A Brief Guide to America's Clandestine Economy

Peter Andreas, Smuggler Nation: How Illicit Trade Made America

In fiction, smugglers are often dashing romantic figures like Han Solo or Captain Jack Sparrow. Or they are filthy criminals trying to get drugs, white slaves, and other carrion across borders. But historian Peter Andreas suggests the reality is both more interesting and more banal than fiction: smugglers are simple entrepreneurs at the forefront of free trade. And they have been the principal architects of America’s proprietary economy.

Andreas, whose academic background encompasses the sweep of political economy, compiles a new history of America spotlighting the effects of smuggling, which he defines as unauthorized commerce. In his telling, the process of evading revenuers, border guards, and moral police has defined our nation. Though he doesn’t pretend his story is absolute, he makes a persuasive case that the contest between state and free money has helped shape America’s identity.

The French and Indian War would have ended much sooner if American colonists had obeyed laws against trading with the supremely underprepared French. (This pattern would recur in the Civil War.) When the British, incensed with this illicit behavior, cracked down on the smuggling they’d previously ignored, colonists rebelled. The American Revolution wasn’t about freedom of religion or arms; its direct motivation was the desire to trade goods with impunity.

But once Americans won their Revolution, they were forced to change their tune quickly: the generals who fought for smugglers’ rights suddenly had to defend their borders. This was especially amplified by the fact that the original Constitution banned income taxes. The state derived its greatest revenues from import duties, so the government and its citizens engaged a race to outsmart each other regarding getting valued foreign goods into the country.

Here we notice one of Andreas’ most striking themes, the recurrent reversals in America’s border trade policy. America today claims to espouse “free trade,” a buzzword that began life as a euphemism for smuggling. In the same manner, behavior once considered revolting eventually became acceptable. Selling whiskey to Indians, once barred because Natives’ lack of liquor protocol led to binge drinking, soon became an arm of American policy.

These reversals often arise out of improvisational morality. Public paranoia surrounding alcohol, drugs, and white slavery resulted in comically disproportionate responses, even if the scare (as with white slavery) was almost entirely fictional. This has often been coupled with baffled responses from public moralists, who apparently assume the population will stop drinking, toking, or paying for sex simply because the law says we should.

While private citizens have done whatever it takes to avoid paying the excise, the state has gone to remarkable lengths to prevent such avoidance. At times, such as during the Whiskey Rebellion or the War of 1812, Presidents who fought in the revolution used the military to enforce trade laws on American citizens. That continues to the present, when the Border Patrol has more armed agents than the FBI and polices the border with Predator drones.

Staunch libertarians have a history of making exceptions, sometimes strikingly large, where it concerns smuggling. Thomas Jefferson supported a weak federal government until he tried using trade to influence the Napoleonic Wars. Suddenly, he favored a strong government with fierce powers, as long as that government used those powers to support his favored policies. Compare that to small-government Republicans who favor double-barreled copyright laws.

Speaking of copyright, American enforcement in that regard has been very malleable. In the early years, America was poorly equipped for the nascent Industrial Age, and suborned explicit piracy to get ahold of new technology. By the Twentieth Century, America’s technology so dominated the world that we enforced some of history's most punitive intellectual property laws. And we’ve tried to force other countries to treat our laws as gospel.

Andreas’ earliest chapters are gripping, having the narrative tension of a pirate romance. The unexpected light he casts on canonical American heroes may make you question everything you learned in high school history. Later chapters become more statistically rich, losing the narrative quality in favor of a data dump. But even in these later chapters, Andreas conveys a sense that America has a choice, where public ethics battle private enterprise.

For students of history, Andreas presents an lucid survey of political economy. For politicians panicked over property rights, human trafficking, and drug running, Andreas puts the present in historical context. And for anyone interested in America’s protean hush-hush economy, Andreas’ fast-paced, novel-like analysis spotlights a seldom-seen corner of American identity that you will not forget once it enters your mind.

For more on a similar topic, see also America's Clandestine Economy, Part Two