Protectionism

How a Dumb Protectionist Law from 1920 Still Screws People from New Jersey to Hawaii

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NPR has a story about how The Jones Act, a 1920 law designed to protect the U.S. shipping industry from foreign competition, has made it difficult for New Jersey to get large shipments of road salt this winter. The Garden State could have brought 40,000 tons of salt down from Maine on a single ship, saving time and money during one of the toughest winters in memory, but instead has to ferry a barge capable of handling shipments of under 10,000 tons back and forth, adding costs and delays.

[New Jersey officials] bought the salt but ran into problems getting it to New Jersey — despite the fact that there was an enormous, empty cargo ship, sitting at the Searsport port, headed down to Newark.

"I mean, it was just like serendipity," says Joe Dee, chief of staff with the New Jersey Department of Transportation. "Here's this ship that's big enough to take 40,000 tons of salt, on its way to Newark anyway. This is perfect."

But standing between that pile of salt and the port of Newark was an ancient law. Stemming back to the 1600s, reaffirmed in its modern form in 1920, it's called, the Jones Act. Under the Jones Act, if you want to bring something from one U.S. port to another, you have to use an American-built ship, flying an American flag, with a mostly American crew.

Read more here.

The argument in favor of The Jones Act—a weak one, to be sure—is that ship-building and sailoring more generally is related to defending the country. We've got to keep a strong ship-building industry on our shores, say defenders, so we can conscript it in time of war. Seriously.

It's not just folks in frigid New Jersey who are suffering because of a dumb old law. The NPR story touches on how The Jones Act screws over Hawaii especially. Thanks to this form of protectionism, residents of America's furtherst-flung state routinely pay 15 percent to 20 percent more for goods that come from the mainland.

Last May, Reason TV talked to Hawaiian legislators about "How Protectionism Hurts Hawaii: Why It's Time to Repeal the Jones Act." Check it out now: