America is a smuggler nation: some policies never serve the public interest and are usually counterproductive

How Smugglers Made America

by Mark Thornton 

Smuggler Nation: How Illicit Trade Made America by Peter Andreas

Whenever I receive a book to review that is written by some hotshot ivy leaguer, I brace myself for all the deception and tomfoolery that I will have to endure. Peter Andreas’s Smuggler Nation, however, turned out to be a very pleasant surprise. Indeed, I can recommend this book to anyone interested in a true history.

Reading Andreas’s account we can note first of all that smuggling in America has been around since colonial days and will continue into the foreseeable future. Moreover, smuggling has played a very prominent role — not just a subsidiary one — through our history. Indeed it has often played a pivotal role in important events and historical episodes. And finally, Andreas’s account illustrates how smuggling is the result of prohibitions and protective tariffs. The cumulative impact of these policies has been the driving force for the establishment of big government and the police state in America.

Andreas makes it clear that the policies that create incentives to smuggle are irrational, ineffective, and often counterproductive. He also makes it clear that Americans have been duped into supporting various prohibitions to suppress vice by self-promoting politicians, self-interested bureaucrats, moralistic crusaders, and a compliant press. It is also interesting to note that smugglers were often considered heroes, if not by the majority, then certainly by consumers they served. It is also important to point out that readers will find that many of the wealthy and prominent families in American history, including several of our founding fathers, first grew rich on the profits from smuggling.

The book consists of sixteen chapters divided into five sections. It is all well-written and packed with interesting information and tidbits of American history. However, I am going to focus on the three chapters for which I have the most expertise. The first chapter to discuss covers the Union’s Civil War blockade by the South. The author clearly describes the unappreciated importance of the “naval” aspects of the war as well as North-South trade during the war, the Confederacy’s grand miscalculation regarding King Cotton and the blockade, and that the battle between blockaders and blockade runners was for profit and largely non-violent.

However, the author wrongly concludes, along with many historians, that the Union blockade was a success. He seems uneasy with this conclusion and he uses the famous historian James McPherson to make his point. Andreas claims that the blockade was relatively successful despite noting the point: “Fast-foreword to the American Civil War, where for the first time the side imposing the blockade was the victor.”

Blockades do raise transport costs and prices. They do reduce the amount of trade. However, higher prices are profit incentives that keep important goods flowing, as well as incentives to economize. Higher prices also open up bribery opportunities which kept goods flowing over the border between Union and Confederacy. Therefore we should never expect blockades to be truly successful.


.....

Read more: mises.org