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Reprinted with permission•Mises Wire•Sergio Lopez
In the shadows of society, where legality meets defiance, lies a realm inhabited by those often deemed outlaws: smugglers. To some, they are criminals, evaders of the law; to others, they are the unsung heroes of the market, navigating the murky waters of prohibition and regulation to fulfill the demands of consumers and preserve individual freedoms. In this exploration, we unveil the clandestine world of smuggling and illuminate its role as a beacon of resistance against oppressive state control.
There is a popular perception that smuggling is an illicit activity driven by greed and criminal intent. There are many people who when hearing the word “contraband” immediately think of drug lords, cartels, and human trafficking. Of course, when people are forced to act in the shadows of the law, many terrible activities take root. However, at its core, smuggling is a manifestation of the free market’s resilience in the face of government intervention and prohibitive regulations. Smuggling is the last effort of the market to provide people with the goods and services that they desire and need.
When governments impose arbitrary restrictions on trade, whether through tariffs, quotas, or outright bans, they create artificial scarcities and distortions in the market. Smugglers emerge as entrepreneurial actors who capitalize on these distortions, bridging the gap between supply and demand and ensuring that goods reach willing consumers despite regulatory barriers.
Contraband and smuggling activities are the natural response to authoritarian regimes and in many cases are the only barrier between a meager way of life and total starvation of the population. In an article, Andrey Shlyakhter said, “The [Soviet Union’s] border was crucial because Stalin could not have built a totalitarian-type system without controlling the exits. The black market was key to Soviet citizens’ ability to survive. Smuggling of course connects the two, and contraband trade reached an unprecedented scale in Soviet Russia soon after the Bolshevik takeover.” This showcases only one example in which smuggling activities were crucial, and we might never fully know how many more people would have died in the communist world without the existence of brave entrepreneurs willing to risk their lives to move goods into the autocratic regimes.
But smuggling is not unique in dictatorships. Perhaps the most well-known example of smuggling activities took place in the United States: the case of alcohol prohibition during the early twentieth century. In the midst of a nationwide ban on the production, sale, and distribution of alcoholic beverages, smugglers known as “rumrunners” thrived, clandestinely transporting liquor across state lines and evading law enforcement authorities. Far from being mere criminals, these smugglers provided a vital service to consumers who sought to exercise their freedom of choice and indulge in recreational activities deemed illegal by the government.
Perhaps the best example of a society supported in great measure by smuggling in which contraband itself is widely accepted is Bolivia. A study done by the Cámara Nacional de Industrias (National Chamber of Industries) reveals the popular acceptance of smuggling. It maintains that 48 percent of those surveyed consider smuggling “important for the national economy.” Furthermore, another study by the organization indicated that in 2022, contraband reached a value of $3.3 billion annually, almost 8 percent of the gross domestic product, and the authorities had only seized (or stolen, to be precise) 3.18 percent of the illegal merchandise that entered the country. Of course, the government will keep seizing whatever products they can, even going so far as destroying alcoholic and food products rather than seeing them get to the market, all in the name of helping the “national industry,” an industry that due to being one of the most regulated in the region is unable to grow. Meanwhile, the citizens of Bolivia must buy products at ever higher prices.
The truth is that whenever governments of the world tighten their hold on the liberties of the people, brave men and women will rise. While governments expend vast resources on regulation efforts and enforcement campaigns, smugglers operate in the shadows, adapting to ever-evolving enforcement tactics and exploiting vulnerabilities in the system. Despite the risks involved, from arrest and imprisonment to violence and coercion, these brave people persist, driven by profit motives and a commitment to meeting consumer demand in the face of government prohibition.
Smugglers are ordinary people driven to extraordinary measures by the oppressive hand of government regulation. They are farmers struggling to survive under burdensome agricultural tariffs, artisans thwarted by restrictive trade barriers, and entrepreneurs stifled by excessive licensing requirements. Faced with limited economic opportunities and regulatory constraints, they turn to smuggling as a means of circumventing state interference and sustaining their livelihoods.
But smuggling activities don’t stop in food, beverages, or other daily goods. They play a crucial role in the dissemination of ideas. Banned literature, underground publications, and forbidden knowledge, challenging the monopoly of state-sanctioned information and empowering individuals to think critically and question authority.
Smuggling often serves as a form of civil disobedience against unjust laws and authoritarian regimes. In oppressive societies where basic freedoms are curtailed and individual rights are trampled upon, smuggling becomes an act of defiance, a way for ordinary citizens to resist government tyranny and assert their independence. By flouting unjust regulations and evading state control, smugglers challenge the legitimacy of oppressive regimes and pave the way for greater freedom and autonomy.
History is replete with examples of smugglers who have defied authoritarian regimes and resisted oppressive policies. The United States was founded by smugglers who defied the mercantilist policies of colonial power. As Richard J. Maybury said in his articleThe Founding Fathers: Smugglers, Tax Evaders, and Traitors,
America was a huge underground economy. Here trade was free and enterprise unrestricted. Taxes were so often evaded that for all practical purposes there were none; a person could keep everything he earned. He could save and invest, and eventually have his own thriving business or farm that would provide jobs for the next wave of immigrants.
Inhabited by rebellious, individualistic smugglers and tax evaders, America quickly became the most prosperous place on earth.
Many people consider smuggling a heinous activity unworthy of reprieve without realizing that contraband is simply the natural response to oppression. In fact, in a lecture given at Mises University in 2014, Mark Thornton states, “There is no smuggling on a free market.” Contraband cannot be present in a free market because there is no control to react to. People are free to exchange and satisfy their needs.
Smugglers are true heroes of liberty. From bringing food that will feed a hungry family to turning around the history of a nation, their acts of defiance have inspired generations of freedom fighters and served as a reminder of the indomitable human spirit in the face of tyranny. They foster innovation and entrepreneurship. Whether through ingenious concealment techniques, innovative smuggling routes, or decentralized distribution networks, smugglers exemplify the entrepreneurial spirit and ingenuity that drive progress and prosperity in free societies.
Rather than vilifying them as criminals or outlaws, we should celebrate them as champions of the free market and champions of liberty. In their tireless efforts, they embody the spirit of resistance and resilience that defines human experience. As we confront the challenges of an increasingly regulated world, let us remember the lessons of smugglers and embrace the principles of freedom, innovation, and entrepreneurship they represent. For in the end, it is they who hold the key to unlocking the true potential of the market and safeguarding our most cherished freedoms.
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