by Mitch Kokai
Senior Political Analyst, John Locke Foundation
George Leef’s latest Forbes column calls for the long-overdue expiration of an outdated federal law.
Some old laws still serve a good purpose, but many others no longer do, or never did.
One of the latter is the Merchant Marine Act of 1920, also known as the Jones Act. It was passed after we had just shipped vast numbers of soldiers and quantities of war material to Europe and back. Politicians were gripped by the idea that the country needed a strong merchant marine and assumed that a protectionist law was needed to accomplish that objective.
As Daniel Pearson explains the Jones Act in this Cato piece, “Its stated purpose was to maintain a strong U.S. merchant marine industry. Drafters of the legislation hoped that the merchant fleet would remain healthy and robust if all shipments from one U.S. port to another were required to be carried on U.S.-built and U.S.-flagged vessels.”
In other words, U.S. ships don’t have to deal with foreign competition when going between our ports. The theory behind the law is musty, antiquated mercantilism – the notion that the nation will be “stronger” if we protect “our” industries against foreigners.
Isn’t it a shame that we don’t have Jones Act equivalents to strengthen all our industries. Imagine how strong we would be if Congress had passed a Jones Act for the auto industry. Americans would be so much better off today if the Big Three had remained an oligopoly because the government kept out all of those Hondas and BMWs and Hyundais and Volvos – right?
Obviously not. Laws that shelter firms and industries from competition are damaging. They raise costs and obstruct innovation.