An Economic Analysis of the Jones Act

Abstract

The Jones Act, which requires the use of American ships on all domestic voyages, has been in place for nearly a century. Its purpose when enacted was to strengthen national security by creating a strong shipbuilding industry and merchant marine. But by denying American businesses access to the best shipping, the act has imposed large losses on American consumers. Recent developments in the world economy, including globalization of ownership, offshore outsourcing of ship components, and extensive use of flags of convenience, have made the act even more burdensome. Since recent contributions of the merchant marine to national security have been small or negative, major reform of the Jones Act is overdue. Such reform would be consistent with the goal of eliminating excessive regulation of the American economy.