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Reason
Reason
Peter Suderman

Biden's New Industrial Policy Will Fail, Just Like Industrial Policy Always Fails

There can be no mistaking the intention of the Merchant Marine Act, the 1920 law more commonly referred to as the Jones Act. Passed in the aftermath of World War I, when demand for shipping services had increased dramatically, its purpose was laid out in the text of the statute itself, which declared the law "necessary for the national defense and for the proper growth of its foreign and domestic commerce." The intention was to make sure that in times of war or another national emergency, America had a high-quality merchant marine fleet "ultimately to be owned and operated privately by citizens of the United States." 

When it was passed, the law provided subsidies for the construction of a domestic shipping industry, while imposing various employment rules and other shipping regulations. It has been amended in the century since, but it continues to prohibit foreign-flagged ships from traveling between U.S. ports, and many of its wage and labor regulations are still in effect, making it beloved, almost obsessively, by unions. 

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