Saturday, September 30, 2017

The Jones Act is Morally Indefensible

A sailor friend of mine recently shared this defense of the Jones Act, a surviving relic of early 1900’s regulation which mandates (among other things) that all shipping between US ports be done on American-made vessels staffed by American sailors.  My response is below:

“Protectionism is always bad policy.  I understand you’re in the industry and would never want your working conditions to be any less safe or pleasant than they already are.  But labor laws impose costs in any industry, and that necessarily exposes all regulated industries to competition from foreign producers not subject to such laws.  That tradeoff isn’t unique to shipping; yet in no other industry is it thought sensible to ban foreign competition outright!

I live in a country where work hours are long and OSHA regulations don’t really appear to be enforced.  As such, I suspect Hyundai can both pay and treat their workers less well than Ford has to pay and treat theirs, enabling Hyundai to produce comparable cars at a lower price.  That may suck for Ford, but it’s a risk the US legislators assumed when they decided to pass those laws.  Nobody thinks that justifies banning Hyundai, and it’s widely agreed doing so would hurt American consumers and foreign workers by a much larger margin than the status quo hurts Ford.  Why is shipping different?

Your article clarifies that nobody opposes temporarily lifting the Jones act during times of emergency, which is good, and which Trump has now done.  But doesn’t that concession basically admit what economic studies have proven time and again: that the rule raises the cost of living on Puerto Rico (and Hawaii, for that matter)?  And if you so, doesn’t supporting a temporary suspension of the act – but not long-term or permanent one – basically boil down to saying “it’s not fair to impose economic hardship on millions of people for the next two weeks or so – but thereafter, it’s perfectly okay”?  How does that square with the reality that the rebuilding process is going to take years, or even with the moral implications of poverty and cost-of-living during normal times?

With a shout-out to Don Boudreaux (who I quote below), suppose I offer you a deal: I will agree to protect only those American workers who in return agree to stop buying foreign-made products.  So American sailors and shipbuilders can retain their Jones Act monopoly…

“only if they, in exchange, agree to stop buying the likes of Toyota cars, Samsung televisions, Ryobi hand tools, Ikea furniture, Shell gasoline, Amstel beer, vacations to Cancun, and musical recordings by foreign artists such as the Beatles, Elton John, and k.d. Lang.  They must also promise to stop buying the likes of bananas, cinnamon, and vanilla and, indeed, even American-made food items if these are shipped to their favorite restaurants and supermarkets in foreign-made trucks – or in trucks equipped with tires made by Michelin, Bridgestone, or some other job-destroying foreign company.  These workers would be permitted to drink only Hawaiian coffee; they must quit drinking the Colombian, Guatemalan, and Ethiopian coffees that they’ve become accustomed to drink.  Oh, and absolutely no diamond jewelry, as those gems come from Africa.


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