Subsidies, protectionism and entitlements desiccate an industry and its professionals
By Ryan Skinner (email)
When I studied at Duke University in the 90s, one of the hot campus topics was affirmative action, the government-backed policy of favouring racial minorities in hiring and school admissions. Effectively, an African-American, Hispanic-American or Native American with lower test results and grades than the mean would get accepted.
Ironically, most minorities at my school (and many others) hated affirmative action. Why, if it meant a ticket to a prestigious school? They understood that, in the school's ultra-competitive environment, they were branded "second-best". No one could tell who got into the school via affirmative action and who didn't, so it appeared that anyone with dark skin was given an unfair boost.
That kind of uncertainty corrodes integrity. Am I good enough? Do I have an unfair advantage? Would I be here if it weren't for unfair laws or rules? If you love competition or believe in the level playing field, government-granted help takes the legs out from under you.
Thus a florid discussion that popped up on Maritime Executive's LinkedIn group (probably the most vibrant online shipping community today), where many American mariners and shipping professionals railed against the Jones Act, should come as no surprise.
So far, 168 back-and-forth comments from 21 committed shipping men (and one woman - Go Maria Dixon!) basically conclude either that protectionism and entitlements suck or that they're a blessing. Nonetheless, they're a fact of life in the US market and you're a sucker who's going to kiss off the domestic shipping and shipbuilding industry if the Jones Act is scrapped.
Arguments for subsidies, favouritism and protectionism weigh heavily in the long run. Saving jobs, keeping strategically vital trades open, preserving naval construction capability, etc. - these are all strong and valid arguments.
On the con side, state-sponsored protectionism kills competitiveness, which is why most economists hate it. Once a business is protected, it starts becoming wasteful and dies if you stop propping it up. That's a pretty strong argument for business leaders to reject state aid. Yet, they do it again and again.
An argument that dances well in the spotlight but performs poorly on the poker table is simply that of morale. People working in state-sponsored industries quite simply feel inferior. They never know, and never will know, whether they actually could compete, given equal footing. That thought's a killer, and it's part of the uncertainty that surrounded affirmative action.
It looks like the Jones Act is headed for revision. To those who suffer under its incapacitating tyranny, it'll be a blessing.
Some gems from the Jones Act discussion at Maritime Executive's LinkedIn group: