The 1920 Merchant Marine Act, better known as the Jones Act, requires all goods shipped by sea between United States ports, or to foreign ports in wartime, to be carried on vessels built, owned, and operated by U.S. citizens."1 This Act has come under "fire" lately as to whether it is good for the economy as well as the U.S. shipping industry. Most opponents of the Jones Act see it as a blockade for the growth of the economy due to the Act's restrictive nature. "The arguments in support of the Jones Act are compelling ones: jobs, safety, environmental protection, efficiency, and national security, all provided at no expense to the U.S. taxpayer and without a dime of subsidy from the federal government."2 If the Jones Act was not in place the U.S shipping industry would slowly grind to a halt and become nonexistent.
"The theoretical reasoning behind the opposition to the Jones Act is that it is a restraint of free trade between nations. Free trade makes possible the development of a truly international division of labor which in turn allows countries to specialize in doing what they do best."3 This is one of the basic principles of Economics. But when looking at the complex problem of what type of effect the Jones Act has on the U.S. economy, it is hard to see where the line is drawn between defense issues and consumer interest in such a unique industry as U.S. shipping.
First, to truly understand how the Jones Act affects the whole economy it is better to narrow down the criteria from which the information is taken from. For those who oppose the Jones Act the issue of the "strangle hold" that U.S. shipping has on Hawaii usually comes up. It is easy to point and say that "this shipping law indirectly subsidizes the domestic industry by driving up prices for businesses and consumers."4 This fact is true, but the amount that prices are driven up is hardly noticeable on most products and the total amount a year spent per household is minimal.
