Rust Buckets: How the Jones Act Undermines U.S. Shipbuilding and National Security

Abstract

Since its inception, supporters of the Jones Act have claimed that the law is essential to U.S. national security. Although indefensible on economic grounds, Jones Act advocates argue that its restrictions promote the development of both a U.S. merchant marine and shipbuilding and repair capability that can be utilized by the country's military in times of war. This rationale appears to be more of an article of faith than the product of rigorous analysis.

This paper examines the national security justification. Contrasting the Jones Act's stated objectives with observable results, the law is revealed to be a national security failure. With dwindling numbers of ships, mariners, and shipyards, the U.S. military's ability to leverage these civilian assets during times of war has been deeply compromised. This paper finds this maritime decline to be the predictable result of the Jones Act's misguided protectionism, whose theoretical underpinnings are deeply at odds with both sound economics and modern maritime realities.

Rather than continue this flawed policy, the Jones Act should be either repealed or significantly reformed. This paper proposes alternative methods for ensuring military access to civilian mariners that offer greater cost transparency and increased certainty of the mariners' availability.

Keywords: national security, economics, Jones Act, maritime commerce, ship building, shipwork

JEL Classification: E2, E20, E23, N1, N10, N11, N12, N4, N40, N41, N42, N6, N60, N61, N62, N7, N70, N71, N72