A consideration of the ends and means of national shipping policies

Abstract

Although shipping is often regarded as the ‘free trade’ industry par excellence, there has never been a period in which competition was completely free. Always, one country or another, and often several together, had regulations designed to assist nationally owned ships against those of other nations. There was, however, a period in the second half of the nineteenth century when such regulations were of only minor importance. By 1890 this period of comparatively free trade came to an end, although until the 1920s the growth of world trade prevented the shipping policies which existed from having any very serious effect on world shipping. Interferences with the competitive process increased during the economically difficult inter-war years. Since 1945, currency problems and the growth of the nationalist spirit led to a further increase in policies designed to set aside, in shipping, the results which would follow in the absence of those measures.¹ Although policies to aid shipping are extremely widespread, ‘… it is doubtful if more than five per cent of world [seaborne] trade was removed from free competition by official discriminatory practices in 1957 … [It] seems unlikely that discrimination today concerns a higher proportion of world trade than in 1957.’²

Delivered as a lecture to the Institute of Shipping Research, Bergen, in March 1965 and published by the Institute in 1965. Reprinted by permission. An earlier version was read at the Friday economics seminar of the Handelshögskolan i Stockholm. I am greatly indebted to members of the seminar for their constructive criticisms which have led to the paper being practically rewritten. A shortened version published under the title ‘National Shipping Policies’ in the Journal of Industrial Economics November 1965.