BAD LAWSHow Special Interests Keep Bad Laws on the Books: The Case of the Jones Act
The 1920 Jones Act restricts intra-U.S. water transport to vessels that are U.S.-flagged, U.S.-owned, and built in U.S. shipyards The law serves as a tribute to how entrenched interests can hijack public policy and make the repeal of failed, costly laws among the heaviest of political lifts.
Seven years ago, the Cato Institute launched its project on reforming the Jones Act—the 1920 law that restricts intra-US water transport to vessels that are US-flagged, US-owned, and built in US shipyards—with the release of its first policy analysis scrutinizing the law. Since then, the Jones Act has received considerable attention, numerous bills have been introduced aimed at tackling it, and three states have even passed resolutions calling for either its reform or repeal.
Yet the law endures. And the reason is a case study in the power of special interests.
At the heart of the Jones Act’s staying power is the classic public choice problem: diffused costs and concentrated benefits. Millions of Americans pay more for goods shipped by water, but the individual impact is typically too small to attract notice. Paying an extra dime per gallon for gasoline (to name one example) is certainly annoying but probably not the stuff voter revolts are made of. Indeed, it’s a near certainty that most voters aren’t even aware of the law’s role in pushing up costs at the pump.
Jones Act defenders respond to a far different set of incentives. The handful of shipbuilders, maritime unions, and shipping companies that profit from the law are highly organized, deeply connected, and extremely motivated to protect their interests. Meanwhile, most Americans—including Jeopardy! contestants—don’t even know the Jones Act exists (although almost certainly more know now than seven years ago).
This combination creates fertile ground for entrenched interests to operate with minimal scrutiny at the public’s expense.
Political Persuasion, the Old-Fashioned Way
The mechanisms of influence start early. Newly elected members of Congress unfamiliar with the Jones Act are quickly courted by maritime unions and industry groups. As one former congressman recounted to me, these actors wrap the law in patriotism—“just ensuring that American goods are transported on American vessels with American crews”—and back their pitch with campaign contributions, political endorsements, and get-out-the-vote efforts.
And they don’t ask for much—just to keep things the way they are.
