How the Government Makes You Fat - The Great Sugar Shakedown

The Great Sugar Shaft
by James Bovard, April 1998
The U.S. government has devotedly jacked up American sugar prices far above world market prices since the close of the War of 1812. The sugar industry is one of America's oldest infant industries — yet it dodders with the same uncompetitiveness that it showed during the second term of James Madison. Few cases better illustrate how trade policy can be completely immune to economic sense.


The U.S. imposed high tariffs on sugar in 1816 in order to placate the growers in the newly acquired Louisiana territory. In the 1820s, sugar plantation owners complained that growing sugar in the United States was "warring with nature" because the U.S. climate was unsuited to sugar production. Naturally, the plantation owners believed that all Americans should be conscripted into the "war." Protectionists warned that if sugar tariffs were lifted, then the value of slaves working on the sugar plantations would collapse — thus causing a general fall in slave values throughout the South.


In 1934, the U.S. government imposed sugar import quotas to complement high sugar tariffs and direct government subsidies to sugar growers. By the 1950s, the U.S. sugar program was renown for its byzantine, impenetrable regulations. Like most arcane systems, the sugar program vested vast power in the few people who understood and controlled the system. As author Douglas Cater observed in 1964, "In reviewing the sugar quotas, House Agriculture Committee Chairman Cooley has had the habit of receiving the [foreign representatives interested in acquiring sugar quotas] one by one to make their presentations, then summoning each afterward to announce his verdict. By all accounts, he has a zest for this princely power and enjoys the frequent meetings with foreign ambassadors to confer on matters of sugar and state."


Sugar quotas have also provided a safety net for former congressmen, many of whom have been hired as lobbyists for foreign sugar producers...

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