This is the Cato Daily Podcast for Thursday, June 28th, 2018. I'm Caleb Brown.

The Jones Act has been around for nearly 100 years and it's raised prices and harmed the U.S.

economy and provided few of its promised benefits along the way.

Dan Einkinson is co-author of a New Cato paper, The Jones Act, a burden America, can no longer bear.

The United States has had the Jones Act for a hundred years.

Just about, the Merchant Marine Act of 1920, sponsored by Senator Wesley Jones of Washington State.

It was in response to what was perceived as unpreparedness for World War I, even though the war had been going

on a few years before we got involved.

Jones wanted to make sure that we had sea lift capacity and plenty of ships and shipbuilding capacity and a ready merchant Marines to stand by to assist in times of national emergencies.

So his law was intended to encourage domestic shipbuilding

and he did it in a protectionist way.

So he said, the law says that cabotage which is transporting

goods from port to port is restricted to ships that are U.S. built, U.S. owned, U.S. flagged, and U.S. staffed.

And as a result of that, other, you know, anything that's foreign, any ships that are foreign

cannot participate in this kind of commerce.

As a result, as you would imagine if you limit the supply of a service, then the price of that service is going to go up and ship builders, instead

of responding in a way that Wesley Jones may have thought they would, did what the textbooks tell you they will do, and that is they rested on their laurels, they saw no competition, they didn't innovate.

And it turns out today, the cost of a ship an average sea-going ship, ocean-going

vessel, is six to seven times more expensive in the United States than it is on

the world market.

So what that has done is US companies who

that have purchased these US-built ships

...