A Never-Ending Game of Cat and Mouse

The battle between smugglers and the state forged the U.S.

Smuggler Nation: How Illicit Trade Made America, by Peter Andreas, Oxford University Press, 472 pages, $29.95.

Before the Revolution, the British imposed tariffs, quotas, and regulations on the American people, not to serve the colonists' interests but to enrich the English. But enforcing these policies proved much harder than the authorities expected, as resilient Americans circumvented the laws.

America, in short, has long been a land of smugglers. Peter Andreas' fantastic book Smuggler Nation goes so far as to say that smuggling has shaped the country's identity and defined its essence.

Where there's demand, there's profit; where there's profit, there's supply; and when the law restricts supply, there will be smugglers. From tax evasion to the drug trade, many entrepreneurs see prohibitions and regulations not as a deterrent but as a potential livelihood. The government's response, in turn, has had a significant influence on the size and scope of the state. The endless game of cat and mouse between prohibitionist and smuggler has redefined American government.

Smuggler Nation even-handedly identifies both the good and bad sides of illicit trade. On the bright side, Andreas writes, "Smuggling helped to create a consumer society in the colonies." It even created "a certain amount of respectability by feeding new and growing consumer tastes, ranging from teas to silks." Tariffs and similar taxes tend to help relatively small interest groups at everyone else's expense. Smugglers provided consumers with a remedy, and for that reason consumers often cherished them. During alcohol prohibition, Andreas notes, bootleggers "enjoyed considerable local community support on the U.S. side of the river, so much so that several towns near Detroit situated across from Canadian export docks were openly hostile toward law enforcement."

On a more intellectual level, the seminal economist Adam Smith found smugglers admirable. "The smuggler," he wrote, "is a person who, though no doubt blamable for violating the laws of his country, is frequently incapable of violating those of natural justice, and would have been in every respect an excellent citizen had not the laws of his country made that a crime which nature never meant to be so." Smith was not alone: In my own work on the economics of smuggling, I have found many 18th and 19th century economists with positive views of the practice. In 1828 one of those scholars, Nassau Senior, described the smuggler as "a radical and judicious reformer."

But Andreas' book isn't simply a story about heroes fighting bad laws. There is nothing heroic about the slave trade, for example, and there was a thriving illicit slavery market for much of our history. Markets are amoral. If there is a demand, there will be profits, and so slaves will be a supplied. The same is true for any undesirable commodity. Even in these markets that as a matter of morality should not exist, supply reduction strategies create higher profits for smugglers, and increased enforcement means more profits for those traffickers who have a comparative advantage in violence, corruption, and the like. As Andreas notes about alcohol prohibition, "intensified enforcement perversely and unintentionally helped push the illicit trade into the hands of those criminal syndicates that had the greatest capacity to adapt and survive (including through greater use of violence)."

The flipside was the difficulty in enforcing slavery itself, as slaves ran away from plantations, sympathetic northerners helped them escape, and, in Andreas' words, a "hostile local environment" in the north "made it virtually impossible for slave owners to recover fugitive slaves in these states." Slaves could be smuggled out of captivity, too.

Another dark side to smuggling is the response it provokes from the government: By creating a new problem for the state to solve, it opens the door for new abuses of power. Sex trafficking and drug prohibitions provide examples. During the Progressive Era, there was a great concern about "white slavery"—the coercive traffic in prostitutes. This scare was greatly exaggerated, but it led to the Mann Act, whose language, Andreas writes, "was far more sweeping, vague, and open-ended." In the ensuing decades, the law "would be so broadly interpreted that most arrests had little or nothing to do with anything resembling white slavery." Similarly, the War on Drugs has led to the growth of the state in countless ways, from the use of the military in civilian law enforcement to an ever-growing prison system. Call it the Smuggler's Paradox: Government restriction lead to smuggling, and that in turn gives more power to government.

Yet these attempts to stop trade can backfire on the enforcers, too. I alluded earlier to the government's attempts to enforce alcohol prohibition on the Detroit River. When clashes between the Coast Guard and the rum runners began to affect civilians, the resulting outcry from Detroit's citizens was directed at the government, not the smugglers, and it compelled the state to back down.

So smuggling does not inevitably lead to a growth in government; it can also serve as a sort of civil disobedience that shrinks the state. The battle between smugglers and the state is a continual one, with gains and losses for both sides. As of yet, it shows no sign of ending.