Colin Grabow
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.
Opposing the law, by contrast, offers little reward. There’s no political army and no checks—only opposition from well-funded interests and the satisfaction of doing the right thing. The incentives are powerful, and the path of least resistance clear.
An Ecosystem of Influence
The Jones Act’s defenders have built an elaborate ecosystem of organizations to support it. The American Maritime Partnership (AMP) serves as the flagship lobbying coalition, but it’s joined by numerous other groups representing shipbuilders (e.g., Shipbuilders Council of America), vessel operators (e.g., the American Waterways Operators), and unions (e.g., the Marine Engineers’ Beneficial Association and the AFL-CIO).
These organizations engage in a full-spectrum influence campaign: hiring lobbyists, funding PACs, hosting events such as crawfish boils and “barge-ins” on Capitol Hill, and bestowing awards on supportive politicians. Some legislators even get ships named after them. Collectively, these groups and their individual members spend millions of dollars annually to cultivate and maintain congressional backing.
Supplementing this are public relations campaigns with social media accounts, podcasts, and slickly produced videos (including some aimed at convincing residents in shipping-dependent Puerto Rico that the law is in their best interest).
Influence efforts also extend beyond Congress. Federal agencies such as the Maritime Administration (MARAD) and even the Department of Defense have echoed industry talking points through the retweeting of advocacy content and the citing of data from studies commissioned by pro–Jones Act organizations.
Government officials and nominees are often quizzed on their Jones Act loyalty in confirmation hearings, creating a system where support for the law becomes a prerequisite for advancement.
Think tanks have also been enlisted as vectors of pro–Jones Act sentiment. Last year, the Hudson Institute, with maritime industry backing, released a pro–Jones Act report whose author is the former president of the AMP. It’s an example of how industry figures can position themselves within the policy establishment to produce favorable research for citation by policymakers and lobbyists alike.
Beyond promoting the Jones Act, meanwhile, there are also efforts to squelch dissent. Industry-aligned members of Congress, for example, have sought the removal from circulation of government reports and the scrubbing of language deemed overly critical of the law.
Neutralizing the Opposition
Jones Act beneficiaries have also been careful to neutralize potential sources of opposition. In Hawaii, Alaska, and Puerto Rico, chambers of commerce and business organizations that might otherwise oppose the law include major Jones Act firms on their boards. Ku‘uhaku Park, a recent president of the AMP, is a former chairman of the Hawaii Chamber of Commerce.
Even state-level lobbying is well covered, with Jones Act companies hiring political operatives to protect their interests in key regions. Reflecting their apparent effectiveness, Rep. Ed Case (D‑HI) recalled feeling “like a ton of bricks had fallen on me” during his time as a state legislator simply for requesting an examination of the Jones Act’s impact.
Think about that: Merely questioning the Jones Act was the politically less advantageous position in a state where polling has shown the law’s overwhelming unpopularity among those aware of it (that last part is key).
Asymmetric Incentives
While some industry associations (such as propane suppliers and beef producers) raise occasional objections to the law, their advocacy fails to match that of pro–Jones Act groups. Which makes sense—for most companies, the Jones Act is just one of numerous government-imposed headaches they must contend with. But those on the other side of the issue regard the Jones Act as near existential.
“I hate the Jones Act, but on my top-ten list of issues, it’s maybe number four or number five,” one industry representative told me. “For issues one, two, and three, I need the help of senators who support it.” Resources and political capital are limited, and few companies or associations are willing to spend theirs fighting an uphill battle.
And a bruising fight would inevitably await. No matter how modest the proposed reform, pro–Jones Act groups consistently fight tooth and nail to maintain the status quo. In doing so, they help foster perceptions of the law’s invincibility and the futility of resistance.
A Case in Point: Killing a Waiver
A 2019 attempt to breach the Jones Act chokehold is emblematic of how special interests maintain their iron grip. That year, Trump administration officials considered waiving the Jones Act to allow shipments of liquefied natural gas (LNG) to New England and Puerto Rico. No US-built, US-flagged ships exist for such cargo, and the regions were being forced to import the fuel—despite plentiful domestic supplies—from foreign countries. Allowing internationally flagged ships to do the job in the absence of appropriate American vessels seemed like a triumph of common sense.
Nevertheless, the waiver was quashed after intense lobbying by maritime groups and their allies in Congress. Secretary of Transportation Elaine Chao reportedly urged the president to delay any decision until pro–Jones Act voices could be heard—and when they were, the waiver died. One month later, the AMP launched a new campaign to honor “American Maritime Heroes,” with Secretary Chao as its first honoree. Less than two years later, a senior MARAD official who helped thwart the waiver was named the head of a pro–Jones Act industry association.
A Law That Endures Because It Works—for a Few
The Jones Act persists not because it is effective public policy, but because it is effective special interest policy. It exemplifies how narrow groups can bend the political process to their advantage, shielding themselves from competition and accountability. The costs—to the economy, the environment, and even national security—are real and well documented. The Jones Act 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.
