The Institutional Topology of "Simulated Prohibition": Rent-Seeking, Logistics Enclosures, and Regulatory Theater from the Volstead Act to Frontier AI Governance

Abstract

【Abstract】This institutional economics and technology governance monograph deconstructs the structural mythology of total legal bans through a comparative analysis of the 1920s United States National Prohibition Act (the Volstead Act) and contemporary regulatory frameworks targeting frontier artificial intelligence. Challenging the conventional narrative that the Volstead Act represented an absolute moral prohibition, this paper reveals that the statute functioned as a "Simulated Prohibition"—an elaborate regulatory theater embedding lucrative, state-sanctioned loopholes (medicinal whiskey prescription monopolies, sacramental exemptions, industrial alcohol diversions, and private agricultural transport corridors). Under the classical "Baptists and Bootleggers" dynamic, moral crusaders provided ideological legitimacy while established logistics networks, pharmaceutical trusts, and corrupt enforcement cartels extracted enormous monopoly rents from artificial scarcity. This monograph proves that modern maximalist AI governance regimes reproduce this identical topology: under the moral imperative of catastrophic safety, incumbent technology conglomerates execute regulatory capture, creating onerous compliance barriers that handicap open-source competitors while preserving private backdoors, cloud proxy arbitrage, and sovereign state exemptions. The paper concludes that lasting governance requires abandoning simulated prohibitions and enforcing deterministic physical-layer audits, hardware provenance tracking, and transparent market integration.