from The Internationalist and International Institutions and Global Governance Program

“Smuggler Nation”: America’s Illicit History Exposed

February 07, 2013

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Smuggling may not be the world’s oldest profession, but it must rank a close second. For as long as political authorities have sought to control borders, criminal networks have tried to circumvent them, evading customs duties and trafficking in illicit goods. Indeed, as Peter Andreas shows in his spectacular new book, Smuggler Nation: How Illicit Trade Made America, smuggling has been an enduring feature of the American experience since colonial times. It has been as important in shaping the development and global trajectory of the United States as the factors historians usually invoke—such as the liberal political principles of the nation’s Founders, the legacy of the frontier, the doctrine of American exceptionalism, the country’s geographic position, or its abundant natural resources. Once you read his fascinating account, you will never look at U.S. history the same way again.

Andreas, a professor at Brown University, has been a prolific writer on transnational crime since the late 1980s. But unlike many political scientists—to say nothing of policymakers—he has a deep interest in and knowledge of history. This grounding, he writes, left him skeptical of much official and expert commentary on the contemporary challenge of cross-border criminality. According to this now conventional wisdom (and here I plead guilty too), accelerating globalization has created unprecedented opportunities for illicit trafficking. This leaves sovereign nation-states at the mercy of criminal networks. Andreas’ book is an invaluable corrective to such “presentism” when discussing transnational crime. As he makes clear, the arms race between states and criminals is a venerable one. There was never a time when states had total control of their borders.

This is particularly true of the United States, Andreas’ chosen topic. Smuggling was omnipresent within the Thirteen Colonies. In fact, black market commerce in West Indian molasses, needed to distill rum, was integral to the transatlantic “triangle trade” involving African slaves as well as a means for the colonies to balance their current account deficit with the British Empire. It was Great Britain’s belated effort to crack down on illicit trade—which involved prominent New England merchants like John Hancock—that helped foment rebellion in the colonies. During the American Revolution, smuggling provided George Washington’s threadbare army with vital provisions it needed to defeat the world’s most powerful empire—just as illicit trade in cotton by Confederate blockade runners would prolong the Civil War more than eight decades later.

One of Smuggler Nation’s most jarring insights is that the very process of smuggling—and official responses to it—have been integral to the process of state formation and state-building in the United States and around the world. Andreas offers a clever twist on the historian Charles Tilly’s famous formulation that “the state makes war and war makes the state”, writing: “states make smuggling and smuggling makes the state.” What he means is that state authorities “make” smuggling by defining what is (and is not) illegal and, so doing, force market activity for illicit goods into the shadows. As governments seek to tax cross-border commerce or to prohibit imports of particular items, smugglers adopted evasive strategies. These strategies led state authorities to build up new border enforcement and interdiction capabilities. This raised profit margins for risk-takers, creating even greater incentives for criminals to adapt—and so on, in a never-ending spiral of action and reaction. Thus the rise of smuggling and the rise of the state go hand-in-hand, even as the official definition of what constitutes illicit contraband evolves—from untaxed molasses in colonial days to illegally imported slaves during the early nineteenth century or from black market alcohol during Prohibition to trafficking in narcotics and migrant laborers today.

Andreas also reveals that the relationship between the U.S. government and smugglers has been far more complicated than the common image of a beleaguered country gallantly defending its borders and citizens from vices. He provides numerous colorful examples in which senior U.S. officials have turned a blind eye to or manipulated smuggling—not only for private gain through corruption, but also for reasons of state, whether in commissioning privateers during the Revolutionary War, collaborating with Louisiana pirates (particularly the brothers Lafitte) during the War of 1812, or encouraging the Afghan mujahideen to profit from the opium trade following the Soviet invasion of 1979. He also reveals how some of the most successful individuals in American history made their fortunes from ill-gotten gains. These include America’s first millionaire, the fur baron John Jacob Astor, who gained his riches by trading alcohol to Indian tribes in violation of federal law. They also include prominent Rhode Island merchant John Brown—eponymous founder of the University that employs Andreas—who was the first American tried and indicted for violating the 1794 Slave Trade Act.

Smuggler Nation reveals how official U.S. attitudes toward illicit trafficking changed with America’s rise to world power. In the first decades after independence, the United States not only turned a blind eye to intellectual property theft, it actively encouraged it. To aid the country’s development, U.S. officials encouraged Americans to evade British prohibitions on sharing industrial secrets and exporting advanced manufacturing machinery. Samuel Slater, lauded as “the father of the American industrial revolution,” arrived in the United States having smuggled himself out Britain, in violation of that country’s strict emigration laws. Given this history, it is ironic that the United States, which subsequently became a global economic powerhouse, is now the world’s chief defender of intellectual property rights (IPR), routinely lambasting China and other emerging countries for violating U.S. patents and counterfeiting U.S. goods. Today’s China, he suggests, is merely stealing a page from Alexander Hamilton’s Report on Manufactures, which can be read as endorsing “state-sponsored theft and smuggling.”

Today, the United States is both the world’s leading market for smuggled goods and also the premier exponent of global prohibition regimes—as well as “source control” approaches that tend to focus on the supply side of the problem. Andreas shows the Sisyphean futility of attempting to enforce such prohibition regimes, particularly when it comes to drugs, since most eradication and interdiction efforts simply lead traffickers to shift production locations and transit routes without tackling the real problems of domestic demand. And he exposes the hypocrisy and selectivity of U.S. enforcement of many illicit flows, with the crackdown on illegal migrant labor from Mexico being a case in point.

Smuggler Nation is an eleganty written book that injects invaluable historical perspective into contemporary policy debates. And yet I was left with at least three lingering questions. First, what impact has the globalization of finance—which permits instantaneous financial transactions around the globe and the development of offshore financial havens—had on the arms race between states and criminals? Second, it is often claimed that today’s criminals are more adept than their predecessors at diversifying product lines, adopting horizontal networks rather than hierarchical organizational structures, and making temporary alliances with other illicit groups—in sum, that they are more fluid and nimble. Is this accurate? Finally, what are we to make of arguments that today’s smugglers pose an existential threat to U.S. national security, given the growing “nexus” among terrorists, criminals, and WMD traffickers? Does such “threat convergence” present dangers of a different magnitude?