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Economics of Moonshining

The government estimated that there were approximately 2,000 stills in the Carolinas, Georgia, Virginia and Tennessee in 1877. Assuming they operated 20 days a month, 4 months a year, and produced 15 gallons a day, federal agents concluded that by selling illegal, untaxed liquor, moonshiners were depriving the federal government of $2,500,000 a year in uncollected taxes.

The law of supply and demand

Supply and demand

Legal distillers paid the revenue tax, were regulated by the government. Moonshiners, who didn't pay, were adamant about keeping the government out of their business. Many saw it as family tradition, a skill or trade passed on from father to son. They latched onto the concepts of natural rights and republicanism of the kind that had sparked many of the protests against British rule, the "no taxation without representation" battle cry of 100 years earlier.

State-level Prohibition increased the pressure on moonshiners, as they were pursued by both federal and state officials. It also forced moonshiners to expand their markets in many cases; if they were going to supply more and more people, they had to transport the liquor further and further afield.

By 1916, North Carolina, South Carolina, Tennessee, Virginia, Georgia and West Virginia were all officially "dry" states.

This meant moonshining was increasingly becoming a big business, with bootleggers, the people who transported the liquor, playing a bigger and bigger role in the process.

Before Prohibition, moonshiners often sold their product relatively locally, relying on lumber and mining camps, textile mill villages and larger towns such as county seats to provide the bulk of their customers. Many of their customers were too poor to drink regularly or heavily.

Mother with her children

A woman and her children in moonshine country;
many moonshiners were far from rich.
From the John C. and Olive Campell Collection
Southern Historical Collection, University of North Carolina

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