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By Peter Andreas, from his book out this month from Oxford University Press. Andreas is a professor of political science at Brown University.

The agents moved in to seize the shipment, but the traffickers turned on them, shooting the senior officer and torching his vehicle. With the local courts hopelessly compromised and corrupt, the outraged authorities wanted to extradite the perpetrators of this brazen crime. But this only made the outlaws more defiant and violent, and they were never caught.

This may sound like Tijuana or Juárez today, but the year was 1772, and the place was near my adopted hometown of Providence, Rhode Island. The ringleader of the attack, John Brown — a prominent local merchant whose business interests included smuggling, privateering, and slave trading — was one of the founders of the university that bears his family’s name (and that happens to be my employer).

The incident came to be known as the Gaspee Affair, after the British customs vessel, the HMS Gaspee, that was stormed, looted, and burned by an armed group of local citizens in retaliation for Britain’s crackdown on smuggling. The tiny colonial outpost had long been a hub of illicit trade, thanks to the geography of Narragansett Bay. Today, this episode is celebrated by local residents, who put on an annual festival, Gaspee Days, and proudly point to the showdown as Rhode Island’s opening salvo in the American Revolution. A plaque on South Main Street near downtown Providence commemorates the event. Gaspee Street is a few blocks away.

Of course, most Americans no longer celebrate illicit trade, and U.S. officials, like their British forebears, are increasingly preoccupied with fighting it. Transnational organized crime “poses a significant and growing threat to national and international security, with dire implications for public safety, public health, democratic institutions, and economic stability,” the White House declared in a 2011 report. Such pronouncements had been repeated in Washington policy circles since the 1990s, with U.S. Senator John Kerry exclaiming in 1997 that “America must lead an international crusade” against a growing global crime threat, and the pundit Moisés Naím labeling the conflict the new “wars of globalization.” Crime had gone global, Naím warned, “transforming the international system, upending the rules, creating new players, and reconfiguring power in international politics and economics.” These scary accounts contain many truths, but their neglect of the past grossly distorts our view of the present. Illicit globalization is not entirely new. Rather than posing a sudden threat, it is the continuation of an American tradition that goes back centuries.

Take, for example, the War of Independence. Colonial merchants were leading players in the Atlantic smuggling economy — most notably the smuggling of West Indies molasses to New England distilleries — and conflicts over smuggling and customs enforcement played a critical role in the tensions leading up to the outbreak of war. Pivotal incidents and protests, such as the Boston Tea Party, were closely connected to smuggling interests and the backlash against the Crown’s militarized crackdowns. The first signer of the Declaration of Independence was one of Boston’s best-known merchant-smugglers, John Hancock.

Smugglers put their transportation methods, skills, and networks to profitable use by covertly supplying George Washington’s troops with arms and gunpowder. Motivated as much by profit as by patriotism, they also were recruited by Washington for his makeshift naval force. This was just one of a number of major American military conflicts, from trading with the enemy in the War of 1812 to blockade running during the American Civil War, in which success on the battlefield was tied to entrepreneurial success in the underworld of smuggling.

Smuggling also helped drive the American industrial revolution. Conveniently forgotten in today’s intellectual-property debates is that early U.S. leaders such as Alexander Hamilton enthusiastically encouraged intellectual piracy and technology smuggling during the country’s initial industrialization process, especially in the textile industry. Such smuggling also depended on the illicit importation of skilled workers (in violation of British emigration laws) to assemble, operate, and improve on the latest machinery. The most famous British artisan to move to America illegally was Samuel Slater — credited as the “father of the American industrial revolution” — who was then hired by Moses Brown (brother of John) to work on and perfect smuggled cotton-spinning machinery in Pawtucket, Rhode Island. Only much later, once it was a major industrial power, did the United States become a forceful advocate for intellectual-property protections. In other words, the message to China and other countries today is “Do as I say, not as I did.”

The West was won not only through military conquest but also through illicit commerce. Many nineteenth-century Americans understood Manifest Destiny to include a divine right to smuggle. Smuggling of all sorts was at the forefront of the young nation’s aggressive territorial expansion, including large-scale smuggling of alcohol into Indian country (illegally traded for much-coveted furs) and illicit slave trafficking for the rapidly expanding cotton plantations of the Deep South. The squatters who unlawfully settled on federal, Indian, and Mexican lands, often provoking violent confrontations, were the “illegal immigrants” of their time. Weak government enforcement made such frontier activities possible, and the extension and strengthening of the government’s reach in turn often pushed them farther outward, to the new edges of the frontier. These borderland dynamics came at the expense of a decaying Spanish Empire, a newly independent Mexico, and ever-shrinking Indian lands. Frontier smugglers helped lay the groundwork for further territorial expansion and annexation.

There is nothing uniquely American about smuggling, of course. To varying degrees and in varying ways, all nations are smuggler nations. Some have even been smuggler empires; consider, for instance, the crucial role of opium smuggling in financing the British Empire in the nineteenth century. No so-called drug cartel today comes close to matching the power of the British East India Company, which in its heyday enjoyed a near monopoly on the China opium-smuggling trade. But the United States has the distinction of being one of the world’s leading importers of smuggled goods and labor (because of the sheer size of its economy) as well as the world’s leading antismuggling campaigner. It is also a leading smuggling source country, if one considers all the American guns, cigarettes, pirated software and entertainment, hazardous waste, and dirty dollars circulating around the globe.

The conventional account holds that there has been a dramatic upsurge in the volume of illicit trade in the past few decades. This may be true; after all, such trade would merely have to keep pace with the rest of the economy to grow at an impressive rate. But that does not mean this trade has necessarily increased as a percentage of overall global commerce. In fact, the liberalization of trade in recent decades has sharply reduced incentives to engage in smuggling practices designed to evade taxes and tariffs, which were historically a driving force of illicit commerce. Smuggling is increasingly about evading prohibitions and bans rather than import duties.

Tougher border enforcement is an easy sell in Washington, and every administration is vulnerable to the charge that it is not doing enough to “secure the border.” America has always had leaky borders, though, and attempts to seal them can backfire. Much of today’s U.S.–Mexico drug-smuggling problem, for example, is an unintended consequence of the “successful” U.S. crackdown on Colombian cocaine trafficking through the Caribbean and South Florida in the 1980s, which pushed the cocaine trade to the Southwest and vastly increased the power and wealth of Mexican traffickers — with devastating consequences for Mexican society. Even if not always terribly effective, efforts to tighten government control force illicit traders to devise more creative and elaborate methods. With the border more heavily policed, for example, migrants now have little choice but to place their lives in the hands of professional smugglers, whose dangerous crossing strategies lead to hundreds of migrant deaths every year in the most remote and treacherous stretches of the border. We’ve seen these dynamics before. The Chinese Exclusion Act in the late nineteenth century pushed Chinese laborers to attempt clandestine entry through Canada and Mexico with the help of professional smugglers. Similarly, the squeeze on maritime alcohol smuggling off the East Coast during the Prohibition era helped to turn the U.S.-Canadian border into an even busier smuggling superhighway.

Today’s narrative of governments “under siege” by illicit trade networks also conceals the fact that governments at times create and exploit these networks. State-sponsored illicit trade is not restricted to a handful of “rogue states” such as Iran and North Korea. During the Cold War years, the CIA exploited smuggling networks for a variety of purposes, among them funding and supplying insurgents around the globe, from Southeast Asia to Afghanistan to Central America. Washington gave a green light to arms-embargo busting in the Balkans in the 1990s, and in recent years has tolerated and sometimes even supported allegedly drug-connected Afghans allied in the fight against the Taliban and jihadists. These cases are variants of a practice that dates back at least to the War of 1812, when U.S. forces led by Andrew Jackson made a short-term alliance of convenience with the band of pirate-smugglers led by Pierre and Jean Laffite in order to repel the British in the Battle of New Orleans. The Laffites were treated as heroes and granted presidential pardons for their patriotic assistance; they promptly returned to their old ways.

Bringing in history to re-evaluate illicit globalization helps us make sense of why we are where we are and even where we might be headed. We need to take a deep breath. Overblown accounts of illicit globalization too often lead to overly punitive prescriptions. The United States incarcerates more people for drug-law violations, for example, than Western Europe does for all offenses combined. Like the British in their crusade against the illicit slave trade in the nineteenth century, the United States leads a crusade of sorts against drugs — but whereas the former was about freeing people, the latter is about locking them up, with African Americans making up a disproportionate number of those behind bars.

In my undergraduate lecture class The Politics of the Illicit Global Economy, I ask students whether they have ever bought counterfeit goods; a majority of hands go up. I then ask how many have illegally downloaded or streamed movies or music, and almost all hands go up, which is perhaps to be expected. I don’t ask them about illegal drugs, but I already know the answer. Campus polls suggest that pot is more popular than tobacco.

John Brown would be proud that the smuggler tradition remains alive and well. There were no drug prohibitions in his day and nothing remotely resembling pirated music and knockoff Gucci handbags, but pirated industrial technology would certainly be familiar, given that his brother Moses and others in his family invested quite a bit in it. John Brown would notice that Rhode Island is no longer the smuggling hub it was during his heyday. In the early years, Rhode Island’s fiercely independent merchants smuggled in West Indies molasses to manufacture rum and were also leading slave traffickers, in flagrant defiance of state and federal laws. Today, however, Rhode Islanders participate in the smuggling economy mostly as consumers rather than producers or traders.

John Brown the illicit slave trader would surely be startled to see that a black woman had recently served as president of the university he helped found. The trade he so defiantly defended brought to America the ancestors of Brown University president Ruth Simmons — the first African-American president of an Ivy League institution, whose office was located in a university building built partly by slave labor. Simmons was praised for forming a Steering Committee on Slavery and Justice to examine the university’s early links to slavery and slave trafficking, including John Brown’s role. Yet Simmons was also the subject of controversy when it was reported that, as a board member of Goldman Sachs — which in 2010 paid a $550 million fine to settle federal securities-fraud charges — she accepted millions of dollars in stock options and approved millions more in controversial bonuses for its widely reviled top executives at a time when the nation was undergoing a financial meltdown. Simmons’s role at Goldman Sachs raised eyebrows across campus, provoked outrage in the Providence Journal, and drew the scrutiny of the business page of the New York Times. She nevertheless survived the episode remarkably unscathed and is widely celebrated as Brown’s most successful president.

By comparison, my students involved in the illegal economy are amateurs, but they are the ones the law criminalizes. Even though America remains a smuggler nation (as well as an ever-expanding police nation), it seems clear that curbing reckless behavior in the licit side of the economy is the country’s most formidable challenge today. Policing efforts, while increasingly prominent, are noticeably selective in whom and what they target. The U.S. Securities and Exchange Commission is a tiny player in the massive federal criminal-justice bureaucracy. Despite the intensity of the financial crisis and its aftershocks, policing Wall Street remains a halfhearted sideshow compared with policing border smuggling. It is far easier, after all, to go after drug couriers and smuggled migrants than the speculators who made such extraordinary profits in the years leading up to the financial crisis. John Brown, who loathed government interference and made his fortune by blurring the lines between licit and illicit business, would be envious.


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February 2013

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