no more booze in 1898. But if you're Wilfrid Laurier and you are one of the world's best politicians and you're looking at that, you say, wow, we don't like those numbers. You look at those numbers in Quebec where they're overwhelmingly opposed to prohibition and also you look at turnip, right, barely 44 per not even 44% of Canadians could be bothered to vote. So Laurier says, clearly this is not important. Uh clearly we should focus on more important things, the provinces can decide whatever they want. But federal government, we're through worrying about alcohol. In part, this is influenced again because there are a number of very important uh Canadian companies, uh seagrams, for example, uh wiser and others that, that uh employ a great number of Canadians and have therefore a significant political influence. World War One and, and is gonna have an influence on this um prohibition. Once the federal government turned things over to the provinces, they were a little uh Prince Edward Island, loved it. Jumped on right away. Total prohibition lasted until 1948. The other provinces did so in World War One, which I think is kind of interesting. It was seen as a patriotic duty. We're gonna consume uh conserve grain for food rather than wasted, creating alcohol. If you are a patriotic Canadian, you should not be wasting your moral strength and fiber on alcohol, but also all that wheat. Um and so gradually uh uh over the course of the first World War first in the West, but eventually across Canada, except in Quebec, the provinces introduced uh prohibition to prevent the sale and distribution of alcohol. Interestingly not the production only Quebec didn't. In March 1918, the federal government stopped the manufacture and importation of liquor as part of a series of so-called reforms that they introduced to win the war. A huge loopholes in this. If you could go to a doctor and convince that doctor to say you need alcohol for medical reasons, then fine, you could order it by mail, mail it to you. World War one is interesting in a very different way as well. I remember when I talked about rum earlier, I talked about the British Navy getting rum regularly. So did the British army when they were in the field, particularly when they were in the trenches in France in the first world war. And because the Canadian army was virtually part of the Canadian army or sorry, the British army. Uh they did too when you were in the trenches every single day, they would bring up a great big jug of rum and you would be poured out a ration of rum and the Canadian soldiers for better, for worse, loved it. Uh They, it was considered a morale booster. They were living in terrible conditions in the trenches of the first World War. Uh It was argued that it was medicinal that it was uh both psychologically and physically medicinal for them. There's a quote here uh about one of the privates who uh the only consolation comes in gallon jars. Uh And that was the rum ration in which they, they worked really, really, really hard to make sure every day that rum is at the front. Really. They took lots of chances to make sure it's all there and the soldiers loved it. Um, go back to this because there's some interesting points about this. Go back to any to, to Canada all across the English Canada. They're, they're introducing prohibition. They're talking about how it's terrible. It's awful. It's evil. Uh, and then at the same time their boys are off in France and Belgium having significant amounts of rum poured into them every day. And so the, um, the prohibitionist movement in Canada starts to say no, this is terrible. It's awful bad for our soldiers, makes them, you know, sleepy and all those sort of things. Uh, and start to press the Canadian government of Robert Borden. They say to, you know, make them stop giving our boys. Rum Borden's not enthusiastic, but it's politics. So he says to the British, uh, but that rum ration any chance we could kind of back off on that. And they said no, and the Canadian army said no. And the Canadian soldiers all said no. Um, case in point, Tim Cook, the best historian of the Canadian army in World War one. Tim Cook tells the story of a regiment who lost their colonel happened regularly, high casualty rates and officers in the first war. And so they get a new colonel and the new colonel doesn't like alcohol. So he has an announcement. He meets the regiment. He says, ok, here's the new rules. No more rum. Instead everyone will get a hot cup of tea every day, met by silence and very quickly, not just the privates and sergeants, but the, everybody, the other officers included decide that if they're not gonna run, they're not going back to the trenches which would be mutiny, which is like death penalty stuff. But the, but the Canadian generals say this is no good because if it happens in one place, it might happen in others. So they said, ok, no, uh good job, New General or New Colonel, but did such a good job here in your couple of days here. We're gonna move you someplace else and they bring in another colonel who's much more amenable to the rum rash after the war, the soldiers come home to this uh almost total prohibition as soon as the war was over, Quebec went back to selling alcohol. They'd had to stop because of the federal law, although they never really stopped. Um But they're beginning to see that there are some problems with prohibition now to a certain extent it works right. Crime rates involved says you have to be careful with this because crime rates around the alcohol business skyrocket, the black market goes nuts and they're very violent and Gangsters and all this kind of stuff. But other stuff, the usual kind of stuff like break-ins and uh importantly, domestic violence those kind of things start to abate a little bit. But also people start to look at the way the law is being enforced. And boy, there's some resonance here with stuff. If you were a well to do white middle class guy who got caught with alcohol, the police would probably smash your bottle. Tell you you're bad and send you home. If you are a working class guy or help you a person of color or something like that, then you're gonna go to jail and people start to think about that about how fair is that. Um And then also a lot of the soldiers came back and like, ok, what the, what do you mean? I can't have a drink, right? I just fought a war for freedom. Where's my drink? Um And you know, is, is it appropriate to take away this right? All of this again, companies like Seagrams and Waterloo, for example, is continuing to make whiskey stored in their warehouses and ship it illegally into the United States. Uh So there start to be also concerns that this bootlegging idea, the idea that suddenly illegal alcohol is in either in speakeasy type illegal bars or also legal sales through various distribution ways. Uh has led to a huge expansion of criminal distribution, in fact, organized crime, especially in the States, but also in Canada, uh builds huge networks of people to distribute illegal alcohol. The Americans had been successful the 18th amendment to the American Constitution in 1920 made it illegal and it stayed illegal until 1933. When the 21st amendment, it had a couple in between apparently uh repealed the 18th and made alcohol legal as well. Ken Burns, the famous documentary stuff is often on PBS. Uh when he looked at uh the American experience with, with alcohol with prohibition, uh said that on the whole, the initial economic effects of prohibition were largely negative. You saw all kinds of businesses, breweries, distilleries, saloons being closed down, thousands of jobs being lost. Um Thousands of, you know, barrel makers, people that were shipping the stuff and trucks, waiters, other sort of stuff. There's this huge economic displacement of what had been a very large sector of the American economy. Uh He goes on to talk about the fact that, that some of this is mitigated in the aftermath by uh sort of redistribution of the way in which that, that money happens. Uh Some of the big beer companies for a, for example, get into soft drinks or things like that. Uh But there's still a significant economic dislocation as there had been in Canada. If we look at Labatt's brewery, for example, London Brewery, which is one of the most famous in Canadian history. Uh The, the official history of the Labatte Brewery or the new history of the Labatte Brewery. Uh notes that the introduction of prohibition in Ontario, 35 separate breweries in Ontario had been forced to close their doors, um, across the, the entire country. The same sort of thing happens. Distillers Brewers suddenly what had been a very, you know, successful business in Canada is no more. Um, the well paying jobs associated with it disappear. Uh, and people begin to resent that. Um, and they especially resent it because they see the fact that this business, the commercial relationship between alcohol and the consumer is simply driven underground into a black market. The people are still able to buy alcohol and they're just buy instead of buying it from companies, they're buying it now from criminals and that this remains a significant problem. Organized crime suddenly rears its head as well. The Canadians kind of see the other side of that first and you will see that with the introduction of the LCBO which we will talk or you will read a little bit about in the, the readings for this week in 1927 Ontario ends prohibition. They institute government control over time. Over the years, the law has become more and more liberal. Uh Canadians get more and more access and friendlier access uh to alcohol in Ontario, at least in the rest of the country. Um But for a while there 27 until 33 alcohol is perfectly legal in Canada, still completely illegal in the United States. So this means a couple of things. One of the things that means is that Canada becomes a tourist destination. If you're, if you're an American and you want to drink legally, you need to go on vacation to Canada. Um It also becomes a source. Uh Canada becomes a supplier for American organized crime in a very significant way. Uh supplying American organized crime with product to sell through the distribution networks that they have by smuggling from Canada into the United States, this sort of stuff. So the LCBO is a buzzkill article I quite like from TV, Ontario. Um But I think, and, and this is an in buzz skill, but I think it's uh an appropriate quote. G Howard Ferguson is the premier of Ontario at the time, a conservative. Uh, and uh, he stated when he was writing this new Liquor Control Act, when his government, was that the purpose, what's the purpose of it? And you got to remember what the second word is in liquor control board, it's control. But Ferguson's point is quote that this new law will allow people to exercise a God given freedom under reasonable restrictions. Ok. And the purpose of the LCBO was to promote temperance, sobriety, and personal liberty and above all to restore respect for the law. And I think that tells the tale of what happened to prohibition in Canada. People thought well, ok, but it's having all of these ancillary effects that we did not intend and therefore we need a different idea around it. That idea in Ontario's government control. One of today's uh pre one of this week's story presentations will be about uh differences in the way in which that government control happens across the country. LCBO changed a lot over the years, it became, rather than a control, it became a marketer. Uh the modern L CPO of the glossy magazine and big displays and all sorts of stuff like that, very different from what it was in 1927. Uh But again, very much premised on government control uh of a commodity. Ok. So that's the video content for this week. Uh I hope the readings go well and we will talk more in the tutorial.